Quotation of the Day…

by Don Boudreaux on April 8, 2014

in Hubris and humility, Myths and Fallacies, Other People's Money, Work

… is from Mark Perry’s and Andrew Biggs’s essay – “The ’77 Cents on the Dollar’ Myth About Women’s Pay” – in today’s Wall Street Journal; today, by the way, is so-called “Equal Pay Day”:

These gender-disparity claims are also economically illogical. If women were paid 77 cents on the dollar, a profit-oriented firm could dramatically cut labor costs by replacing male employees with females. Progressives assume that businesses nickel-and-dime suppliers, customers, consultants, anyone with whom they come into contact—yet ignore a great opportunity to reduce wages costs by 23%. They don’t ignore the opportunity because it doesn’t exist. Women are not in fact paid 77 cents on the dollar for doing the same work as men.

Far too many policy proposals are premised on the absurd notion that privately available profit opportunities exist but remain unnoticed by all but professors, politicians, pundits, and preachers – officious observers who never offer to stake their own funds and efforts on seizing these opportunities.  Seizing with their own private initiative these opportunities (if these opportunities are real) would not only yield well-deserved profits to the these professors, politicians, pundits, and preachers, but it would also solve the very problems that they assert are so awful.  But instead, these officious know-it-alls cower in their punditry and preaching; they restrict their own actions to instructing the government on how to force other people to spend money and to act.

This reality describes those who insist that women are consistently underpaid – and it describes also economists who insist that minimum-wage legislation is justified by alleged monopsony power in the market for low-skilled workers.

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