If you want to think like an economist, you have to look more than just the surface. The truth is that the gender pay gap is largely a myth. Despite this, there isnt really a reason that women should be paid the same as men for equal work. The reason for this is that compensation doesnt just tie into an employees current value for the company, but also to their long term value. If a company hires a male and a female in their mid-twenties, the odds are that the female will take at least several months of maternity leave throughout her career, maybe leaving the company for a year or more due to pregnancy and maternity leave. In fact, there is even a chance that the female employee will take her paid maternity leave and then not return to her job at the company. Women certainly have the right and the choice to have children and to leave the workforce to raise them, but these are choices and are not forced. Companies that choose to pay men and women equally will be rewarded by conscious consumers. Those who have records of grossly unequal pay will be punished by conscious consumers. Mandating equal pay will only create unintended negative consequences. An employer who is forced to pay women and men equally will react by hiring fewer young women who have a higher likelihood of leaving the company due to childbearing than do men or older women. This will lead to greater long term unemployment for female workers down the road. This is similar to how increases in the minimum wage lead to greater youth unemployment, (especially among minorities) a problem which creates much larger issues as those negatively affected by these mandates get older. To think like an economist, you have to not only look at the immediate intended effects of a policy proposal, but also the long term effects of the policy on all groups involved, whether they are the intended targets of the proposal or the unintended.
Posted on: Wed, 09 Apr 2014 01:07:43 +0000
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