The Gender Wage Gap & Liberal Economic Superstitions

Consider two groups of people, Group A and Group B. The people in Group A tend to major in engineering, math, and/or computer science. Those in Group B prefer careers in English, education, and psychology, and they usually stop in mid-career and drop out of the full-time workforce for a few years.

Who do you think will earn more during their working lifetime, Group A or Group B?

Duh, Group A.

Imagine a world where people who claimed to be intelligent and concerned with “social justice” insisted that the lower earnings in Group B must be the result of “discrimination.”

You don’t have to imagine it. You live in that world. Welcome to the lie of the Gender Wage Gap.

Men are Group A. and women are Group B.

The insanity reached new heights in this Washington Post editorial by Catherine Rampell. Rampell points to some very weak reasons that she thinks we should believe that recruiting more women in the workplace will boost profits. One argument from films is not even relevant to anything. Her claims about “group intelligence,” if accurate might apply to a few professional positions.

But the best argument she offers shows that wishing for equal pay is actually a way of wishing that fewer women get jobs.

Smart employers will recognize a bargain when they see it and scoop up the undervalued talent. Way back in 1983, Alan Greenspan explained this in an interview about his own hiring preferences: “I always valued men and women equally, and I found that because others did not, good women economists were cheaper than men. Hiring women does two things: It gives us better-quality work for less money, and it raises the market value of women.’’

Great idea! But what happens if employers are coerced to only hire women if they will pay them more? The answer is self-evident: more women will be un- or underemployed.

Then Rampell’s argument ties itself into a pretzel. She next claims that it is not enough to try to hire women at this bargain rate. She says that employers must—contrary to what she has just said—pay them more.

Perhaps these arguments sound beside the point; few are really arguing against hiring women these days. Indeed, law firms, Wall Street banks, tech companies and other big, male-dominated businesses have all sorts of outreach programs to identify and nurture female talent (especially, it seems, when the stuff is about to hit the fan: witness the unfortunate timing of Mary Barra’s coronation at General Motors). And yet female representation across these industries and occupations — especially in management positions — is alarmingly low.

That’s because lip service isn’t enough. Corporate policy matters, too. As long as firms are resistant to changes that will help attract and retain female talent — like more flexible work arrangements, which can actually boost worker productivity — they will be limiting their own potential as well as that of female workers.

I’m skeptical about the claim that these arrangements are likely to boost worker productivity. You can read her linked evidence and see for yourself. But she is essentially admitting that women don’t want these jobs in the first place! They don’t want the inflexible jobs that men are willing to work at. Employers are supposed to come up with “more flexible work arrangements” that accommodate the desire of women. The reason women aren’t working at higher paying jobs in greater numbers is that they don’t want the jobs!

If a woman has something of value to offer that is worth the extra effort, or if a woman is willing to work for low enough pay that makes the “flexible arrangements” worth the expense to the employer, then she will probably get what she wants sooner or later.

But Rampell is proposing that corporations go to special trouble to hire women. That is the opposite of saying women are a bargain. Such arguments, if they are heard, will actually make corporations want to hire fewer women rather than more of them.