Economic Facts & Fallacies – Part Three

Anne Marie Waters

September 29th 2020

 

In this series of blogs, I’m looking at some of the ideas of the American economist Thomas Sowell, and specifically his book Economic Facts and Fallacies.  You can read parts one and two here.

This week’s topic is highly topical and Sowell puts forward the most fascinating arguments to this question: what is the ‘gender pay gap’ and what has caused it?

In chapter three – Male Female Facts and Fallacies – Sowell argues that the gender pay gap is not what modern day feminism or equality campaigners describe.

Firstly, Sowell outlines the mainstream narrative: that women have been oppressed throughout history and advancements have only been made through feminist campaigning and legal changes to require equal pay.  While he acknowledges there is truth in this, women certainly have earned less and have been subject to social and religious restrictions, in the West today, this is broadly not the case.  He points to the fact that more women than men receive honours degrees in the US today, as well as Sweden and other Western countries.  Laws have been passed to ensure equal pay for equal work, and women make up around half the work force in most Western nations.

To understand the arguements around the gender pay gap, Sowell believes we need to look to history first.  He acknowledges that women have been paid less than men, but puts forward potential reasons for this that do not necessarily involve unjust discrimination against women.

Our agricultural history is one example because much of the work required a level of physical strength few women could meet.  This changed not because of campaigns against sexist policy, argues Sowell, but economic advancement generally.

The replacement of human muscle by machine power, and the growing importance of industries and occupations not dependent on either, have made sex and age differences no longer as significant as they had once been.  The economic consequences could be seen in the rising age at which people reached their peak earnings, now that experience and skill were more important than physical strength.  Other economic consequences included reductions in male-female pay differentials, even before laws were passed mandating equal pay for equal work.  

A further potential cause of gender pay disparity is another obvious physical difference – women give birth.

Mothers as a group tend to fall furthest behind men in income, as competing domestic responsibilities reduce the ability of women with babies and small children to be able to maintain continuous, full-time employment in the workforce.

A fascinating aspect of Sowell’s work in this area is the pattern of women’s education in recent years.  He argues that we can only compare male and female income if we are comparing from an equal footing.  In other words, we can only find discrimination against women if all other factors are equal; same education, skill etc.  Women have been, and still are in some parts of the world, discriminated against in terms of education rather than job opportunity, meaning it is difficult to properly adduce active discrimination in employment.

Interestingly, women’s advancements in education have been higher in the past.  For example, the proportion of women in the professions and other high-level positions was greater during the first decades of the twentieth century than in the middle of the twentieth century – and all of this was before either anti-discrimination laws or the rise of the feminist movement.  

Several statistics reveal the numbers of women earning degrees, doctorates etc. as greater at the start of the 20th century than in the middle.

In summary, Sowell shows that, as with so many mainstream narratives today, all is not what it seems.  In effect, he is stating that it is economics and education that create the work situation for men and women, and not necessarily discrimination by employers.  Indeed, he states that the demand for female workers was pushed by employers and businesses themselves, who were keen to tap in to the “manpower” of half of the population.

Sowell concludes:

Among the many factors which influence male-female economic differences, the most elusive is employer discrimination.  Since no one is likely to admit to discriminating against women, which is both illegal and socially stigmatised, in principle discrimination can only be inferred indirectly from the disparities between men and women that remain after all other factors have been taken in to account.  In practice, however, there is no way to take all other factors in to account, since no one knows what they all are and statistics are not always available for all the factors we do know about.  What we are left with, after taking into account all the factors that we are aware of and for which statistics are available, are residual differences which measure the upper limit of the combined effect of employer discrimination plus whatever other factors have been overlooked or not specified precisely.  That residual is often much smaller than the gross income differences  between men and women, sometimes is zero, and in a few intances women earn more than men whose measured characteristics are similar.  

What is so notable about these ideas is how rarely we hear them.  Voices like Sowells are not included in the debate surrounding the gender pay gap.  As with climate change and coronavirus (and other key issues) we are presented with one version of reality and nothing is permitted to call this in to question.  The narrative is that women earn less because of discrimination, the reality is far more complex.

 

Anne Marie Waters 

Leader 

For Britain 

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