Leftist activists and economists like to blow dust about a lot of social issues by attributing them to the free market. Among them is of course the discrimination of women in pay. Their outcry against businesses calls for government control of these social occurrences in order to eliminate the pay gap and provide gender equality. The reason why leftists have miserably failed in their task so far is because they don’t understand correctly the causes of these effects, and even worse, because they go on to blame the wrong things all while calling for an Orwellian set of laws that are simply terrible.
Do women get paid less because of sexism? While it is true that some men are despicable pigs that don’t want to give women and men the same pay, the reason why most women are discriminated in the payroll is a purely economic one. Now why is that? Is it because women are inherently inferior to men in the work they do? Absolutely not. Even though women can be inferior to men in some areas, they can be much better in other areas, and are. These areas include even those jobs that have been traditionally done by men such as plumbing, business management, or army. The issue of job performance is not a class issue between men and women. As with everything else, it’s an individual issue. Some men are better at some things, some women are better at other things.
What is the explanation then? In economics, there exists a very important concept called the marginal product of labor (MPL). It can be defined as the marginal (additional) revenue earned by the firm as a result of employing a marginal factor of labor. In other words, the increase in the firm profits that comes as a result of employing an additional employee. This is one of the most important concepts in labor economics because it explains a lot of job-related issues, including this issue in discussion. MPL decides what employers pay their employees. The competition between different employers assures that employees are paid very close to their MPL and that there is no space for “exploitation,” as Karl Marx misinformed us (see my previous article on this). In the same way, while some employers may want to pay women less because of their sexist beliefs, the average employer simply pays women their MPL.
Women have a lower marginal product of labor. This is, again, not because they are not as good as men, but because of another very important social role that they play in society. They are mothers. The society has developed in such a manner so as to have women carry the burden of raising children and taking care of the house, a sacrifice that men rarely take. In assuming this difficult role, women’s time and energy to perform other jobs naturally declines. The already onerous task of catering to the newborn and raising them in the manner that mothers feel is best consumes a lot of their ability to devote themselves to other tasks. That is why women who are mothers usually take part-time jobs. Those women that take full-time jobs are unable to accomplish jobs in the manner which they would if they had not had children. This social phenomenon is clearly distinguished in statistical data. When comparing pay between men and women, the stark difference only occurs with mothers and not with non-mothers (so to speak) who are paid very similarly with men. Thus, it’s the patriarchal system that we live in today that overloads mothers with so much responsibilities that it undermines their ability to perform other “non-patriarchal” tasks. This is then reflected in their pay roll.
The Free Market Punishes Sexism!
As I explained above, it’s not the free market that’s responsible for the wages of women, so there’s no point to side with socialists and call for cruel regulations. To blame the free market for simply reflecting on women’s MPL is like me being punched in the face for pointing out to a man that he’s missing a tooth. The free market only shows what exists; it doesn’t make the rules or judge people. In fact, it’s an abstract description of our unrestrained, free activities as individuals. And because we don’t live in a purely free market, it makes even less sense to attribute gender pay gap to it.
The free market, however, punishes sexism and other forms of discrimination. This again, is illustrated by the MPL concept. If a black person has an MPL of $200 but is being paid only $150 by his racist boss, then every other firm that wants to employ this black person from $151 up to $199 will earn a profit. Providing that there must be some firms that are not racist, this black person will definitely be employed somewhere better. This way, the racist boss would lose an employee, and regardless whether he cares about blacks or not, this is a loss. The same story applies with women. Those women that are being underpaid will always have opportunities to work somewhere else where they are valued correctly, that is, accordingly with their MPL.
The reason this doesn’t happen as easily in the real world is not because this theory is wrong, but because the bloody government has to interfere in the labor market and distort it. Yes, I’m talking about minimum wage laws. These laws are essentially anti-job laws; they directly and explicitly cause unemployment. Ironically, they hurt the people they are conceived to help most, such as mothers whose MPL is lower. By setting the minimum wage that businesses can pay above the market equilibrium levels, the government forces firms not to employ mothers because it would cost them more than they would benefit. This way, instead of doing a job they voluntarily opted for at a wage their MPL determines, mothers are left to stay at home without financial help and dependent on their husbands. This is not to mention other tons of regulations and interventions that distort the entire economy and reduce the number of jobs not only for mothers but everyone else.
It’s a Matter of Principles
Private property is a crucial principle if the society wants to thrive. It would take treatises to explain why, so you just have to take my word on it. How would you feel if I walked in your home and told you what you can or cannot do there? A reasonable man would ask me to leave, a more practical one would kick me out. The businesses are in the same situation. It’s simply unethical to tell them at what wage they can or cannot hire as long as their practices are purely voluntary. To say that women (or anyone else) have “human rights” at this or that service is completely fallacious. You can have a right to your life, liberty or freedom of speech, but not rights over the services of others. This mistake is often done when speaking of socialist (pardon me, universal) healthcare. The “right” to medical service, they say. My father is a doctor; does it mean he’s enslaved to the needs of others and he is to provide them unconditionally? If we spoke of a seller with a shop in this manner we’d find it absurd, but somehow medical services are “special.” Well nothing is special in this sense, they are all services and the only way they ought to be provided is voluntarily between consenting individuals. The same is with other jobs. Nobody owes you a job, if a business offers you one take it or leave it. You don’t have any property rights over that business and therefore you are not in a position to regulate what offers they can give you. You can only regulate what you own.
Discrimination is not necessarily bad. We discriminate on a daily basis. We make choices, and every choice is a renunciation. We should be free to decide who comes to our house and who doesn’t. We should be free to impose conditions on which they can come. So should businesses. If they want to discriminate, well, their loss. The only reason why the costs of discrimination are hidden is because the government has distorted the labor market in such a manner that there is a lot of unemployment. This means that businesses’ demand for labor is very elastic, which gives them advantage in bargaining. In a libertarian society, there would be sexism and racism, but they would cost dearly.
The Hypocritical “Pro-Women” Laws
There is nothing that I hate more than “anti-discrimination” laws. These laws are the hypocrisy of the world! You usually hear stuff like “..the parliament is working hard to have at least 30% women..” or like “..lower exam points threshold for women..” Don’t you see the underlying problem here? What these people are essentially saying is that women are stupid and that we should cut them some slack! If this isn’t discriminatory, then I don’t know what is. Politicians that make these laws are exactly the kind of people that believe women are incapable of doing things as good as men. It is beyond my understanding why women choose to be part of these kinds of campaigns. If I was told that I would be given lower criteria for acceptance in a job, I would find it offensive as long as it didn’t have a good reason for it. The “30% women in parliament” law does the same thing. It implies that women are incapable of achieving such a status themselves, so they should be pushed by the help of men.
Besides, how do you come to these numbers? They are completely arbitrary. In a normal world, supply and demand for things set prices, levels or standards. How does one come to know that “30%” is the right number? What if women can do better than that? This just goes on to show that these laws are hypocritical and bad, both qualitatively and quantitatively.
I’ve wanted to get these thoughts off my chest for some time. I have sisters, so it pains me to see how women are misled by socialist propaganda concerning discrimination and pay gap. Mothers and sisters, the choice is not regulation and interference, it’s exactly the opposite. Tell the government to stop doing harm to the economy so more firms that value your worth can spring up and use your services for the benefit of society.