You Can Put a Woman on the $20 Bill, but it's Still Only Worth $13 to Some
On Wednesday, Treasury Secretary Jacob Lew announced that President Andrew Jackson is getting the boot—Harriet Tubman will replace him on the $20 bill. The news is a first in two respects: (1) the first African-American to be depicted on American currency, and (2) the first woman to be depicted on American currency in over 100 years. But, despite the symbolic honor of these advances, the decision to portray Harriet Tubman on the $20 bill only highlights another issue that needs addressing.
In terms of the overall economy, women earn roughly 78% as much as men. Stated another way, for every $20 a man earns, a woman earns only about $16. To make matters worse, African-American women earn only 63% as much as white men. This means that, generally speaking, if a white man were paid $20 for his work, Harriet Tubman would only earn $13.
Despite this fact, politicians such as Donald Trump and Ben Carson have suggested that Harriet Tubman would be better suited for the $2 bill rather than the $20 bill.
The Gender Gap (%)
Income inequality between men and women has continually declined since 1973, but the gap has stagnated around 20% in the last decade. The past success in closing the wage gap is largely credited to anti-discrimination efforts and the removal of barriers preventing women from entering the labor force. The decade-long stagnation, however, may indicate that new approaches are needed to close the wage gap further.
According to a report published last month by Glassdoor, the wage gap between men and women becomes significantly smaller when a laborer's job title, location, and employer are taken into account. Glassdoor also surveyed 4 other countries to demonstrate how the United States compares.
As for the United States, there is only a disparity of 5.4% in "adjusted" wages between men and women—those with the same job title, working for the same employer, and in the same location. This large reduction in the wage gap indicates that the economy-wide disparity is not being driven by intentional gender discrimination at the employer level.
In light of these findings, it seems that increased efforts to end intentional gender discrimination may not solve the problem of women earning considerably less than men. According to Glassdoor, "occupation and industry sorting of men and women into systematically different jobs is the main cause" of income inequality across genders. Relative to their male counterparts, a larger quantity of women are being "sorted" into occupations and industries that simply pay less economy-wide than other occupations and industries.
Reversing intentional gender discrimination, although still an important goal, would not close the 22% wage gap. The primary problem to be remedied is the system-wide sorting of women into lower-paying jobs by our free market economy. While efforts to curb gender discrimination have reduced the wage gap from 38% in 1973 to 19% in 2005, it will take the continued empowerment of women to shrink that gap further.