Tuesday, 21 January 2014

Economics 101 - Women's pay

In a perfectly fair employment world, remuneration will be linked directly to the contribution the employee makes to the firm. Using strictly objective criteria, devoid of what economists term 'taste discrimination', this can be quantified by an equation that rates education, experience and a third factor which for brevity we can call 'employability'. A man and a woman the same age with exactly the same 2:1 from the same university in the same year and whose 'employability' is exactly equal who are working for the same firm in the same job would therefore be remunerated equally just as long as they both have equal experience in the workplace.

If women, on average, spend less time in work than their male counterparts, a perfectly equal system will reward them less. Women taking time off for maternity will therefore be rewarded less on average and across the board. The facts bear this out; of the 18% gap in earnings, around 4% has been attributed to 'taste discrimination', but the balance is due to women having lower aggregate experience. 

If you think this is unfair, there are two ways to deal with it. Either you can force firms to pay less efficient staff the same as more efficient staff - grossly unfair - or encourage fathers to take childcare responsibility and take time out of the workplace as women do. The latter is the option we've chosen. It's fair, it keeps objective reward systems intact, and the aggregate time lost to business remains broadly the same. Sure, it will take time to erode that gender pay difference, but we can monitor it.

Of course it assumes that man and women who have children come in working couples - something deeply unattractive to some gobby interest groups. And if working couples decide that it's the woman who takes a few years off and the man who continues in work, we must respect that also; just as long as the opportunity is there for it to be the other way around is enough to ensure we have a fair and equal system.  

13 comments:

Anonymous said...


"Of course it assumes that man and women who have children come in working couples"

A more important 'of course' is the one where we have to admit that we are competing with the Chinese where no such luxuries are afforded, the Koreans where suicide in the workplace is such that it is (allegedly) forbidden in the contract of employment. AND, in these places, it is the case that employing humans is considered such an onerous obligation, that they are replacing humans with much more biddable robots.

Meanwhile, in the decadent West, we are whinging about equality between men and women, who work in the largely tax extorted public service - that is, those people who do not produce anything of merit.

Anonymous said...

And surely the myth that women can have it all needs to be exposed for the bullshit that it is...

Choices have consequences - but that also includes inviting the third world here to outbreed us while we pay for it on benefits...

Anonymous said...

And surely the myth that women can have it all needs to be exposed for the bullshit that it is...

Choices have consequences - but that also includes inviting the third world here to outbreed us while we pay for it on benefits...

G. Tingey said...

Unfortunately, that isn't the way it works.
Actually, what happens, a lot of the time is that women, in spite of excellent qualifications & no children, still get lower pay,&/or less promotion than men, who are often inferior at the work in hand, especially in "the City".
Guess how I know this?

cuffleyburgers said...

@ G. Tingey... no I don't know... can it be because you are a girly?

AndrewWS said...

And, of course, a woman with a high-earning husband/partner will always be able to undercut a single or married man when going for a job, and get it.

Budgie said...

In the real world, away from the gender equality and meritocracy theorists, promotion and hence pay is dependent on making your boss laugh.

Too chippy to do that? The solution is to find another job where your value is appreciated, unless of course you have an inflated idea of your own worth. In that case the best alternative is to whinge - the louder the better. All is given to she who whinges.

Ed P said...

Then there's pre & post menopausal conditions to consider (which obviously affect only one sex). A study of male/female sickness & days off will show this is a real factor.

Raedwald said...

Greg - It's down to the compound 'Employability' thing; women who can drink 16 pints, laugh uproariously in a pole dancing club and pay a non-disputed equal share for the end of night Ruby Murray, and drag themselves in the following morning without reminding the boss what he was wearing on his head at 2am, often enjoy quite satisfactory promotion in the City ...

Matt said...

In my opinion, "education" shouldn't come into it at all (aside from perhaps being a selection criterion in the application process). What matters is whether somebody can do the job or not - and even better if they can think laterally and develop improved methods of doing that job.

Formal education may often have some correlation with these skills but this certainly isn't always the case. Even in many cases where there is correlation, it is often due to the individual's aptitude rather than the education process (a clever person is both more likely to "survive" formal education and to excel at a job, both being down to a third factor, i.e. their intelligence/adaptability).

"Educated" people can, in fact, often be a burden - expecting to become instant managers on high pay whilst unable to recognise their own lack of workplace skills. From experience, these people are often responsible for large-scale expensive mistakes and disruption of staff morale.

Even in fields such as engineering most tasks require little more formal education than basic arithmetic (combined with lots of experience and work-derived knowledge of how to apply that arithmetic to the problem in hand). True there are occasions where things such as advanced calculus come into it but they are relatively rare and could be handled by a small subset of the staff.

G. Tingey said...

cuffley
NICE TRY - made me smile.
Hint - I have a very impressive beard.

Raedwald
Yes, that's the problem all right....
Actually, my wife, whom I'm referring to, can hold her beer very well (We both have to, to be able to do beer-festival finance - which reminds me - Battersea BF first week of February)
But when "the firm" gets men in, who are obviously not as good at it as at least two women deliberately being passed-over, then something has gorn worng, & we all know it.
Now, at age 52, does she move (again) or carry on for the time being, hoping that something will break (Which I think likely) ??

Anonymous said...

God forbid that we should leave the whole situation up to those that actually pay the wages eh?

Bill Quango MP said...

In retail there is no gender issue. Not that I have ever been aware if.
In ladies fashion 90% of the managers are women.
In men's or unisex fashion about 45% of the mangers are women.

You can see this yourself just by looking at managers badges in shops.

As they rise up the ranks the numbers of women reduce. Until at board level even a company such as Ann Summers has more male than female members.

I fully believe its because of maternity.
Most women drop out of work. They are unable to come back effectively for 10 to 15 years. Then they are well behind.

In my old role as regional manager a survey I asked for showed that only 1 in 10 female managers returned to work at he same level as thy left to go on maternity.

Long hours, weekends and relatively poor pay meant they could not afford or were unwilling to return.

The reason I asked for the stats in the irst place was our own HR bleating about lack of women in senior positions.

In retail at least , Radders is completely correct.