What The Wage Equality Crusaders Don't Understand

Authored by Brittany Hunter via The Mises Institute,

Women in the workforce are constantly bombarded by rhetoric intended to make us feel less appreciated than our male colleagues. Politicians and Hollywood celebrities - many of whom have never worked one day in a traditional office setting - seem to take great pleasure in telling females that we are victims of the alleged gender wage gap.

Asserting that today’s working women make only 78 cents for every dollar earned by a man, high profile personalities from comedian Sarah Silverman to former President Barack Obama have perpetuated this myth and used it to further their own agenda: more government control over wages.

Unfortunately for these wage crusaders, when the data is examined more closely what we find is not necessarily a wage gap, but what could more accurately be described as a “preference” gap that exists because of personal choice rather than gender.

True, if we were to add up the salaries of every working man in the country, and then we compared that average to the average of the combined salaries of all working women, there would most certainly be a wage gap present. However, this statistic doesn’t tell the whole story.

The gender wage gap neglects to account for any other contributing factors aside from gender and wage earnings. It does not take into consideration, for example, that each individual, regardless of gender, is driven by a unique set of incentives. Instead, it assumes that wages are the end-all, be-all for every single American worker.

Human behavior is not a predictable science. We can never know for certain what drives another person to make their decisions, but the decisions themselves may tell us what a person values most.

Dedicating her career to understanding the gender wage gap, economist Claudia Goldin discovered that in the early years of career development there was virtually no wage gap between men and women working in the same field. In fact, when she compared male and female colleagues with almost identical resumes and intellect, a wage gap of less than one percent existed between them.

However, as time went on this gap did eventually widen as some of these working women began making the decision to marry and have children. Once these women decided to take on more caregiving responsibilities, flexibility began to outweigh the opportunity to earn higher wages. In other words, their priorities shifted.

Instead of seeking a promotion, which often means more responsibility and more time spent in the office, many females with caretaking responsibilities have instead chosen to accept lower pay in exchange for the benefit of spending more time outside the office.

A woman’s decision to accept lower wages in exchange for added flexibility does not mean her employer has assigned less value to her work due to her gender. Instead, it shows that for many female employees, flexibility is worth more than having a higher salary and more office responsibilities. It is a manifestation of choice and human action.

When the 2014 Sony leaks revealed that Hollywood actress Jennifer Lawrence had made less money than her male costars in the film American Hustle, Hollywood was outraged and demanded that government help bridge the gender wage gap.

Actress Robin Wright took a different approach to this issue by taking matters into her own hands. When it came time to negotiate her salary for the next season of House of Cards, Wright went into her contract meeting prepared to demonstrate her worth. Armed with data showing her character’s rising popularity among viewers, she demanded to be paid as much as her male costar, Kevin Spacey. Once she presented her case, her demands were met and she was compensated accordingly.

For Wright, putting up a fight was well worth potentially dragging out the negotiations process if it meant receiving higher wages. However, not all actresses value higher earnings over the burdensome struggle of salary negotiations.

When asked how she felt about being paid less than her male costars, Lawrence admitted that the pay discrepancy was largely a result of her own unwillingness to negotiate a higher salary. Already making millions from two successful film franchises, Lawrence had no desire to drag out negotiations when she didn’t really need or want the extra money. In short, she valued convenience over higher earnings and chose to end the negotiation process early.

The gender wage gap theory relies on a statistic that attempts to draw a very narrow conclusion from a very broad set of data. As individuals, we are each fueled by unique value systems which help us make thousands of decisions on a daily basis. To reduce each individual decision down to a person’s gender is not only insulting, it also completely neglects the importance of human action.



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