≡ Menu

An Hypothesis Easily Tested, Daily

Here’s a letter to the Washington Times:

So the Obama administration removed from the Department of Labor’s website that agency’s study that found differences between women’s and men’s pay as resulting, not from discrimination, but from different career choices made by each sex (“Gender pay gap reflects choices, not bias,” August 21).  Big deal.  Politically opportunistic fact-filtering is a bi-partisan tradition as newsworthy as mosquitoes in summer.

But to those persons who believe that women are indeed consistently underpaid, boy do I have a deal for you!  Start your own firms and hire only women.  If it’s true that women are consistently underpaid, you’ll be able to hire outstanding employees by paying them more than the relative pittances they currently earn, while you still profit handsomely from employing them.

And that’s not all.  Being benighted male chauvinists, your competitors will not follow your example; they will stubbornly refuse to offer female employees wages commensurate with these women’s productivity.  You’ll expand your operations by easily hiring highly productive, formerly underpaid workers while your competitors – made stupid by prejudice – will shrivel into bankruptcy as they lose productive employee after productive employee.  You’ll simultaneously corner your industry’s market, earn handsome profits, and raise women’s wages.  If you’re correct that sex discrimination is rampant in today’s labor market, you can’t lose!  So get to work!

Donald J. Boudreaux

UPDATE: See this essay by Catherine Hakim in Econ Journal Watch (HT my colleague Dan Klein)