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L. Neil Smith's THE LIBERTARIAN ENTERPRISE Number 290, September 26, 2004 "Taxation With Representation"
Wage Gap Reflects Women's Priorities
Special to TLE An Aug. 26 report from the U.S. Census Bureau stated that the median female full-time wage for women was 75.5 cents for every dollar similarly earned by men; that's down .6 percent from 2002. (See Table 1.) Gender feminists quickly cried "discrimination is increasing!" Is that charge true, and how is it being used? The Institute for Women's Policy Research immediately issued a press release that used the 75.5 figure to call for a raise in the minimum wage and improved enforcement of equal-opportunity laws. But there may be no problem to solve. For one thing, the .6 percent could be an insignificant statistical variation, especially given that women's wages have risen consistently over the last decade. For another, a survey is not a scientific study; it only indicates that something may deserve more attention. It does not explain why there is a wage gap. In 2003, the U.S. General Accounting Office observed, "Of the many factors that account for differences in earnings between men and women, our model indicated that work patterns are key. "Specifically, women have fewer years of work experience, work fewer hours per year, are less likely to work a full-time schedule, and leave the labor force for longer periods of time than men." The GAO cautioned that it could not "determine whether this remaining difference is due to discrimination or other factors." For example, some experts said that some women trade off career advancement or higher earnings for a job that offers flexibility to manage work and family responsibilities. In short, more women than men may seek out lower-paying jobs with flexible hours in order to spend time with their families. If so, when you take two checklists, one of women's and one of men's full-time jobs, and go to the exact middle of each, the median, women's wages will naturally be less than men's. But what about comparable full-time jobs? What could account for a wage gap there? Consider just two possibilities. First, the definition of full-time employment: Most surveys define it as 35-plus or 40 hours a week. But a tremendous difference exists between an employee who clocks 40 hours and one who works 60. For the same reasons women would seek flexible hours, they also are likely to work fewer hours in a full-time job. Raises, bonuses, and promotions more naturally flow toward employees who work longer hours. Indeed, when you factor out variables like having children, the wage gap virtually disappears. In their book "Women's Figures" (1999), economist Diana Furchtgott-Roth and Christine Stolba meticulously compared data on the earnings of childless men and women aged 27 to 33. They found that the wage gap shrank to 98 cents. A second possible reason for the "wage gap": Surveys do not usually account for factors such as "shift premiums." That is, shifts that are dangerous or otherwise undesirable are more highly paid and more likely to be filled by men. Working the day shift as a cab driver is not really equal to working the more dangerous night shift, but it is usually treated that way by surveys. The resulting disparity in wages has nothing to do with discrimination against women. It reflects the preferences of women themselves. If this is true, then the wage gap is not a problem to be solved. It is merely an interesting statistic indicating that men and women, when offered a level playing field will tend to express different priorities and, so, end up at different places. (This is a crude generalization, of course, and says nothing of individual men and individual women.) People, like me, who argue that the wage gap is mostly an reflection of women's preferences are often accused of caring nothing for equality or justice. A more accurate statement is that it is a different vision of equality and justice. For decades, two visions have been competing with each other in the debate surrounding the wage gap. The first view—the one presented here—argues for equality of opportunity. That is, every individual's ability to exercise his or her individual rights to person and property should be equally protected by law, with advantages granted to none. Such an equality of opportunity would inevitably render unequal results in wages, for example—because outcomes depend on many other factors, including ability, hard work, character and luck. The inequality of outcomes is not an indication of injustice, because justice resides in every individual receiving what he or she deserves. Employees who compete with equality of opportunity deserve whatever they can negotiate from an employer based on their merits and his needs. That's justice. The competing vision defines equality as the outcome in which people are politically, economically and socially equal. Justice is gauged by how equally all people share in those benefits. This view is often called egalitarianism. Winston Churchill captured the difference in stating: "'All men are created equal' says the American Declaration of Independence. 'All men shall be kept equal' say the Socialists." Nothing short of totalitarianism can assure the latter. The wage gap is, in fact, telling us something that should be heeded about society and human preference. Egalitarians should listen more carefully to what is being said.
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