Mythbuster: the truth about gender wage gaps
It is commonly said that women are systematically discriminated on the labor market and earn just 75-80 cents on the dollar that men earn. For examples of such statements, see the following articles:
- College-educated women earn $8,000 less a year than men as gap widens
- Looking for ways to tackle the gender pay gap
- The gender pay gap means that more women will be in poverty later in life, but there is something the government can do
In an effort to close the gap, President Obama has announced a plan in which businesses would be required to report the gender wage gap.
https://www.youtube.com/watch?v=9QDMeSiwTLQ
What I would like to do here is to dismantle this myth.
Dismantling the gender wage gap myth
You can easily knock down the myth with the following deductive reasoning:
1. Assumption: women earn just 75% of what men earn.
2. Employers compete with each other for labor.
3. Under competitive pressure, employers hire women that are capable to perform the same labor as man.
4. Demand for women labor increases until employers don’t benefit anymore from discriminating against man for their labor.
5. Gender wage gap decreases towards 0.
6. Men and women earn the same wages for the same labor.
What I have described up here is how the labor market would work if women would indeed earn just 75% of what men would earn for the same labor. A gender wage gap for equal labor is untenable in the free market. If there were a gap, the gap would naturally close.
Are people wrong when they say women earn 20-25% less than men on average?
No, these people are not wrong. It’s true that women in general earn 20-25% you add all women’s wages and compare that to the total wages of men. This however, tells us nothing about whether women are systematically discriminated on the labor market for lower wages.
We should adjust for age, career choices, experience, job, job position, the amount of hours put into work, ambitions etc. If we adjust for these, we will find that the gender gap is negligent. There is maybe a 1-2% difference in wages, but I think that this is due to men willing to stand stronger in their shoes during wage negotiations.
There are quite some economists who have also disproved the myth of the gender wage gap. Prof. Steve Horwitz has for example deconstructed the gender wage gap in the following video very nicely:
https://www.youtube.com/watch?v=EwogDPh-Sow
Why is it important to smash this myth?
The gender wage gap is often used as an argument that women are victims in society. If we can prove that the gender wage gap is false, we can show that the free market is much fairer than it appears. False victimization can be abused, especially when its so-called victims use their false sense of victimization to blame the other gender of oppression. It leads to a polarization of society – something we have to beware of.
All sorts of love coming your way for this post! And the first time I've seen a Horwitz vid here, which is cool. Steve was kind enough to help me with a high school econ course I taught a few years back. I used a textbook for younger kids that I had written, but he gave me an awesome lesson plan regarding the Lorax Seuss story. I wish he would join Steemit!
Ah, that's cool man - having Horwitz as your professor! Maybe we should send him an e-mail to ask whether he would like to join Steemit. Are you familiar with the libertarian anarchist Prof. Gerard Casey? He was my professor, and I am planning to send him an e-mail on Steemit as well. It would be good to introduce more academics. Their insights will be very welcomed here, I think. :)
No, he wasn't my professor. Just a Facebook friend and he sent me some info for a class I was teaching. I may IM him and see if he has any interest. No, I'm not familiar with Casey. Jeffrey Tucker follows me on Twitter (@libertarianarts) and we're also FB friends, but when I asked him about Steemit I got no response. I'm not in the inner circle, so I'm not sure my suggestions carry any weight. BTW, I also just friended you on FB - that gray-haired lady is me. :)
Oh, I'm sorry. I automatically assumed he was your professor. My bad. Great to have you on FB btw. It's my pleasure to know you.
I believe in the law of supply and demand. Let the market say how much is the wage.
Yes, and the market will narrow down the gap naturally. :)
Been screaming this for years
Haha, I've been screaming this for years to some of my feminist friends, showing them reports etc. and they still haven't accepted that the Gender Wage Gap is a myth. I've come to realize that many people don't really care about injustice. They care more about the thought of them pursuing a noble ideal. -_-'
NB: I just looked at your profile and some of your past posts. Your writings are very interesting. I hope you will get more upvotes, because I think they deserve higher rewards. I've started following you now.
This will work itself out sooner rather than later due to women out-enrolling men in most colleges and universities.
Yes. Women in their 20's are already outperforming their male counterparts.
https://www.theguardian.com/money/2015/aug/29/women-in-20s-earn-more-men-same-age-study-finds
@chhaylin
Here is Thomas Sowell nailing it
@kyriacos, GREAT video man. Thomas Sowell always makes so much sense! :D
@chhaylin
yeap. one of my favourite spokesmen on libertarianism
Steemon
Is that like saying: "keep up with the good work"?
Good post Lin.. :)
Thanks, Lem!
Upvote for anyone who values FACTS over FEELINGS
Thanks, man! :D
Very logical, but certain people will refuse to believe the facts as they benefit from the lies. Working part time at McDonald's flipping burger patties and getting paid the same amount as a neurosurgeon performing surgery, I'm sure we all know people who would want to be flipping burgers if that were the case.
The pay gap is around 15-25% depending on the country (in western countries), this is accurate. The problem is that a lot of people think this means a woman is paid 20% less for the same work, which is simply not the case and leads to a lot of anger and arguments.
This statistic simply compares the average earnings of full time working men vs full time working women. It does not factor any of the following:
-Men work longer hours, around 4 per week on average (10%)
-Men choose to work in higher skilled and higher paid professions eg engineering vs childcare
-Men are more likely to move geographically to follow higher paying work
-Men are more likely to take on jobs with a safety risk premium such as mining and construction
-Women often take career gaps to care for family which lowers their experience relative to male counterparts
Studies usually estimate that the discrimination portion of the gap, ie the part of the gap that is due to sexism is around 1-5%. Although some studies are beginning to find that women are now paid more for the same work.
Equal work for Equal pay should be the goal, and freedom of choice.