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Why women make less than men in the work place

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Gabriel Tobal posted on Sun, Jan 29 2012 7:59 AM

I was listening to Walter Block's lecture on labor economics, but I don't recall him covering why women typically make less money than men do in the work place. can anyone please elaorate why this is?  

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http://www.youtube.com/watch?v=EwogDPh-Sow

 

I saw this thread and I'm like "I can help!" :)

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Damn it Wheylous, that video covered f***ing everything! Way to steal my thunder!

Annnyyway. What I can contribute here is that 

The wage gap in America has been closing over time. This process has slowed since the turn of the century (which is of course a fun way of saying the last decade) which would suggest that we are reaching the point where the career decisions/the current discrimination level meet. This is to say that of course there is some discrimination against women in the workforce, but that in order to break that initial barrier there needs to be innovators who promote themselves and break through the "glass ceiling". If this happens then the fact is that it's going to be broken, but so long as women remain at lower levels then that's not going to go anywhere too fast. On the other hand as public opinion continues to liberalize (a slow process) then wages will start to equalize even without a large push from women because those seeking jobs higher up will seem more employable. This whole state of affairs can be seen in the fact that the higher up on the ladder you go, the fewer women are working there. For instance managerial positions are equal for men and women, but then there's a steep falloff from that point, suggesting that there isn't a huge anti-female conspiracy in business, but rather that fewer women start attempting to grab these jobs, which is an entirely reasonable thing to expect.

It's also important to note that the argument for the individual conservatism of the people as playing a larger part in the matter seems vindicated by statistics involving wage inequality internationally. The relatively conservative and traditional country of Japan has a huge income inequality between men and women, whereas France has a much smaller one, and the United States has a noticeably larger level than France's, but much smaller than Japan's. It is quite likely we will see business policies promoting women in the future, because it would appear that companies which higher women are noticeably successful (which makes sense from any number of points of view).

Source: http://www.economist.com/node/21539928

The market economy gives people what they want. Wage discrimination cannot be maintained in a competitive environment because the potential monetary gain from hiring women is too intense to ignore on the part of business. The capitalist economy will do whatever it can to rush to satisfy the wellbeing of the consumer. In the long run business will fall into line, all points in between where business is the problem in the equalization of income have no chance of lasting. All that matters in the long run are the choices of the individuals in question. It is ultimately the actions of women, in what they do with their lives and how this affects their worth within the market economy that will determine the pay they receive. Women, and all other groups, inevitably have nothing to look at but themselves.

I hope that helps.

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Gabriel Tobal:
I was listening to Walter Block's lecture on labor economics, but I don't recall him covering why women typically make less money than men do in the work place. can anyone please elaorate why this is?

The very notion of a "wage gap" is nonsense, economically. Labor is a factor of production like iron or wheat. Employers bid for labor according to supply and demand. They always want to hire the cheapest labor that can do the job. If any type of labor, say women, was less costly for the same value, then employers would preferably hire women until their wages are bid up to the level of men. That's why a "wage gap" in the fashion the feminists envision it can't actually exist in a market economy. Any employer who wants to discriminate would have to choose to hire more expensive labor at the cost of his bottom line. Even if he was willing to pay the price - and aren't we told that they're too greedy and selfish for that? - he would put himself at a competitive disadvantage and eventually lose out to employers who don't discriminate. The only way discrimination can exist is if the government stifles competition or mandates equal wages, then discrimination is free. Socialism subsidizes discrimination!

But what about statistics that say that women only make x cents for every Dollar men make? Well, partly they're just made up by angry feminists. Secondly, they compare groups that just aren't comparable. Women tend to choose different careers than men. Men like engineering, women like social tasks. Obviously different jobs pay differently. So then let's correct for that, let's compare what they make for "the same job". Doesn't work either, because men tend to work longer hours. Then let's correct for that too! Nope, there are differences in age, experience and training. Let's correct for that too... whoops, our wage gap is gone. In fact, women are already ahead of men in a lot of prestigious fields once you correct for a few legitimate differences. For example in college. But it's not like feminists care about that kind of inequality. It's only a problem when it's the other way around. Feminists don't care about equality, that's just an argument to get more state-enforced special privileges for their class.

"They all look upon progressing material improvement as upon a self-acting process." - Ludwig von Mises
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John James:

Albeaver89:
Didn't he say there still is an average of .03 dollars in difference between men and women, given the same back ground and relative skill? Why whould this be?

Because there are more factors than just skill and background, of course.

 

Because there is more to "compensation" than money and fringe benefits like dental. There are many other factors that are taken into consideration when a human acts. Perhaps the workplace is closer to home than the place that pays more; maybe the her child's school is nearby; maybe the weather is better; maybe company's picnics are better; maybe she doesn't want to leave her coworkers; maybe some other factor.

To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process.
Rabbi Lapin: "Let's make bricks!"
Stephan Kinsella: "Say you and I both want to make a German chocolate cake."

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How long have you been studying?  You're doing fine.

About 8 months and so far I know very little.

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Wheylous:
About 8 months and so far I know very little.

Bologna.  You said "just so that you can defend yourself".  I'm pretty sure you could destroy the vast majority of philosophical opponants you'd come across.  It doesn't take much.

 

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Until I find some second year econ student that pulls out some weird regression of something or other.

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That's when you just have to be familiar with these.

And besides...how many of those shmucks are there?  For every one of those there's a thousand other people who know virtually nothing, that you could be much more easily educating and converting.

(see "Argumentation & spreading the word" here.)

wink

 

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You have no idea how many people on Reddit call me a creationist and claim that you can control enough variables to make economic sense. They point out that you can't control for tectonic plate movements and movement of the stars, yet you can get valid scientific results, so why not in econ. Maybe I should just redirect them here to have you deal with them instead.

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Wheylous:
They point out that you can't control for tectonic plate movements and movement of the stars, yet you can get valid scientific results, so why not in econ.

Well that's easy: because humans act.  Tectonic plates and stars do not.  Blam.

Mises's Non-Trivial Insight

 

Maybe I should just redirect them here to have you deal with them instead.

Sure.  I doubt they'll come, but if they're willing to actually engage, it might be fun.  But just remember my points about Argumentation & spreading the word.  (also summarized here)

 

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Sowell is such a badass.

 

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Richard Ayoade should play Sowell in Sowell's biopic.

 

 

To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process.
Rabbi Lapin: "Let's make bricks!"
Stephan Kinsella: "Say you and I both want to make a German chocolate cake."

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To my knowledge, the best explanation is probably from Satoshi Kanazawa :

 

In a recent study, Budig and England (2001) find that mothers earn less than non-mothers with similar characteristics. The negative effect of motherhood on wage is greater for married mothers than for unmarried mothers. Their finding is in stark contrast to Lundberg and Rose’s (2000) discovery that fathers earn more than non-fathers with similar characteristics. In other words, there appears to be a wage penalty for motherhood and a wage reward for fatherhood.
 
Both Budig and England (2001) and Lundberg and Rose (2000) use a statistical technique called the fixed-effect model. By using two data points for each individual, before and after parenthood, the fixed-effect model controls for all unobserved heterogeneity, and allows these authors to rule out the possibility of selection bias. In other words, Budig and England (2001) demonstrate that it is not because women with lower earning capacities are more likely to become mothers that mothers earn less than non-mothers, and Lundberg and Rose (2000) demonstrate that it is not because men with higher earning capacities are more likely to become fathers that fathers earn more than non-fathers. It is motherhood itself that reduces wages, and it is fatherhood itself that increases them.
 
Further, Lundberg and Rose (2002) find, once again using the fixed-effect model, that such ‘wage reward’ for fatherhood is greater if the mean have boys than if they have girls. Men earn more, and work longer hours, in response to the birth of sons than to that of daughters. What accounts for these peculiar patterns? What explains the puzzling fact that motherhood carries a wage penalty but fatherhood carries a wage reward, and that such wage reward for fatherhood is greater if the men have sons than if they have daughters?
 
4. The meaning of life from the evolutionary psychological perspective
 
Throughout evolutionary history, offspring of men of higher social status and greater political power have had much better chance of survival to sexual maturity, because their fathers could use their status and power to protect them (Betzig, 1986). Women therefore competed to mate with men of higher status and power, and men competed to attain status and power to attract women. Throughout evolutionary history, status and power were men’s means of reproductive success, the ultimate goal of all biological organisms, whereas physically taking care of their children was women’s. In the current environment of capitalist market economy, however, both men’s quest for status and their investment in their offspring often involve material resources (such as money) because status and power often correlate positively with resources. I suggest that this is why men earn more and work longer hours when they become fathers, so that they can invest more in their children and attain greater reproductive success. By the same token, women earn less when they become mothers because accumulating material resources was not their means to reproductive success and women cannot physically take care of the children and earn as much as they did before motherhood, given their time and energy constraints. This is probably why Budig and England’s (2001) analysis shows that married mothers earn less than unmarried mothers. Unlike unmarried mothers, married mothers can depend on their husbands to earn the material resources to invest in their children.
 
Recall that evolved psychological mechanisms mostly operate beneath and behind conscious thinking. I am not necessarily arguing that this is how men and women think consciously. Whether they are consciously aware of the evolutionary logic behind their desires and preferences is immaterial to EP [Evolutionary Psychology]. I am arguing that men feel like working longer hours and earning more money after they become fathers, and women feel like spending more time taking care of their children. They are not necessarily privy to the evolutionary logic behind their desires and preferences. All the ‘thinking’ has already been done by evolution, so to speak, and it simply ‘equips’ humans with certain desires and preferences. Men and women simply do what they feel like doing or want to do.
 
[...] Sons’ expected reproductive success depends largely on parents’ wealth, so that sons from wealthy families are expected to attain much greater reproductive success than sons from poor families. This is because sons from wealthy families typically inherit the wealth from their fathers, and can in turn invest the resources in their offspring. Women prefer men with greater resources, and thus wealthy men throughout human evolutionary history have been able to attract a large number of high-quality mates (Betzig, 1986). [...]
 
I suggest that this is why sons produce a greater reward for fatherhood than do daughters. Fathers with sons can increase their reproductive success if they accumulate more resources because they can then pass them on to their sons so that they can attract more mates. Fathers with daughters cannot similarly increase their reproductive success because their daughters’ (and thus their own) reproductive success hinges on factors largely independent of wealth (youth and physical attractiveness). The Trivers-Willard effect also explains why couples with sons are less likely to divorce than couples with only daughters (Morgan, Lye and Condran, 1988; Katzev, Warner and Acock, 1994). Fathers’ parental investment is far more important for sons’ future reproductive success than daughters’. Once again, all of this happens largely unconsciously. Fathers fell like working longer hours and making more money, or staying longer in marriage, when they have a son than when they have a daughter, but they usually don’t know why.
 
5. What makes us happy ?
 
If this biological view of humans is correct, then attaining reproductive success should increase our subjective happiness. Throughout evolutionary history, finding a mate has always been a significant adaptive problem for our ancestors (Buss, 1994), and many men, in particular, ended their lives without finding any mate. Once our ancestors found a mate and ‘got married’ (by forming a long-term pair-bond), however, reproductive success (having children) followed as a necessary and immediate consequence of regular mating. In the absence of reliable means of contraception, regular copulation and reproduction in the ancestral environment were essentially the same thing (Kanazawa, 2003), except for the few who were biologically infertile, but we are not descended from them and thus have not inherited their psychological mechanisms.
 
Evolutionary psychological logic thus predicts that both men and women should be much happier if they are married than if they are not, because marriage (finding and keeping a regular mate) signifies the solution of the most difficult obstacle toward reproductive success. Further, the same logic would predict that, because high social status is an effective means to men’s reproductive success, the accumulation of material resources, which highly correlates with and predicts men’s social status in the capitalist market economy, should increase men’s happiness. In contrast, since social status is not an effective means to women’s reproductive success, the accumulation of material resources should not increase women’s happiness. Men should be far more single-minded in their pursuit of material resources than women are (Browne, 2002). Of course, income and economic welfare are prerequisite for health, which is crucial for motherhood and the subsequent health of the baby. However, in advanced societies like the contemporary United States, from which my data come, virtually everyone, even the poorest person, meets the minimum requirement for physical health and welfare. Very few Americans today have health problems because they are too poor.
 
Table 1 presents an analysis of data from the General Social Survey (1972-98). I present the empirical data here only for illustrative purposes, not as a rigorous empirical test of competing hypotheses. Because the dependent variable measuring happiness is ordinal (1 = ‘not too happy’, 2 = ‘pretty happy’, 3 = ‘very happy’), I use ordinal regression (McCullagh, 1980). The results in Table 1 show that, controlling for age, race (black = 1), education and survey year, being currently married significantly (ps < 0.001) increases both men’s and women’s happiness. This finding is consistent with earlier reports of the strong positive effect of marriage on happiness (Waite and Lehrer, 2003). The interaction between being currently married and having children is also significant for both men (p < 0.01) and women (p < 0.001), suggesting that being married with children significantly increases the respondent’s happiness.
 
In addition, the respondent’s income (measured in 12 ordinal categories) significantly (p < 0.001) increases men’s happiness, but it has no effect on women’s happiness. Both of these patterns are consistent with the evolutionary psychological predictions. Incidentally, the strongly significantly (p < 0.001) negative effect of survey year on women’s happiness demonstrates that women have gradually become less and less happy in the United States over the last quarter-century, when men’s happiness has marginally significantly (p < 0.10) increased over the same period.
 
 
There is one anomaly in the ordinal regression results presented in Table 1, however. While, consistent with my evolutionary psychological prediction, both being currently married (the main term) and being married with children (the interaction term) have significantly positive effects on happiness, for both men and women, the main term for parenthood has an equally significantly negative effect for both men and women (ps < 0.001). The negative coefficient for the main term for parenthood is highly larger than the positive coefficient for the interaction term for both men and women, suggesting that, whether they are married or not, having children actually reduces the respondents’ absolute levels of happiness. How could this be? If, as I argue, the ultimate goal of all biological organisms is reproductive success, and if emotions are designed to induce organisms to engage in behaviour that helps them achieve this goal, how can individuals with children be less happy than their childless counterparts?
 
I believe that this anomalous finding may point to the potential limits of EP as an explanation of human behaviour in the current environment. As I note above (in section 2), all evolved psychological mechanisms are adapted to (and thus assume that we still live in) the EEA (Kanazawa, 2002, 2004). To the extent that our current environment is different from the EEA, our evolved psychological mechanisms often malfunction and misfire.
 
Parents today must raide their children in a radically different environment from the EEA [Environment of Evolutionary Adaptadness]. They must drive them to and from daycare centres and soccer practices, they must put them through compulsory school and pay for their higher education, they must feed, clothe and shelter them in their adolescence and early adulthood (when they would have been economically independent in the EEA soon after puberty), they must purchase computers, cars and other expensive gadgets for them, etc. The list is endless. I suspect that having to raise children in an evolutionarily novel environment might suspend the operation of evolved psychological mechanisms (and the preferences, desires and emotions they engender) and allow other mechanisms to kick in and influence their happiness. Economic and sociological theories are indispensable in explaining these other mechanisms that might overtake and supersede evolved psychological mechanisms in the current environment.
 
For instance, Becker (1991, pp. 135-78) presents a microeconomic model of the demand for children which not only provides alternative explanations for phenomena that EP can also explain, such as why mothers spend more time and effort taking care of their children than fathers do (see above), but can also explain phenomena for which, to my knowledge, EP has not been able to provide satisfactory explanations, such as why rural fertility is typically higher than urban fertility or why there has been a steady decline in fertility throughout the world in the last couple of centuries. (In fact, what the demographers call the ‘demographic transition’ and the current apparent equilibrium on the two-child family are two of the mysteries to EP.) Becker’s microeconomic model can offer satisfactory explanations to these phenomena from a rational-choice, cost-benefit perspective, with only four independent variables: price, income, demand and supply.
 
Given all of this, and in the current state of development of EP, it is difficult to refute Becker’s contention that ‘To be sure, the Darwinian theory is highly relevant to nonhuman species and, modified to include cultural selection, may also be relevant to some primitive human societies … However, the analysis developed here is far more suited to explaining fertility changes in Western countries during the last few centuries and in developing countries during this century’ (Becker, 1991, p. 137). What Becker is unwittingly yet very presciently pointing to may be the distinction between the EEA and the current environment.
 
Of course, Becker himself is an unabashed reductionist like me, and thus socioeconomists who are critical of reductionism may have other objections to or concerns with my call to subsume social sciences under evolutionary biology and psychology. In particular, such critics may point to the inherent difficulty in figuring out precisely what the EEA was like, tens and hundreds of thousands of years before the present, and what its implications are for human behaviour today.
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Daniel Muffinburg:

Richard Ayoade should play Sowell in Sowell's biopic.

 

 

 

Lol, should I get started on the screenplay now or is someone else knocking it out already ;) Sowell is the shit.

 
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And who's going to be the voice actor?  Ayoade speaks with a high-pitched, whiny, British accent.

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