Wage and Salary Chapter 1

But this measure masks tremendous variations. When educational choices are taken into account, women’s earnings are 94 percent of those of men. For people age 21 to 35 who live alone and have no children, the gap is close to zero. (Of course, this constitutes a very small segment of the labor force.)2 The gap even varies by cities. Most people were surprised when 2000 census data showed that women in Wichita, Kansas, earn about half of what men earn but that women in Oakland, California, earn more than men.3 Sometimes differences in compensation among countries are listed as a cause of loss of jobs from more developed, higher-wage economies to less developed ones. As Exhibit 1.1 reveals, labor costs in Mexico are about 12 percent of those in the United States. However,
1E. Lawler III, Rewarding Excellence (San Francisco: Jossey-Bass, 2000); Patricia Zingheim and J. R. Schuster, Pay People Right! (San Francisco: Jossey-Bass, 2000); B. Gerhart, “Pay Strategy and Firm Performance,” in Compensation in Organizations: Current Research and Practice, eds. S. L. Rynes and B. E. Gerhart (San Francisco: Jossey-Bass, 2000); B. E. and Mark Huselid, “High Performance Work Systems and Firm Performance: A Synthesis of Research and Management Implications,” in Research in Personnel and Human Resources, ed. G. Ferris (Greenwich, CT: JAI Press, 1998); Barry Gerhart and Sara Rynes