As I work my way slowly, intermittently through Thomas Sowell’s rather large text, Basic Economics: A Common Sense Guide to the Economy, (4th ed., 2011), I find myself wanting to share, well, almost all of it. Of course, that’s not going to happen, but I will probably post on a few more topics from this book. Sowell’s goal in writing it was to present the often-intimidating topic of economics in a lay-friendly format, with no charts or graphs and a minimum of technical language. As I write this, I am about half-way through it, and I have to say that he succeeds in his goal. I love the variety of real-world examples and illustrations, too. (Though, to be honest, I wouldn’t mind a few simple charts/graphs.)
There has been some buzz in the news lately about “equal pay for women” and what certain politicians and activist organizations are actually paying their female staffers, etc. So, I figured I would post something about the discrimination against women in the labor force this week. Or, rather, I will let the distinguished Dr. Sowell share some of his knowledge and insights on the topic in his own words. In Ch. 10, “Productivity and Pay”, there is a section titled “Pay Differences” in which Sowell points out that it is the combination of supply and demand which determines pay, just as it does with the prices of other goods and services. But, he also discusses the various factors that go into the kinds of labor that are in demand and why some people are paid more or less than others. In particular, I would like to cite from a couple subsections titled “Differences in Skills” and “Job Discrimination”:
“[T]he dwindling importance of physical strength reduced or eliminated the premium for male workers in an ever-widening range of occupations. This did not require all employers to have enlightened self-interest. Those who persisted in paying more for male workers who were not correspondingly more productive were at a competitive disadvantage compared to rival firms that got their work done at lower costs by eliminating the male premium, equalizing the pay of women and men to match their productivities. The most unenlightened or prejudiced employers had higher labor costs, which risked the elimination of their businesses by the ruthlessness of market competition. Thus the pay of women began to equal that of men of similar qualifications even before there were laws mandating equal pay.”
Note that, while the next section is not specifically about women, I felt that the effort to get an understanding of what is meant by “discrimination” was important before going forward.
“While pay differences often reflect differences in skills, experience, or willingness to do hard or dangerous work, these differences may also reflect discrimination against particular segments of society, such as ethnic minorities, women, lower castes, or other groups. However, in order to determine whether there is discrimination or how severe it is, we first need to define what we mean.
Sometimes discrimination is defined as judging individuals from different groups by different standards when hiring, paying or promoting. In its severest form, this can mean refusal to hire at all…. [M]embers of different groups have been treated differently in laws and practices all around the world and for thousands of years of recorded history. It is the idea of treating all individuals the same, regardless of what group they come from, that is relatively recent as history is measured.
Overlapping with discrimination, and often confused with it, are employment differences based on substantial differences in skills, experiences, work habits and behavior patterns from one group to another…. While preferences for some groups and reluctance or unwillingness to hire others have often been described as due to ‘bias’, ‘prejudice’, or ‘stereotypes’, third-party observers cannot so easily dismiss the first-hand knowledge of those who are backing their beliefs by risking their own money…. Distinguishing discrimination from differences in qualifications and performances is not easy in practice, though the distinction is fundamental in principle. Seldom do statistical data contain sufficiently detailed information [to make such distinctions].”
Okay, now we get more into the discussion as applied to women in particular…
“Women, for example, have long had lower incomes than men, but most women give birth to children at some point in their lives and many stay out of the labor force until their children reach an age where they can be put into some form of day care while their mothers return to work. These interruptions of their careers cost women workplace experience and seniority, which in turn inhibit the rise of their incomes over the years relative to that of men who have been working continuously in the meantime. However, as far back as 1971, American single women who worked continuously from high school through their thirties earned slightly more than single men of the same description, even though women as a group earned substantially less than men as a group.
This suggests that employers were willing to pay women of the same experience the same as men, if only because they are forced to by competition in the labor market, and that women with the same experience may even outperform men and therefore earn more, but that differences in domestic responsibilities prevent the sexes from having identical workplace experience or identical incomes based on that experience. None of this should be surprising. If, for example, women were paid only 75 percent of what men of the same level of experience and performance were paid, then any employer could hire four women instead of three men for the same money and gain a decisive advantage in production costs over competing firms.
Put differently, any employer who discriminated against women in this situation would be incurring unnecessarily higher costs, risking profits, sales, and survival in a competitive industry. It is worth noting again the distinction made in Chapter 4 between intentional and systemic causation. Even if not a single employer consciously or intentionally thought about the economic implications of discriminating against women, the systemic effects of competition would tend to weed out over time those employers who paid a sex differential not corresponding to a difference in productivity. This process would be hastened to the extent that women set up their own businesses, as many increasingly do, and do not discriminate against other women.
Substantial pay differentials between women and men are not the same across the board, but vary between those women who become mothers and those who do not. In one study, women without children earned 95 percent of what men earned, while women with children earned just 75 percent of what men earned. Moreover, even those women without children need not be in the same occupations as men. The very possibility of having children makes different occupations have different attractions to women, even before they become mothers. Occupations like librarians or teachers, which one can resume after a few years off to take care of small children, are more attractive to women who anticipate becoming mothers than occupations such as computer engineers, where just a few years off from work can leave you far behind in this rapidly changing field. [NOTE: I can personally attest to this!] In short, women and men make different occupational choices and prepare for many of these occupations by specializing in a very different mix of subjects while being educated.
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 question as to whether there is or is not income parity between the sexes is very different, since differences in occupational choices, educational choices, and continuous employment all affect incomes. Men also tend to work in more hazardous occupations, which usually pay more than similar occupations that are safer. As one study noted, ‘although 54 percent of the workplace is male, men account for 92 percent of all job-related deaths.'”
There ya go! I think Prof. Sowell has demonstrated that the “discrimination” against women in the workplace is largely misunderstood, since much of what is commonly (but falsely) considered such is actually due to legitimate reasons (i.e., differences in skills, education, experience, and seniority), which, in turn, exist for valid reasons having to do with different interests and priorities in life. I have seen/heard other people try to make this point, but feminists and others who have bought into the whole “war on women” mindset don’t usually want to try to parse out the truth if it goes against their agenda.
If they would just accept that men and women are different, not interchangeable, perhaps they would be less likely to perceive so much “discrimination” that isn’t really there. This would result in less anger and stress, which would probably make them happier and more satisfied people. Just sayin’…