Men are from Mars, Women are from Binders

October 19, 2012

The hilarity surrounding Mitt Romney’s now famous “binders full of women” comment aside, the exchange in the US presidential debate this week held some hard truths for women who believe that one day they will earn the same income as their male counterparts.

I doubt that anyone could have predicted that the most talked about issue coming out of the US Presidential debate last week would be the gender wage gap, but what was even more surprising was that the most honest answer to the question about inequalities of women in the workforce (specifically, why it is that despite enormous progress in other areas women still only earn 72 cents on every man’s dollar) came from Romney himself.

Lets consider what he said:

“You’re going to have women in the workforce that sometimes you need to be more flexible. My chief of staff, for instance, had two kids that were still in school. She said, I can’t be here until 7 or 8 o’clock at night. I need to be able to get home at 5 o’clock so I can be there for making dinner for my kids and being with them when they get home from school. So we said fine. Let’s have a flexible schedule so you can have hours that work for you.”

Translation:

Women will never make their career their number one priority, they will always put their families first. As the boss, that means that if I hire a woman I need to change the way I do business to accomodate her schedule. I am willing to do that, [but only because I need only  pay her 72% of what I pay her male counterparts.]

Furthermore:

“We’re going to have to have employers in the new economy, in the economy I’m going to bring to play, that are going to be so anxious to get good workers they’re going to be anxious to hire women.”

Translation:

Given how unproductive female workers are relative to male workers, as a boss I will only hire a woman after I have exhausted the supply of qualified male workers [and, even then, only because I need only pay her 72% of what I pay her male counterparts.]

I may be reading between the lines here, but this is probably a pretty good representation of the way that employers make their hiring decisions; we all want to think that employers pay women less because women are discriminated against in the workforce, but the reality is that a sizeable portion of the gender wage gap is there to compensate firms for taking on female workers who they expect will be less productive than their male counterparts.

Now, you might say that that is discriminatory, but there is plenty of evidence to suggest that even before they have husbands and children (who, like chicks in a nest, would starve at the end of the day if mom didn’t come home at 5:00 to feed them) women underinvest early in their careers in anticipation of having families.

Take for example the study that concludes that lesbian woman who have been previously married to men do not benefit from as great a “lesbian wage premium” (which is about 6% over the wages paid to heterosexual women) as lesbian women who have never been married to men, because those women under-invested in their careers in anticipation of one day having a husband and family.*

Or the study that concludes that obese women who are unmarried do not suffer the same wage penalty as obese women who are married, because those, single, women invest more in their careers in anticipation of never having a family — so much so that they are able to compensate for the discrimination they face as obese workers.**

Both of these studies try to measure what we call “unobservable characteristics” — the talents we bring to our jobs after everything we can measure (such as education, tenure, family situation) has been taken into consideration. Unobservable characteristics are, at least in part, one of the reasons why women get paid less than men — even men who look identical on paper.

Romney gave an honest, albeit tough love, answer to this question. He has made it pretty clear that he believes that “the private market and individual responsibility always work best” (which is direct quote from the first debate) and, I suspect, that in his mind the gender wage gap is the direct result of a free market in which workers are paid according to their productivity — if women are less productive workers than men who is the government to say they should be paid equally?

Well, me for one.

* Daneshvary, N.,  Jeffrey Waddoups, C. and Wimmer, B. S. (2009), “Previous Marriage and the Lesbian Wage Premium.” Industrial Relations: A Journal of Economy and Society, 48: 432–453.

** Brown, Heather (July 2011). “Marriage, BMI and Wages: A Double Selection Approach.”  Scottish Journal of Political Economy, Vol. 58 (3).

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Comments

  • Rober  On 19 October, 2012 at 8:00 pm

    very true… A very detailed account of these issues would be in this book by Warren Farrell “Whe Men Earn More”, which also describe the fields and more importantly subfields where women earn more than men. Some of them are surprising, but they tend to make sense once you look at the whole thing from an economist’s point of view…

  • Linda  On 19 October, 2012 at 9:46 pm

    Glad to see you posting again!

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  • Barrie Hebb  On 20 October, 2012 at 7:15 am

    First, I think it is challenging to sort out the actual wage gap. I mean, equal pay for equal work. Finding enough men and women who essentially have similar backgrounds, qualifications, effort, productivity, and figuring out how much less women get for the same work has got to be a serious challenge. Especially if you are adding in factors like flexibility in the work schedule etc. This line of argument, addressed here at the outset, is really important. But I would raise a second issue. Part of changing the gap is also changing the men’s side of the wage gap. Why cant husbands be expected, and culturally reinforced, to pick up some of those household duties and demands, like taking the kids to school or providing dinner, etc. It is happening surely and I know personally of examples, but in broader terms, paternity leave, time away from careers for men could also play an important role in closing the gap by introducing more family oriented factors that hurt women’s income and career prospects to similar extents for men.

    I see the wage gap debate as too one sided and too narrow. There needs to be a broader discussion about men, women, and gender comfort in the workforce that moves well beyond man work, women have household duties to combine with work, and that is that….

  • Héctor Muñoz  On 24 October, 2012 at 6:13 pm

    ” if women are less productive workers than men who is the government to say they should be paid equally?

    Well, me for one.”

    I’m interested in knowing why.

    Should men be punished softer than women for violent crimes because they are innately more violent? That way the tendency to punish men more frequently than woman with death penalty for the same crime would be reversed.

    • M. Adshade  On 24 October, 2012 at 8:40 pm

      That’s a valid question, and the example you give is a perfect example of why I feel that way. Most criminal acts are not committed by women, most are committed by men. In fact the division of incarceration rates by race and gender, in the US in particular, is quite striking. The observation that African American men are significantly more likely to be incarcerated suggests to me that there is a role for government to play at reducing that imbalance. Not by giving African American men more lenient sentences, but by figuring out what underlying social and economic conditions are leading to that imbalance and trying to find policy solutions.

      I don’t think the solution to the gender wage gap is laws that force firms to pay women more than their productivity warrants. I think the solution is finding the underlying cause of the productivity differential and try to come up with policies that reduce it. In an age in which more and more families are dependent (some solely dependent) on the women’s earnings it is in everyone’s best interest to see that the gender wage gap is lessened. This isn’t just an equality issue, this is a child welfare issue.

      Of course before that can happen, we have to admit there is a productivity differential and it seems we aren’t really there yet.

  • Eric  On 24 October, 2012 at 9:09 pm

    I actually think that there are female dominated careers that society undervalues.

    On the other hand I can never understand why “wage gap” comparison never include the fact that men tend to value money more then women.
    And that they are more likely to choose a job they like less as long as it pays more. Plus they are much more likely to move and do dangerous work. Basically if men make choices to value money more and woman don’t then I believe that having a wage gap is fair. I still of course believe in equal pay for equal work.

    • Héctor Muñoz  On 24 October, 2012 at 9:54 pm

      I do think that a way to work around this issue is not to have the government force companies to pay men less than women for the same amount of job but having the government help women have more time to dedicate to their careers with quality daycare paid by the state, pregnancy and motherhood leaves paid by the state and flexible work-from-home schemes promoted by the state.

      In the case of men reciven harder punishments than woman for the same crimes, I think that is just plain sexism

    • Julia  On 31 October, 2012 at 1:34 am

      One really obvious cause of the productivity differential between men and women is the baldfaced discrimination against men when it comes to flexible hours and parental leave.

      An employee who takes those options loses some of their value to the firm–flexible hours reduce efficiency by hindering co-operation between employees, and parental leaves cost the firm huge amounts of money, not just in paid leave, but also the cost of recruiting, hiring, and training a short-term replacement for the employee on leave.

      So when those options are only available to female employees, female employees necessarily become less valuable (if they do take those options) or at the very least more risky (if they’re not taking those options currently, but could do so at any time).

      When those options are not available at all, then one of the two parents must quit work to take care of the child. Since the physical demands of childbearing make the woman in a straight couple the obvious choice for who should quit work (the woman will probably have to take at least some time off to recover anyway). So in those cases, female employees again present more risk to the employer than male employees, because women are more likely to quit.

      So the only way to resolve this productivity differential is to mandate that firms 1) provide support options to parents and 2) extend those options to both men and women, without sexist discrimination against men. I strongly suspect Mitt Romney had more than one male employee who would have wanted to leave at 5pm to go home and cook dinner, but never had the opportunity to do so.

      A great example of this is Sweden, which has mandated that maternity leave and paternity leave be equal in length. Sweden as a pay gap that is much smaller than the one in the US, with women making about 82% as much as men. (Granted, that’s still not 100%, but it’s still better.)