For the purposes of this column, let us assume that businesses attempt to maximize their profit. Also for the purpose of this column, let us recount President Obama’s claim that women earn just 77 cents for every dollar earned by men. Along with a nice dose of high-minded outrage, he argues this must be remedied by legislation.
This leaves us asking the obvious question: If corporations could increase their profits significantly by firing men and hiring women, would they not? Even supposing the extreme assertion that corporations exist to reinforce white male privilege, couldn’t we expect IBM, Yahoo, ADM or the host of other companies with female CEOs to have tried this method? The answer is yes, they would.
Worse still, the president willfully misleads on this issue. We must remain thankful he wasn’t talking about health plans. An honest examination of wage gaps isn’t difficult. If we separate people into two groups, by age, education, gender, race, occupation or almost any other factor, their average wages differ in some way. This sort of comparison is the type found in elementary school science projects. While interesting, it doesn’t tell us much.
If we use statistical methods that account for multiple characteristics, wage differences for most factors disappear. Occupation, education, job tenure and experience explain almost all wage differences; gender, almost none.
To say there is a 77 percent wage gap requires one to be either stupid or electioneering (or both). While this deliberate untruth is designed to stem short-run electoral losses, I doubt the effectiveness of this approach because stupid folks are less likely to vote in midterm elections. Still, anything that changes the debate from health care will be welcomed by many facing election this fall. I am worried about the long-run effect on this debate.