A Case Against Equal Pay for Equal Work Laws

The morals behind equal pay for equal work laws are just, but in practice, they are actually hurting women. The free market harshly punishes firms who discriminate unfairly based on gender and not value, let me show you how.

Why value is so important

Firms hire based on value, they calculate the marginal contribution to productivity/revenue per worker and negotiate a wage based on that. Now, the market operates such that profit is maximised when cost is at it’s lowest feasible point, this is how firms compete in capitalism. Ask yourself: if women are truly getting paid less than men when offering the same amount of productivity and value, then **why on Earth are employers bothering to hire men?** If women are cheaper, and they offer the same, why would employers be shooting themselves in the foot by hiring more expensive, relatively inefficient men to uphold this ‘patriarchy’?

This is not to say that women inherently offer less in terms of value, that would be absurd and sexist. Although, it is a widely accepted fact that women choose different paths in life than men, they are generally more family orientated, they tend to be the ones who stop working to raise a family, and they generally work less overtime. This puts them at a significant disadvantage in terms of the value they can bring.

Is it fair to impose that a woman who took 12 years off to raise a family, and is now returning to work, should be paid the same as the man who spent those 12 years developing his skill-set and experience? Arguably, such laws would even hinder the woman’s chances of finding work at a similar level of responsibility, as the man who has spent all of those 12 years gaining experience brings much more value to the company than the woman, for the same cost to the company. Who would you choose if you had to hire one?

The hypocrisy of the proposition

Of course, the argument is always framed towards one gender, but it always works both ways. You never hear the people calling for equal pay for women CEOs call for equal pay for male models, even though they are typically paid enormously less than their female counterparts. No one is complaining about an invisible matriarchy in the modelling sector, but following the logic of those shadow-boxing the patriarchy, they should be.

The reason female models are paid more than their male counterparts is because they return more value. Certain products sell better when they are advertised by women, and those products have higher profit margins than those advertised by men, so naturally, the woman should be paid a greater share.

The same goes for CEOs, men who typically have the most experience and qualifications in the sector perform better than the smaller pool of women in the same role, some who take time off to raise a family, or chose to work less overtime, gain less qualifications, or even have less experience. The men in these roles typically perform better than their female counterparts because of this experience, and naturally demand a greater share of the profits. A female CEO who performs the same as the male CEO should be paid the same, and if they aren’t, the free market will punish the firm when a competing firm offers her more for her work and ends up performing better as a result.

The Solution

The free market punishes inefficient business practices harshly. We should let the companies who discriminate based on gender fail, because the companies who do hire the women with high value at a high price would perform much better than companies hiring men with the same value at a much higher price. The free market will create a natural meritocracy, as it always does, where productivity and value are rewarded and needless discrimination at a price are punished.