The “Wage Gap” Between Men and Women Is Phony

It is simply astonishing to realize how very gullible Western publics are, and how dunned by “progressives” into falsely believing there is some kind of systemic plot afoot to pay women less than men.

What follows is drawn from The Trouble With Canada … Still! (2010). It is a discussion of the false reasoning and even more false numbers underlying the male-female “Wage Gap” and also the reasons for the “Bachelor Wage Gap” and the “Ethnic Wage Gap” (which will likely never be brought to public attention because they undermine the radical case for “discrimination.”

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Feminists argue that there is a wage gap between the earnings of men and women (which is true, and always has been), and that much of this difference is proof of wage discrimination based on sex. But that is a plainly misleading and dishonest thing to say, because the biggest reason for the difference in male/female earnings today, is marriage. That is because marital status has an asymmetrical effect on earnings by sex, as the economists say.

In plain English: let’s suppose a man and a woman are working side by side and earning the same wage. They fall in love and decide to get married and raise a family. Suddenly something absolutely normal happens. Visions of children dance in their heads, along with simultaneous worries. If both think even the best daycare is impersonal—“there’s no way a stranger’s going to raise our kids.”—then they worry immediately about how in the world they are going to give their children personal attention and both work full time as well. Will her boss still keep her on if she asks for part-time work? He worries about mortgages, university education, clothing, food, and thinks: “Good Lord—I’m going to need a better job.” The result of this totally predictable equation is that she reduces her work hours, or quits altogether, or quits and then takes a part-time job. And he? Well, the pressure is on. He arranges an appointment with his boss and lets him know in no uncertain terms that the promotion he wasn’t so sure about last month . . . well, he’s had a serious change of heart. In fact, given a chance, he’d love to run the whole department. When this occurs millions of times over, and you average their respective earnings, you have the makings of a “wage gap.” But the crucial factor is not sex discrimination. It’s the laudable preferential choices made by both parties in favour of marriage and their children.

Read on to learn about the surprising “Bachelor” wage gap, and the “Ethnic” wage gap.

Most people fooled by wage-gap talk are shocked to learn that the ratios of earnings between never-married men and women, and ever-married men and women, in Canada, at least (tho I suspect this is true for most countries) have always been stable. As long ago as 1971 (when the feminist movement was in full delirium) a study compiled from Census data for Statistics Canada,[1] showed the following:

Ever Married           Never Married

Men                                                                $6,675                       $4,201

Women                                                          $2,217                        $4,170

 

The excellent American economist Thomas Sowell tells us that the same picture was found from the start in the U.S.A., that “as of 1971 single women in their thirties who had worked continuously since leaving school earned slightly more than single men of the same age, even though women as a group earned less than half as much as men as a group.” Yet another study in the U.S. showed that “female academics who never married, earned more than male academics who never married,” even before “affirmative action” became mandatory in 1971. Sowell summed up this confusion by saying that most of the current income and occupational differences between males and females as gross categories turns out, on closer scrutiny, to be differences between married women and all other categories.[2]

Almost two decades into the radical feminist era, a 1987 Statistics Canada report called “Earnings of Men and Women” still showed that never-married women made the following percentages of the earnings of never-married men:

never-married women             25-34 years of age:                  96.8%

never-married women             35-44 years of age:                  101.4%

never-married women             45-54 years of age:                  107.2%

never-married women

55+ years of age:                     102.4%

Astonishingly, the women made more than the men at all ages except the youngest studied. Fact is that if anti-female discrimination was at work, this would have been impossible.

Further, here’s some economic logic to put the whole mess to shame: if women were truly supplying business with cheap labour, business owners would naturally hire as many women as possible and would let the overpaid men go. But this has not happened. Further, one of the lowest-paying jobs around is that of an outdoor parking-lot attendant in winter—but you could count on one hand the number of females doing that job in a winter country. Is this therefore a male job-ghetto? Not likely.

Furthermore, if the feminist thesis were true, firms that are said to be “exploiting” low-paid women would be making large profits. But they are not. Most, in fact, are fighting tooth and nail to maintain competitive margins in the face of world-wide competition, especially in clothing, footwear, and food processing—all family staples.

Furthermore, women who have been widowed, divorced, or separated should not be averaged into the figures and used as proof for the lower pay of “single” women. Obviously, after years out of the job market, they cannot expect to return to the job market at high pay.

The Bachelor “Wage Gap”

There’s further, and rather dramatic evidence to support the effect of marriage on earnings: it turns out that bachelors, in both the U.S.A. and Canada, show the same 60-70 percent “wage gap” with married men, as do all women as a group.[3] The reason for this is the same: bachelors don’t need tons of money for family and children, so they don’t engage in as much income- and promotion-seeking behaviour. The result? They earn, on average, the same as married women. In fact, the Statistics Canada data referred to above showed that bachelors as a whole made 42.8 percent of the wages of married men as a whole in 1987. Is this discrimination against bachelors? Obviously not. And yet the exact same arguments can be applied. Will pay-equity supervisors soon be forcing us to pay bachelors the same wages as married men?

Canada’s Pay Police

What about the draconian program in use to bring about pay equity? If it weren’t so sad and ridiculous, it would be funny. Suffice it to say that the in the province of Ontario (much the same elsewhere) the plan for its “implementation” engendered a whole new class of paid bureaucrats, consultants, inspectors, and, let’s face it, pay police. These ordinary folks are empowered: to hear complaints from employees; to enter an establishment and seize records without warning; and to haul employers before their “pay-equity tribunal.” Clearly, the many pay-equity commissions dotting the landscape are kangaroo courts of the first order, empowered to “make final decisions of fact and law,” made up mostly of unionists, feminists, and “experts” who make their money at the social-policy trough.

If the cook in your staff kitchen decides that she deserves the same pay for rustling up hamburgers as your maintenance man down in the basement fixing the boilers—watch out. The pay-equity system is “complaint based,” which means she merely has to pick up the phone, and ask one of those friendly “inspectors” to drop in for a visit to your head office. These inspectors will evaluate her job—not her, but her job—in terms of four official categories: skill, effort, responsibility, and working conditions. They will then assign a “value” to each of these things, then run down to the basement, and do the same for the maintenance man’s job. For this unsubtle science they will use either the Hay Scale, or the Willis Scale (two of the most used scales). The fact that there are hundreds of aspects to every job and they consider only four is, of course, passed over elegantly.

The witty Fabian socialist and elitist George Bernard Shaw, who criticized the market system because it paid so much to prizefighters, wrote, “To suppose that it could be changed by any possible calculation that an ounce of Archbishop or three ounces of judge is worth a pound of prizefighter, would be sillier still.” Nevertheless, the Hay Study in San Jose California determined through “an objective point system” that a puppeteer’s job was worth 124 points, the same as the jobs of an offset-print operator and a street-sweeper. Of course no one can objectively compare, say, the pay of a great teacher with the work of say, Oprah Winfrey. Such evaluations are possible only by reduction, by reducing each job to aspects so common that you could walk an elephant through the subjective holes in the system. It’s like saying that because a one-ounce diamond and a one-ounce piece of lead weigh the same, they are worth the same. The Canadian economist Morley Gunderson wrote that “while comparisons across quite dissimilar jobs are possible in theory . . . the results of evaluation procedures become more tenuous the more dissimilar the jobs.”[4] And the ever-insightful Charles Krauthammer ridiculed the use of the Willis Scale in Washington state (where pay-equity legislation was eventually thrown out as discriminatory and unconstitutional by three judges of the U.S. Court of Appeal), saying that the scale is a mandate for arbitrariness:

every subjective determination, no matter how whimsically arrived at, is first enshrined in a number to give it an entirely specious solidity, then added to another number no less insubstantial, to yield a total entirely meaningless . . . everything is arbitrary: the categories, the rankings, even the choice of judges . . . there remains one factor wholly unaccounted for which permits the system to be skewed in any direction one wishes: the weight assigned to each category . . . Who is to say that a secretary’s two years of college are equal in worth to and not half or double the worth of—the truck driver’s risk of getting killed on the highway? Mr. Willis, that’s who.[5]

But . . . we’ve left the inspectors in the basement!

Suddenly, they dash breathless up the stairs and inform the President of the company that he (or she!) is guilty of wage discrimination based on sex. So the President is ordered to pay the cook the exact same wage as the maintenance man. Flabbergasted, he cries out, “If I could find a maintenance man at her rate, I’d hire him!” (“Pay her!” he is told.) “My hamburgers are three dollars. I’ll have to raise the price to twelve dollars each, no one will buy them!” (“Pay her!”) “If no one buys them we’ll have to shut down the kitchen. It’s losing money already!” (“Pay her!”) “There’s a hundred others who would love to have her job at what she’s making now!” (“Pay her!”) “I’m going to shut down the damn kitchen, it’s always been a pain in the neck to the whole organization. She’ll be out of a job, for all your bungling.” (“We’re sorry, we can’t help that. Thank you. Goodbye. We’ll send your records back sometime next year.”)

In a riotous story “Pastry Cook Pay Angers 8OO nurses” (Toronto Star, May 18, 199O), the full idiocy of these situations was revealed. The pay police were called in to “evaluate” the work of nurses, and equate it to male work of equal value. They decided, after much precision and deliberation that a nurse’s job was equivalent to that of a male pastry chef. Well, the outrage! The scandal! The “unfairness”! Florence Nightingale, a mere pastry chef? Well, this was very funny. So-called pay-equity was brought in to make pay more “fair” for certain groups of women who had voluntarily accepted their wages. But once the fairness judgement was rendered, these same women hit the streets, striking for “Fair Pay Equity” (Toronto Star, October 2, 1991). Jonathan Swift, that master of irony, must be laughing in his grave. It has never occurred to these women that if hundreds of them line up eager to take a low-paying job, they will get low pay. In a free society, pay is a function of an employer’s ability to produce a product for a price acceptable to consumers, and the worker’s willingness to accept the wage required to make the product. How could it be otherwise? Next, we will see demands for “Fair, Fair Pay Equity” – but…the employers will all have left town.

These little scenarios illustrate the arbitrariness, confusion, and failure in principle of the whole pay-equity scam. But this was inevitable as it was another male-style socialist idea, as are most of the radical feminists’ ideas, and as such it could never provide any basis for economic calculation. For there is no way to establish economic value outside of a voluntary market for goods and services. In other words, by its very nature, the value of anything can arise only from a cost/benefit transaction voluntarily entered into between free buyers and sellers (whether of labour or any other good). There can be imposed prices (that no one will voluntarily pay, or charge, except under duress). But there is no such thing as imposed economic value. In fact, nothing has any economic value outside a free market, because any amount paid above the free price is immediately recognized as a kind of tax. Why? Because the “value” of a job is strictly related to the demand for the goods or services a job creates. And what’s called the “market-clearing” price for a good (or the wage for a job) is always a result of how willing people are to exchange a specific sum of their own money for that good, or service, or job. You can pay the cook all you want, but if no one wants twelve-dollar hamburgers—goodbye, cook! If you keep the cook anyway, her cost to the economic unit, above what revenue she generates, will be a tax on the rest of the operation (or the industry, or the nation). After all, if the sale of hamburgers isn’t paying for her keep, something else is, right? That’s why I said feminists are ignorant of the principles of economics, in the same way socialists are. It hasn’t ever worked for them, and it won’t work for feminists, because it can’t work. (in small ways, the Berlin Wall keeps on falling). In the end, the pay-equity idea makes feminists look pretty stupid.

Here’s just a small sample of the kind of political jargon to which such pay-police regimes must resort because their valuations are necessarily subjective and bureaucratic … and I’ve left out the myriad qualifications, exceptions, and caveats the Pay Equity Act in Ontario had to include in order to get around the obvious injustices and stupidities s of this shabby program. It’s hard not to giggle nervously when reading this offensive muddle. The language alone is a riot of confusion – but the Pay Police in Canada are very real. So read on, and weep:

 

On definitions: The Act permits differences in compensation resulting from the use of gender-neutral formal seniority or merit systems, and from gender-neutral red-circling, temporary skills shortages, and temporary training or development assignments (see Section 8(1)). On job salaries: The midpoint and the reference point [of a salary scale] are two different things, which sometimes coincide and sometimes do not. In some salary ranges, the reference point might be two-thirds of the way up the scale, for example. The reference point is the point that employees performing at the levels their jobs require may be expected to reach.

 

At one stroke, the government of Ontario introduced a program which is as complete a model of the socialist process at work in a formerly free country as could ever be invented. As the internationally respected economist Thomas Sowell, who, as a black, has had lots of experience with discrimination, says, “If we buy the key assumption of [pay-equity] – that third-party observers can tell what jobs are ‘really’ worth—then our whole economic system should be scrapped . . . If somebody has this God-like ability, why restrict it to . . . ‘pay-equity’? . . . why not rent equity, tuition equity, vacation equity, and all kinds of other equity?”

Take a look at the Snapshot below to see why all such forced-equity arguments are doomed. It shows that various ethnic groups in Canada have very different earnings. There are hundreds of “ethnic wage gaps.” Some earn only half of what Jews in Canada earn. So using the same fallacious tactics as the feminists, can we argue that this is a result of discrimination by Jews against non-Jews? Either Jews earn more because they work harder and are better at earning good wages than others, or this is racial and religious discrimination against non-Jews by a group that has itself suffered widespread and profound discrimination – and still does!

 

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                                                            Snapshot

 

            Wage & Salary Differences in Canada, by  Selected Ethnic Groups, 2005                 

(Source: www.12.statcan.gc.ca/english/census06/data)

 

                      Ethnic Group                   Average Male Employment Income

Jewish                                               $72,311

Japanese                                            $51,988

English                                              $48,088

Greek                                                 $45,612

French                                               $42,142

Chinese                                              $38,307

West Indian                                       $37,261

N.A. Indian                                        $31,681

Inuit                                                   $29,967

 

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[1] Data from Walter Block, “Economic Intervention, Discrimination, and Unforeseen Consequences,” in Discrimination, Affirmative Action, and Equal Opportunity (Vancouver: The Fraser Institute, 1982), p. 112.

[2] Block, p.50.

[3] See Gilder, Wealth and Poverty, p. 279, note 8; for Canada see  “Earnings of Men and Women,” in Statistics Canada report, 1987.

[4] Morley Gunderson, “Discrimination, Equal Pay, and Equal Opportunities in the Labour Market,” in Work and Pay: The Canadian Labour Market (Ottawa: Ministry of Supply and Services, 1985), p. 238.

[5] Charles Krauthammer, “From Bad to Comparable Worth,” in Regulation (Washington D.C.: American Enterprise Institute, 1984), pp. 32-33.

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