On Monday, President Obama urged Congress to pass the Paycheck Fairness Act,a bill aimed "to increase protections for women filing gender-discrimination lawsuits, as well as create a federal grant program to improve women's salary negotiating skills.” The bill was defeated 52-47 in the Senate on Wednesday, and President Obama accused Senate Republicans of “putting partisan politics ahead of women and their families” by voting against it.
Like a lot of legislation, the bill was proposed with good intentions. But a closer look at the underlying premise behind this type of legislation - that there is a “gender pay gap” between men and women and widespread discrimination against women in the workplace - shows that the issue is much more complex than the President would suggest.
For example, it is often claimed that women earn only 70-80 percent of what men earn. Taken out of their proper context, it would appear that women are being underpaid and taken advantage of in the marketplace.
But it is a bit more complex. First of all, basic economics will tell you that if this were true, men would be completely out of work tomorrow. If capitalists and business owners are the greedy, profit-hungry caricatures that the Left makes them out to be, they would only hire women at the lower wage rate.
A more detailed look reveals that there are many economic and non-discriminatory factors that explain these statistics. Marriage and childbirth play a huge role. In general, women are more likely to drop out of the work force for a period of time to raise children while men aren’t. Women lose years of training and experience, and tend to go back into the workforce seeking jobs that fit their schedules as opposed to a higher wage. I’m not saying that this is the way it should be, but it is reality.
What is most interesting are the comparisons of incomes between men and women who either haven’t had children yet or have chosen not to. Single, childless women between 22 and 30 actually earn 8 percent more than their male counterparts. Women who have never had a child, regardless of age, earn 113 percent of what men earn. Unmarried college-educated males between the ages of 40 and 64 earn nearly 15 percent less than their female counterparts.
Additionally, men are more likely to take more dangerous and hazardous jobs, longer hours, commute long distances to work, but are also much more likely to becomes homeless, incarcerated, sacrifice their prime years in the military, or lose their employment in bad economic times.
Women obviously face a certain amount of unfair and undeserved discrimination by employers and fellow employees, but by far the biggest factors in determining how men and women are paid are a result of individual choices and differing time preferences. But as Carrie Lukas argues in Forbes, “Women are increasingly taking on leadership roles in businesses around the world. Technology is increasingly creating more flexible work arrangements, creating new options for parents to combine work and family life. Women are excelling academically (earning far more college degrees than men).”
Beyond the rhetoric and casually thrown-around statistics aimed at appealing to our emotions and our natural sense of justice, basic principles of economics disprove the supposed “gender pay gap.” The statistics, whichever way you look at them, are largely the result of the market coordination of the subjective values of men and women, offering a diversity of options and choices.
Federal intervention, in the form of the Paycheck Fairness Act, is a solution without a problem, and a cynic might even see it as just one more excuse to expand the power and control of the federal government. Besides, if President Obama is truly concerned about a “gender pay gap,” he should start by looking in his own White House.