Saturday, May 20, 2006

Women and wages 

Here's a puzzle: If the feminist complaint that women are paid less than men for performing the same work is true, how is it that men can get a job? Why wouldn't any employer with an ounce of greed hire all those cheap, highly productive women? The conventional lefty answer is that gender discrimination is rife. Indeed, it may have been back in the bad old days when American multinationals were not under constant pressure to improve their financial performance. However, those days disappeared in the 1980s with the rise of various means for disciplining public companies that were not relentless in their pursuit of superior financial performance. So what's going on?

According to Warren Farrell, writing in Forbes, women are on average making different choices than men, and when they don't they are actually making more money than their Y-chromosome impaired counterparts.

When I was on the board of directors for the National Organization for Women in New York City during the 1970s, I led protests against the pay gap. I wore a "59 Cents" pin to reflect my objection to the discrimination I felt was the cause of women earning only 59 cents to each dollar earned by men. Now, since I'm a husband and father, discrimination against women isn't just political, it's personal.

But one question haunted me through the years: If an employer has to pay a man one dollar for the same work a woman would do for 59 cents, why would anyone hire a man?...

After more than a decade of research for my book, Why Men Earn More, I discovered that men and women make 25 work-life choices that actually create a wage gap. Men make decisions that result in their making more money. On the other hand, women make decisions that earn them better lives (e.g., more family and friend time).

But what happens when women make the same lucrative decisions typically made by men? The good news--for women, at least: Women actually earn more. For example, when a male and a female civil engineer both stay with their respective companies for ten years, travel and relocate equally and take the same career risks, the woman ends up making more. And among workers who have never been married and never had children, women earn 117% of what men do. (This factors in education, hours worked and age.)

As Will Franklin wrote, "cool."


By Anonymous Anonymous, at Sat May 20, 09:45:00 AM:

It's a simle bit of reasoning for simpletons.Any statistical imbalance must be caused by discrimination.It's why white sprinters haven't broken 10 flat in the 100 meters;their lanes are curved so they run a few meters more  

By Blogger Lanky_Bastard, at Sat May 20, 05:31:00 PM:

I've known women in competitive fields, (like tenure-track professorship or medicine) who lament that men can work 80 hour weeks and miss their children's activities without being considered "bad fathers" yet if they make the same trade-off they're considered "bad mothers".

I think there's a fair approximation of equality in the work environment (if anything there are additional incentives for women in engineering), but maybe not in societal expectations.  

By Anonymous Emily, at Sat May 20, 07:42:00 PM:

There are lots of intangibles that determine pay rate. The "societal expectations" that LB talks about are several millenia old at least. Women aren't the same as men. Tough luck, but it's true. Societal expectations come from real differences, to a large extent.  

By Blogger Assistant Village Idiot, at Sat May 20, 11:23:00 PM:

The free market isn't just about making money. We all make trades in what we could earn in order to have other things: a safer or more congenial work atmosphere, a job in a certain place, more time with family, more hope for advancement, feeling one's job has meaning. The beauty of the system is that money is not the only thing you measure by (conventional wisdom to the contrary). Most people can make enough $ so that they can make other choices, trading added income for something they like better.  

By Blogger Brian H, at Mon May 22, 08:21:00 PM:

The interesting question this all raises is whether the "choices" women make that hold their pay down actually reduce the value of the time they put in. It's irrelevant, in a sense, that the career-path women make as much or more overall. On job X, does a 59ยข woman do as much work/hour, of equivalent or better quality, than a $1 man?
If so, it remains true that that would be a situation in which a savvy employer can get much more value for his wage costs by hiring a woman. That is, there is/should be a strong economic incentive to consider a woman first for any potential hire where the willingness and ability to readily compromise personal life is not a serious job requirement.

The other major consequence of the overall dis-preference for women is that the pool of very well qualified and bright women available for virtually any position should be full to overflowing, making it easier to get a top employee from that pool.

But economic forces like that work rapidly and perfectly only in the presence of perfect information, which is the fictional, assumptive worm at the heart of many economic theories and predictions. Unless buyers KNOW the true comparative values of the goods they are looking at, they are likely to make irrational choices based on habit, preference, image and emotional push-button responses. (If this were not true, sales and marketing would be a much shrunken and purely data-driven profession, instead of the hypertrophied morass of manipulation and deception that it now is.)

So the "prejudice" argument is valid insofar as employers are missing many opportunities to upgrade their staff. If they were to do so, competition would raise the comparative earnings of women somewhat, but only to the point that personal lifestyle conflicts with "valid" workplace requirements begins to kick in.  

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