Gender Pay Discrimination Can’t Survive In A Free Market
I’ve often argued that supposed gender pay discrimination is less the result of actual discrimination than of the differences in the way men and women approach their careers (not to mention certain inescapable biological realities such as the fact that women have the babies).
But at TownHall John Goodman points out that there’s another reason gender pay discrimination probably isn’t nearly as prevalent as some would have us believe:
The reason economists have trouble with the idea of rampant [gender] pay discrimination is that it defies common sense. Let’s say I own a company and I am employing only men. Is it really true that I could fire all the men, replace them with women and lower my cost of labor by 23%? If I could do that why wouldn’t I? If I were stupid enough not to do it, wouldn’t a competitor of mine do it and drive me out of business?
In other words, if workers received substantially different pay for doing the same job, an employer would have to be leaving a lot of money on the table by not hiring the lower-paid employees. (Remember, most people who believe in pay discrimination also believe most CEOs are selfish, money-grubbing sorts as well.) And it can’t just be one employer. In order for pay differentials to persist in entire industries, every employer in the market must be willing to discriminate — including the firms run by women!
It just doesn’t make any sense, but for some the mere existence of inequality is evidence of discrimination (and justification for all manner of policies including corrective discrimination in the form of hiring/admissions quotas).
For the most part, though, outcomes are the result of choices people make. Women make choices in education (pursuing studies that aren’t as marketable) and choices in their careers (women tend to value schedule flexibility, time off and other fringe benefits over pay) that result in wage disparities.
This is discrimination. This is outcomes reflecting choices.Tags: discrimination, gender bias, gender discrimination