Tuesday, January 31, 2012

Provo women earn some of the lowest salaries in the largest U.S. Metropolitan Areas

Women in Provo have some of the lowest average salaries in the country, according to a Forbes analysis of the 2010 American Community Survey by the U.S. Census Bureau. Provo women are making on average less than $37,000 a year, according to the report. Provo women are making on average less than $37,000 a year, according to the report. Deseret News

Since I am interested in women's labor force issues and don't usually look at this type of data below the statewide level, I took the opportunity to look at the actual Forbes article. Forbes  used 2010 American Community Survey data for "large" Metropolitan Statistical Areas (MSAs) and focused on females working year-round and full-time. Unfortunately for comparative purposes, Forbes doesn't tell us what they considered a large MSA.

With median female earnings for year-round, full-time workers of $31,400, the Provo/Orem MSA ranks 249 out of 374 MSAs nationwide. Incidentally, the "smaller" MSAs of Logan and St. George showed lower female median earnings ($27,100 and $26,700, respectively). Other large Utah MSAs appear higher in the rankings--Salt Lake ranks 154, while the Ogden/Clearfield MSA ranks in the 200 spot.

However, keep in mind that areas with low female earnings might also have low earnings for both genders. In other words, an MSA's low female earnings may be reflected in low male earnings as well. Cost of living, age of the labor force, industrial mix, etc. affects wages generally. . .not just for women. In my mind, the true question perhaps should be: How do men and women's earnings compare in Utah's most populous communities?

In 2010, U.S. median earnings for women working year-round, full-time measured 78.6 percent of the comparable male figure. (This wage gap has contracted decidedly in recent decades.) How do Utah's MSAs stack up? Honestly, not so great. The Ogden/Clearfield MSA shows a female/male wage ratio of 63 percent, the Provo/Orem MSA shows 65 percent ratio. Logan's ratio measures 70 percent, and St. George's figure is 71 percent. Even in Utah's best MSA performer--Salt Lake City--the female median wage measures only 74 percent of the male median wage. More than 70 percent of the nation's MSAs show female/male wage ratios better than Salt Lake City.

What's up? Why the low female-to-male wage rations in Utah? Undoubtedly many factors come into play. However, one major influence on the large difference in wages seems to come to the forefront. I call it the "education gap" and it is a primary factor behind Utah's larger-than-average wage gap. Statistically, there is a well-know relationship behind one's earnings and one's education. In general, the higher a person's level of education, the higher their earnings.

What's the education gap? By my reckoning, it is simply the percentage point difference between the share of the male population (over 25) with at least a Bachelor's degree and the share of the female population (over 25) with at least a Bachelor's degree. Nationally, there is a six-tenths of a point difference in the share of men and women with at least a Bachelor's degree (28.5 percent and 27.9 percent, respectively). In other words, in the U.S. there is currently very little difference between the share of men and women with a four-year degree or better.

The three MSAs with the largest male/female education gap in the nation? Number 1--Provo/Orem, Utah (11.3 percentage points). Neck and Neck for the number 2 spot--St. George, Utah (9.8 percentage points) and Ogden/Clearfield, UT (9.8 percentage points). Logan's performance is somewhat better--"only" a 4.2 point difference. The Salt Lake MSA managed the smallest Utah education gap--still large at 2.5 percentage points. Every single Utah MSA ranked among the 20 percent of MSAs with the largest education gaps.

Keep in mind that in 40 percent of the nation's Metropolitan Statistical Areas, a higher percentage of women have obtained a Bachelor's degree than have men. If Utah's women are falling far behind men in educational attainment, it should come as no surprise that they are falling far behind men in earnings.