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Thursday, 26 June 2008

Until men have babies, this pay gap will remain (reprise)

I'm just going to take a break from Straw for a minute to repost something I wrote some time ago. Harman announced today she is going to clamp down on the pay difference between men and women. Sigh. Right, here it is:

Discrimination is not an evil. We discriminate in favour of the most capable candidate when we appoint people to jobs. We discriminate in favour of tractors over racing cars when we choose a vehicle to pull a plough. All this is 'good' discrimination and is not only entirely legal, it is essential for economic efficiency.

Point two. Employment discrimination on grounds other than for economic efficiency is termed 'taste discrimination' and is a bad thing and largely illegal. Taste discrimination includes discrimination on grounds of race, sex or religion (the last is important in Northern Ireland).

Point three. The aim of the firm is to maximise profit. Firms other than micro 'mom and pop' enterprises very rarely practice taste discrimination. Very often the opposite is true; Grunwick Film labs deliberately employed Asian women over white working class men because they would work for less, and the firm earned itself the bitter hatred of the Union movement. Taste discrimination is more likely to be found in public sector organisations than in private sector ones.

Point four. Employment, promotion and reward decisions that are made in the furtherance of economic efficiency are made on the grounds of an employee's qualifications, experience and an 'employability factor' (are they acquainted with a toothbrush and an iron, and refrain from swearing at customers).

Point five. It's been ten years since I did my Masters, and the pay gap then, when I studied this subject, was 18%, and it's hardly moved. There was a substantial body of economic research into this pay gap, all of which found that the pay gap attributable to taste discrimination was somewhere in the region of 3% to 5% - meaning that 13% - 15% of the pay gap was attributable to other factors. The reason for this larger difference is essentially simple; men and women of the same age with exactly the same qualifications and 'employability' often differ substantially in the third factor, experience. The proximate reason why women have less cumulative experience than men is because they spend significant periods out of the workplace when having babies. And that's it.

Take two 30 year olds, John and Janet, working for the same firm. They started on the same day, with exactly the same degree from the same university, and both are equally bright, personable and compliant. John has 9 years of experience since joining the firm, but Janet only has 6, having had two children and having taken advantage of the firm's enlightened and progressive 'career break' scheme. John earns a fifth more than Janet because his additional experience makes him more efficient.

It angers me when twunts such as Judy Mallaber, the Labour MP who led the enquiry, suggest that the 18% gap is all due to capitalist private enterprise exercising taste discrimination against women. It's untrue. It's a lie. And what's more it's deadly dangerous.

If the firm is forced by law to ignore Janet's years out of the workplace having babies and is forced to pay her the same as John, the firm becomes less efficient, and therefore less competitive, and the economy as a whole is the loser. Twunts.

Tim Worstall has posted a rather better developed piece on this on the Guardian's CIF. And drawn the usual loony rantings.


Anonymous said...

In a logical world, what you have posted would be common knowledge, and no-one would argue.

But instead we live in a Socialist world. And part of their script is that they must destroy the Capitalist economy. Alas for them, its been remarkably resilient so far, so the desperate measures are coming out now. Surely after three terms in office, they can't go down as the Socialist regime that failed to wreck the economy, can they? Think of the ignominy of it!

Anonymous said...

The Communist model is to destroy free enterprise and liberty for a society of a ruling elite. It can only do this by removing the consciousness of the population.

It harnesses the white female's resentment of the white male and has expressed itself into multiculturalism (everything non-white) and sexual perversion (everything non straight and encourages the infantile expression of sex), destroying family values and merit in employment.