Thirty-five years after the signing of the Equal Pay Act, some women’s activist groups want you to believe that systematic discrimination against women is alive and well – even for those considered to have reached the highest echelons of American success.

The latest weapon in the feminist arsenal is a new study from Catalyst, a women’s research organization. The group’s 1998 Catalyst Census of Women Corporate Officers and Top Earners found that female corporate executives in the Fortune 500 are chronically underpaid compared to male executives.

The nation’s highest-paid female corporate executives, the study claims, earn 68 cents to every dollar earned by the highest-paid men – worse than the national average by a full six cents. The story launched a new gender jihad, with sensational headlines such as "You’ve Come a Short Way, Baby" in Business Week and a segment on Geraldo Rivera. But the audience missed a key point. The study has ignored most of the fundamental problems associated with any unilateral comparisons between men and women workers.

To get the 68 cents figure, Catalyst divided the average earnings of the top female executives in Fortune 500 companies by the earnings of the top male executives. They also did a separate calculation excluding CEO pay, which dramatically skews the earnings totals, and found a somewhat more heartening figure of 77 cents for women for every dollar earned by a man. Is this evidence that women are unilaterally getting the short end of the stick, as the news reports would have us believe?

The study and its accompanying press reports indicate that women, universally and systematically, are paid less than men. Two people in exactly the same job, with exactly the same experience, education, seniority, and talent; and one is paid 77 percent of the other’s salary simply because she’s a woman?

No, because earnings statistics cannot account for the myriad of choices, trade-offs, and abilities that constitute both our every day lives and particularly our work lives. Earnings data simply cannot measure the infinite combination of factors that make up real life. A number of factors contributes to the wage gap between men and women – including age, prior experience, educational attainment, seniority, company or department performance, and even salary negotiation skills.

One of the most critical indicators for high compensation is profit-and-loss responsibility. This year’s study did find a small increase in the number of women in "line" or profit-and-loss positions, which indicates more women are putting themselves on track to the CEO’s office, but also explains part of the pay differential between men and women that exists today.

Catalyst itself acknowledges the fundamental problem with drawing any serious claims of discrimination from these numbers. As the study’s authors explain, deep on page 29, "Unfortunately, controlling for all the variables at one time was impossible..." Of course, this fatal concession, conveniently buried, isn’t the stuff of headlines.

Sheila Wellington, president of Catalyst, told the Los Angeles Times: "This is a national problem that cuts across the whole economy. Corporations are no worse than every other part of the American economy." Those are the soundbites that encourage the perception of victimization, and ultimately undermine those women who continue to make extraordinary professional strides.

— Katherine Post

PRI Senior Fellow,

Women's Studies