The economic principles that must be considered in order to answer
this question involve supply and demand and a consideration of each
gender's competitive marginal revenue product in a particular job.
If one gender has a particular skill that is more in demand for a
particular job, then they can justifiably be paid more than the other
on an economic basis. For example, if someone needs to hire a
surrogate in order to have a child, a woman is in a position to
command a significant price for performing such a service relative to
a man, for whom demand is zero because he has no value in that
capacity, who would be paid nothing as a result.
If one gender has a higher competitive marginal revenue product in a
particular job than the other, the gender with the highest competitive
marginal revenue product is more economically productive. Therefore,
that gender can be paid at a higher rate without adversely affecting
the employer's profits. As an example, suppose the job consists of
manually carrying heavy objects from one location to another. If we
assume that on average men are stronger and can move more weight per
unit time than women, then they could be justifiably paid more per
hour because they are creating more economic gain for their employer.
On an economic basis, women and men should be paid the same for a
particular job only if their economic value to their employer is
identical. If there is any gender-based reason why a man or a woman
creates a different degree of economic benefit in a particular job,
there will be greater demand for that particular gender. That greater
demand will lead to a corresponding rise in wages until the supply of
that gender for that role reaches an equilibrium with demand. In the
event that the cost of hiring the preferred gender exceeds the
economic benefit available from doing so, then more of the other
gender will be hired and that gender's wages will increase until an
equilibrium is reached. However, the overall equilibrium will still
reflect a difference in wages based on economic productivity so that
the marginal benefit divided by the cost of that marginal benefit to
an employer for both genders is equivalent.
In the United States, "Studies indicate that from one-half to
three-quarters of the male-female wage gap can be explained by
differences in education and job experience. This leaves from
one-quarter to one-half to be explained by discrimination and other
non-measured sources," (Page 243). To the extent that women have
traditionally received less education and have greater responsibility
for child-rearing and household responsibilities that tend to
interrupt their careers, a wage gap is economically justified.
However, discrimination is not justified economically and can have
economically adverse effects. For example, when social customs
discouraged women from pursuing careers in science and medicine,
society lost the opportunity for many brilliant minds to contribute
dramatically to the common good. Such discrimination is economically
irrational.
In summation, from a purely economic perspective, any time a
difference in productivity exists that is gender-based in a particular
job, a difference in wages is economically rational and should be
expected. In the absence of a gender-based difference in economic
output, however, wages should be the same. Discrimination that is not
based on economic principles is not economically rational and, as a
result, should be eradicated. As this has been recognized, the
government has taken many steps to combat discrimination, although a
problem and corresponding economic inefficiency still remains.
Sincerely,
Wonko
The page reference refers to "Economics" 14th edition by Samuelsson &
Nordhaus, McGraw-Hill Inc., 1992 |
