CEPR - Center for Economic and Policy Research


En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press Two Pinocchios for the President?

Two Pinocchios for the President?

Thursday, 10 April 2014 06:12

Glenn Kessler, the Washington Post fact checker, gave President Obama two Pinocchios for saying that women earn on average just 77 cents for every dollar that men earn. Kessler makes some valid points as to why this number overstates the gap. First it is an annual number that doesn't take account of the fact that women are more likely to work part-time and part-year. It is also true that women typically have less work experience because they take time out of the paid labor force.

These and other factors (some of which go in the other direction) would be important items to take into account in a full examination of gender inequality. But has President Obama really committed a two-Pinocchio offense by using a number straight out of Census data without these additional qualifications?

Context is always great, but unfortunately President Obama's use of the Census pay gap number hardly stands out as an out of context statement by a politician. My favorite in that category was the $1 million spent on a museum of the Woodstock music festival that Senator McCain used as one of his main props in his 2008 presidential campaign. Does anyone think McCain's complaint about government waste and excesses would have packed the same punch if he told audiences the government had spent 0.00003 percent of its budget on a Woodstock museum? (On this score, why do the Post and other newspapers continue to express budget items exclusively in billions and trillions of dollars when everyone knows these numbers are meaningless to almost their entire readership?)

Unfortunately, making comparisons that don't convey the full context is a practice that extends beyond politics into the policy world. A couple of years ago, Pew Research Center issued a widely cited study that purported to show growing disparities in wealth between the old and the young over the last quarter century. The study neglected to mention the fact that one of the main contributors to the growth in an age related wealth gap was a switch from defined benefit to defined contribution pensions and the rapid disappearance of retiree health insurance.

In the Pew analysis, a defined benefit pension plan (which most middle class workers would have had in 1984, the base year for the analysis) does not count as wealth, while a defined contribution plan does. Also, workers with retiree health benefits would need to save less to provide for their health care expenses in retirement. These benefits also would have been a form of uncounted wealth in 1984 that would have been available to most middle class workers.

Wealth is also a dubious measure of the well-being of young people. A 30-year old Harvard MBA who has negative net wealth of $150,000 due to student loan debt should not be considered to be in difficult economic straights. What will determine the well-being of young people is the state of the labor market they will face over their working career, whether they have $10,000  more or less in assets by the time they are age 35 will be barely noticeable in comparison.

Anyhow, if we applied the Kessler Pinocchio standard to this Pew study, it would likely score at least a three, if not a four. It is unfortunate that we routinely have facts and numbers given to us out of context, but President Obama, in using standard Census data in referring to the gender pay gap, hardly ranks as one of the bigger offenders in this town.

Comments (9)Add Comment
Up His Nose With a Rubber Hose
written by Larry Signor, April 10, 2014 9:15
President Obama is using census data to highlight a problem we know exists. He is not proposing policy solutions based on these figures. The figures are data points that highlight the depth of the problem. And that's no lie, boss.
written by TK421, April 10, 2014 9:17
has President Obama really committed a two-Pinocchio offense?

Of course he has. Most people who hear the statement "women earn 77 cents for every dollar a man earns" will assume that statistic accounts for differences in hours worked, educational certification, and specialization, when it actually does not. The president is trying to make people think he is addressing a real problem since he doesn't feel the need to do anything about unemployment, alternative energy, increasing militarism, crumbling infrastructure, etc. etc. etc.
Our President deserves many, many Pinocchios
written by ifthethunderdontgetya™³²®©, April 10, 2014 10:18
But not for this.

He deserves them for servicing the banksters, and leaving the rest of the population to the untender mercies of our multinational corporations.

However, a centrist hack will never call out Obama for this, because he serves those same corporations.
Advocacy statistics
written by jroll, April 10, 2014 12:59
Dean, the gender pay gap statistic is more than frequently cited, such that even people outside of Washington have heard of it.

I for one have never heard of this Pew study until today and a Google search for "old young wealth gap" returns links mostly from 2011.

There may be ideological or political reasons for uncritically citing the various pay gap numbers, but I'm at a loss as to why it makes sense if the goal is to inform people.

The generational war is no doubt important, I just don't see the relevance here.

A few things:

1. There is apparently now an "National Equal Pay Day".

2. Betsey Stevenson has been defending the 77 cents number saying "I don’t think there’s a better figure".

3. Ezra Klein's new site has already published several articles on it. Including Matt Yglesias's acknowledging the issues with the number and yet strangely dismissing them.

4. Rachel Maddow frequently cites the number on televison. Here she is suggesting that controlling for occupation is stupid: http://mediamatters.org/video/...ial/198813

Ironically, the other day Krugman, prompted by Klein's article on politics making people dumb, suggested liberals and conservatives were qualitatively different when faced with unpleasant facts.
More Maddow
written by jroll, April 10, 2014 1:17
What's the true gap?
written by Keith, April 10, 2014 1:34
Women make less than men on average but after correcting for education, experience and occupation (women tend to work in lower paying jobs) what is the "true" difference? I have two daughters in technical occupations that are male-dominated. They think they've had an advantage in the job market--in pay and job offers--because of gender. But that's just an anecdote.
written by John Reagan , April 10, 2014 6:44
In 2010 the median income of FTYR workers was $42,800 for men, compared to $34,700 for women. The female-to-male earnings ratio was 0.81, slightly higher than the 2008 ratio.[2] The female-to-male earnings ratio of 0.81 means that, in 2009, female FTYR workers earned 19% less than male FTYR workers. The statistic does not take into account differences in experience, skill, occupation, education or hours worked, as long as it qualifies as full-time work. However, in 2010, an economist testified to the U.S. Congress Joint Economic Committee that studies "always find that some portion of the wage gap is unexplained" even after controlling for measurable factors that are assumed to influence earnings. The unexplained portion of the wage gap is attributed by some to gender discrimination.[3]:80

The estimates for the discriminatory component of the gender pay gap include 5%[4]:2 and 7%[3]:9 and in at least one study grow as men and women's careers progress.[3]:93 One economist testified to Congress that hundreds of studies have consistently found unexplained pay differences which potentially include discrimination.[3]:80 Another criticized these studies as insufficiently controlled, and opined that men and women would have equal pay if they made the same choices and had the same experience, education, etc.[4]: Other studies have found direct evidence of discrimination. For example, fewer replies to identical resumes with female names[3]:10 and more jobs went to women when orchestras moved to blind auditions.[4]elcqt
written by urban legend, April 11, 2014 1:06
These figures were never particularly controversial until Republicans decided to start making an issue of them. Everyone has always known the main number published by BLS is an average of all occupations, and there are many differences and complexities to the whole story. But whatever, Republicans now have no positive agenda whatsoever, and exist now solely on attacking "liberals."

Glenn Kessler always has his finger to the wind, and figures he now needs to give the President the two Pinnochios or else the right-wing noise machine will come crashing down on him. The people defending Kessler and wagging their fingers and acting all self-righteous, at least the ones not wallowing in being the gadfly, are doing essentially the same thing. 77% is the number BLS published at the time. There is nothing misleading or deceptive about using it. An "on average" disclaimer is the most that's needed for 100% accuracy -- and the president did that -- although even that is really unnecessary because everyone knows that's what it is. If I say a majority is in favor of something, I'm not obligated to point out that many people are against it.
written by urban legend, April 11, 2014 1:30
Of course, what could be profoundly stupider than thinking you somehow have scored points and found a "true" measure "after correcting for education, experience and occupation (women tend to work in lower paying jobs)?"

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.


Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.