The Gender Pay Gap

Liberals, such as those at the New Republic, are still clinging to that 77% statistic when writing about the gender pay gap, you know, the one where liberals claim that women earn only 77% of what men earn, implying discrimination (see here). The number is ambiguous and misleading, but that doesn’t stop liberals from using it over and over to disparage Republicans with a “war on women” that liberals have imagined and attribute to Republicans.

As economist Thomas Sowell, who has studied and written about discrimination in a variety of contexts around the world, points out in his book Basic Economics:

The question as to whether or how much discrimination women encounter in the labor market is a question about whether there are substantial differences in pay between women and men in the same fields with the same qualifications.

The 77% statistic doesn’t even address this question, and as it turns out, there is little difference in pay between women and men with similar work backgrounds.  According to Sowell, among men and women who worked continuously from high school to their thirties, single women have tended to earn slightly more than men. And this has been true for almost half a century, from as far back as 1971.

It makes no economic sense that women should earn only 77% of similarly qualified men. If true, employers in a competitive market would rush to hire them as a way to lower their costs and gain an advantage over their rivals. The firm that discriminated against women would incur higher costs and soon be out of business. The increased demand for women would raise their pay at the same time that reduced demand would lower the pay of men until equality was achieved.

A competitive market would frustrate any bad intentions of employers. Indeed, gender discrimination by governments, which are not subject to market forces, has been greater than firms operating in competitive markets.  In addition, government interference in the market, in the form of minimum wage laws, for example, makes it less costly for firms to discriminate by creating an excess supply of workers and reduces the natural tendency of markets to eliminate discrimination.

Sowell argues that the 77% statistic and the disparity between men and women is not necessarily about discrimination, but must be examined by considering several other factors that affect income, such as occupation and educational choices, and the extent of continuous employment.

Women in general give birth to children at some point and many stay out of the labor force for some time because of this, which cost them “workplace experience and seniority,” and results in lower incomes than men who have been “working continuously in the meantime.” Women who have children also earn substantially less than women who do not.

Liberals are aware of the real reasons for the gender pay gap as seen in their calls for changes in the workplace that would encourage women to stay in their jobs longer after having children and encourage men to take more time off. But the 77% number presents liberals with an opportunity to disparage and insult Republicans with the ever popular “war on women” slur and liberals cannot resist the temptation to do so, no matter how unfounded.

The focus on the 77% statistic also represents a desire on the part of liberals to deny the natural biological differences between men and women. So the liberal remedy for the pay gap, i.e., complete equality, is yet another attempt to create a society as unnatural (and unjust, by the way) as possible. Liberals love pounding square pegs into round holes.

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