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Source link: http://archive.mises.org/2387/current-topics-in-economic-policy-equal-pay-discrimination-glass-ceiling-lecture-26-of-32/

Current Topics in Economic Policy: Equal Pay, Discrimination, Glass Ceiling (lecture 26 of 32)

August 22, 2004 by

These notes are from the lecture Current Topics in Economic Policy: Equal Pay, Discrimination, Glass Ceiling, given at the Mises University. Any errors are mine, feel free to point them out so that I can correct them. This lecture was given by Prof. Block.


  • Short answer to critics: they’re wrong.

  • Affirmative action is Jesse Jackson’s position.

  • Libertarian position:

    • Private affirmative action is ok.
    • Public affirmative action is not ok.

  • The usual view is what white wages are greater than black wages, and that male wages are greater than female wages.

  • The claim is that most employers are white men who hate blacks and women (I’ve always thought that men tend to like women).

  • F{w}:M{w} = B{w}:W{w} = 0.75

      F{w} = female wages

      M{w} = male wages

      B{w} = black wages

      W{w} = white wages

  • The claim is that because employers hate blacks, the demand for black workers is low.

  • Marital assymetric hypothesis (libertarian alternative):

    • Marriage has an unequal market effect on men vs. women.
    • “Women are not as productive as men”.
    • But this is not saying that women are inferior, but just that women are more active in some other areas (namely, family), and less
      active in the workplace.
    • Wives tend to do more houswork.

  • Why are blacks 75% as productive as whites on the market? Possibilities:

    • Slavery, discrimination, Jim-crow legislation.
    • Alternate theory is that blacks have a lower IQ.

  • Married men are much more interested in promotion than are married women; thus, marriage makes men more eager to get a promotion, and women less eager to get one.

  • Married men are less likely to move for their wives if they get a job-offer than married women are likely to move for their husbands if they get a job-offer.

  • Logical proof that the discrimination-theory is wrong:
    • The reality of male and female wage-rates vs. what feminists claim is their respective productivities:
        Category Male Female
        Wage $10 $7.5
        Productivity $10 $10

      • Profit = Productivity – Wage

        Profit{men} = $10 – $10 = 0

        Profit{women} = $10 – $7.5 = $2.5
      • This is nonsense, because if this were the case, firms that hire men would go broke, and those hiring more women (or only women)
        would have enormous profits. This situation is clearly instable.

    • The reality of the productivity of males and females vs. what feminsits want their wage-rates to be:
        Category Male Female
        Wage $10 $10
        Productivity $10 $7.5

        In this situation, firmstrying to pay women $10 lose money on them (thus, would most likely hire less women than they otherwise

    • The way things really are:

        Category Male Female
        Wage $10 $7.5
        Productivity $10 $7.5

  • The point is that on the free market, discrimination is viciated against discrimination. Anyone discriminated against becomes more marketable, as their salary is lower.

  • The reason that blacks/minorities are charged more is because it costs more to serve them.

  • Does the market discriminate against tall people or obese people? No, the higher costs these people face simply means it costs more to serve them.

Empirical Research

Lets look at the wages of men vs. women in Canada, 1971, over 30 years old:

Symbol Definitions
Symbol Definition
W{mF} wages of married females

W{nmF} wages of never-married females

W{mM} wages of married men

W{nmM} wages of never-married men

Wages of Married and Never-Married Men and Women
Category Ratio
W{mF}:W{mM} 0.33
W{nmF}:W{nmM} 0.992 (no gap)
W{F}:W{M} 0.38

Wages of Men vs. Women in Various Age-Groups
Category W{F}:W{M}
All 0.76
25 and over 0.74
16-24 0.95

Glass Ceiling

  • The glass ceiling theory is that women are highly under-represented in the upper extremities (top-notch) of whatever you want to talk about.

  • Block’s argument is that men are “God’s crpshoots”. There are more male CEO’s, but also more male crooks and nut-cases.

  • Women are stable, “God’s insurance policy”.

  • The idea is that the the distribution of male and female intelligence, while having the same average, has a different variance. The female distribution has less variance, and is focused around the mean, with thin tails. The male distribution has more variance, with less focus around the mean and fatter tails.

  • There is a socio-biological reason for this: men are expendible, women are not.

  • From the standpoint of human repopulation, if a lot of men die, so what? If a lot of women die, it’s bad because you can’t repopulate.

{ 1 comment }

Ryan April 7, 2010 at 6:57 pm

I was wondering where I could find the data set for empirical research for the incomes for never-married and married males and females. The larger data set would be helpful.

Thank you.

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