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Tuesday, February 10, 2015

War of the Sexes: Part 9 - War in the Workplace

One of the major battles in the War of the Sexes is in the work place. Within this realm, I don't think anything draws the ire of feminists more than the following:
On average, full-time working women earn just 77 cents for every dollar a man earns.
It's seen as inherently unfair, certain to be a symptom of rampant discrimination and oppression by the patriarchy. After all, given that women are equal to men in every way (except, of course, where they're better), how could anything but nefarious motives possibly explain why women are paid so much less?

To those of us, such as myself, who are deemed to be part of the evil patriarchy, it looks like there are a large number of reasons for the salary discrepancy, and most of them aren't nefarious at all. Indeed, according to a US Department of Labor report, pretty much the entire wage gap can be easily explained:
There are observable differences in the attributes of men and women that account for most of the wage gap. Statistical analysis that includes those variables has produced results that collectively account for between 65.1% and 76.4% of a raw gender wage gap of 20.4%, and thereby leave an adjusted gender wage gap that is between 4.8% and 7.1%. These variables include:
  • A greater percentage of women than men tend to work part-time. Part-time work tends to pay less than full-time work.
  • A greater percentage of women than men tend to leave the labor force for child birth, child care and elder care. Some of the wage gap is explained by the percentage of women who were not in the labor force during previous years, the age of women, and the number of children in the home.
  • Women, especially working mothers, tend to value “family friendly” workplace policies more than men. Some of the wage gap is explained by industry and occupation, particularly, the percentage of women who work in the industry and occupation.
Research also suggests that differences not incorporated into the model due to data limitations may account for part of the remaining gap. Specifically, CONSAD’s model and much of the literature, including the Bureau of Labor Statistics Highlights of Women’s Earnings, focus on wages rather than total compensation. Research indicates that women may value non-wage benefits more than men do, and as a result prefer to take a greater portion of their compensation in the form of health insurance and other fringe benefits.
This report doesn't even take into account minor little details like fatalities as shown by the following depiction:

Nor does it take into account things like lawsuits. Women bring far more lawsuits against employers than men and some of the awards are astounding. For example, one jury awarded $168 million for a sexual harassment lawsuit. While some of the lawsuits may well be justified (though more than half of all sexual harassment lawsuits are dismissed as No Reasonable Cause), it makes women as a whole more expensive than men for the same job.

Women, still not happy with their compensation relative to men, are turning to the class action suit:
This month, Merck  was hit with a $100 million sex discrimination suit alleging that the company engaged in systemic gender bias. The complaint could be used in a law school as a way to teach virtually every gender-based claim that could possibly be brought against an employer.
The case includes many allegations of discrimination against female and pregnant employees, and staffers who chose to take family-medical leave. The suit also claims that Merck engaged in discriminatory promotional and payroll practices. And the case also includes less tangible “Boys’ Club” allegations, which have become increasingly common in gender bias cases. 
But Merck is far from alone. In a 2011 paper, Holland & Hart’s John M. Husband and Bradford J. Williams list private employers who have settled class actions in the tens — or even hundreds — of millions of dollars, noting that it “reads like a who’s who of Fortune 500 companies.” Many, but not all, involve sex discrimination. 
Class actions are not going away. First, there are plaintiffs’ lawyers who focus on class actions. Let’s face it: That’s where the money is for many lawyers. Indeed, there are some plaintiffs’ lawyers who specifically focus on Fortune 500 companies. 
Second, the Equal Employment Opportunity Commission, in its strategic plan, has prioritized eliminating systemic barriers in hiring. This priority will unavoidably focus on the way employers give out promotions too. 
It is highly likely that the EEOC’s approach will involve more and more class action suits because companywide or systemic issues almost always involve a group of employees. It is probably no accident that the most recent EEOC commissioner appointee is an attorney with significant class action expertise.
This battle in the War of the Sexes is being taken to the courts. It has entered the realm of who can get what from whom and who can control whom. Pretty much like the purpose of any other war. Why do I claim that this is the purpose rather than assume the courts are needed to address some sort of inequity? Consider the following thought experiment.

Let's ignore all the analysis and say that women really are paid less than their value. If that's the case, I would think that women would start lots of companies and hire all these underpaid women because if they did, they'd have a huge advantage in labor costs relative to existing companies, and they would be wildly profitable and dominate the markets in short order. There are even government programs to help encourage this.

Women don't do that. Instead, they turn to the class action trial attorneys. Therefore, I can only conclude that this battle is more about getting something not really deserved rather than actually working towards a positive solution.

With the help of the trial lawyers, my bet is that women will have a decisive victory in the battle of the workplace as well before too long. As they drive more and more men out of work, they may find that victory to be somewhat hollow.


Bret said...

Yeah, yeah, I know, this series is getting long and tedious.

Just 3 more parts after this one and then back to exciting posts in economics! :-)

erp said...

Let's just go back to equality under the law and let the marketplace take care of salaries and I look forward to the rest of the series.

Clovis e Adri said...


Did I get the wrong impression or you do believe many of those women are using sexual harassment lawsuits as part of the war too?

I remember you explaining some of your reservations against big govt along the lines of 'if I were a politician and could get my hands on public money with very little chance of getting caught, I'd probably do it' (this is not a quote, I am describing what I remember of the argument).

Well, if you were a boss of some company, and you could pass your hands on some beautiful women under your command at workplace, with very little chance of getting caught... I guess you get my point.

So what your intuition about human nature tells you here, are the majority of sexual harassment complaints a war on who, men or women?

Hey Skipper said...


Sexual harassment lawsuits are a tiny part of the problem. So long as the employer can demonstrate the existence of meaningful policies against sexual harassment in the workplace (Note: a huge growth area in female employment in the private sector is essentially government mandated -- Human Relations departments), the company won't be found liable.

The real problem is in the post itself: This month, Merck was hit with a $100 million sex discrimination suit alleging that the company engaged in systemic gender bias. The complaint could be used in a law school as a way to teach virtually every gender-based claim that could possibly be brought against an employer.

Progressives, like Obama, for instance, continue to throw gasoline on this fire by bandying about a number so fallacious that only a progressive could believe it.

Bret said...

Clovis asked: "Did I get the wrong impression or you do believe many of those women are using sexual harassment lawsuits as part of the war too?"

Individually, the women are not soldiers in the "war," but rather looters and plunderers, focusing on extracting what they can from others. As Hey Skipper alludes above, they are being egged on by some of their female compatriots (though they're probably more egged on by trial lawyers) so in aggregate, they look much like victorious soldiers, scoring massive retribution against the patriarchy in the workplace.

I'm not saying the women weren't "wronged." They very likely were. But a $100+ million settlement for a single incident is a giant collective punishment against the company, its employees (who will now be paid less), its owners (who are now worth less), its customers (who will pay more for the products of the company), and the rest of society (who will pay more for all products because of suits like these). Lots and lots and lots of completely innocent people punished. To compare it to a hot war, that's a significant bomb to cause $100 million in damage.