Freedom of Choice versus the Gender Pay Gap Theory

Thanks to Christina Hoff Sommers, I finally understand the often-repeated gender pay gap issue (see Sommers’ Daily Best essay here).  Actually, one of my econ grad school  professors (a female) discussed this, but it faded from my memory until President Obama made a big claim about it during his State of the Union Speech:

President Obama repeated the spurious gender wage gap statistic in his State of the Union address. “Today,” he said, “women make up about half our workforce. But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.”

What is wrong and embarrassing is the President of the United States reciting a massively discredited factoid. The 23-cent gender pay gap is simply the difference between the average earnings of all men and women working full-time. It does not account for differences in occupations, positions, education, job tenure, or hours worked per week. When all these relevant factors are taken into consideration, the wage gap narrows to about five cents.

All evidence suggests that though young women have the talent for engineering and computer science, their interest tends to lie elsewhere. To say that these women remain helplessly in thrall to sexist stereotypes, and manipulated into life choices by forces beyond their control, is divorced from reality—and demeaning to boot.  If a woman wants to be a teacher rather than a miner, or a veterinarian rather than a petroleum engineer, more power to her.

The White House should stop using women’s choices to construct a false claim about social inequality that is poisoning our gender debates. And if the President is truly persuaded that statistical pay disparities indicate invidious discrimination, then he should address the wage gap in his own backyard. Female staff at the White House earn 88 cents on the dollar compared to men. Is there a White House war on women?

2 responses to “Freedom of Choice versus the Gender Pay Gap Theory

  1. The president’s assertion is just one more example of an incredibly false economic principle of the left. Namely, that people who run businesses control wages and prices. The left feels that businesses are quite free to charge too much and pay too little, and of course get rich in the process. Since those riches are illegitimately earned, taking them away is a moral necessity. Very neat!
    So if a company pays women less than they’re worth, the progressives would say that those abused women are stuck – they can’t quit and take another job somewhere else. Since they supposedly can’t, the market has no capacity to discipline the company. This is baloney.
    The market has worked out what people’s labor is worth. If McDonalds pays too much (because they’re compassionate) they’ll go out of business. If they pay too little (because they’re selfish) they’ll have no employees. The market determines the proper pay level versus the quality of the labor required and supplied. The market does not much care if the employee is male or female.
    Further study would show the true pay gap to be zero.

  2. While he may have many shortcomings, I do know that the President is not stupid. This “factoid” was purely a political ploy to pander to the female vote – where he has been quite successful. Typically, no one remembers a “State of the Union” address a year later or even a week later. That’s a good thing! Thanks.

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