The gender pay chasm is a dangerous political myth

The BBC recently ran a piece marking the 40th “anniversary” of the introduction of the equal pay and sex discrimination acts. The author expressed her belief that women are now better off due to the introduction of this legislation four decades ago. She concluded that since an apparently significant gender pay gap still remains greater enforcement of the laws and even further legislation is needed to complete the job, as it were. This is a good representation of the public’s belief about the gender pay gap and legislation aimed at closing it, but what is the reality?

The truth about the gender pay gap

I’m sure most people do not realise that the official UK government figures for the gender pay gap, as used by the BBC and other mainstream media, overestimate the difference a great deal. This is because the Office for National Statistics figures don’t control for the many factors that affect wage rates of women and men — such as experience, education, company size, family status and job title. In short the ONS doesn’t compare apples with apples and fails to account for the complexity of the situation. Dodgy data doesn’t bother equality campaigners, but it should bother everyone interested in arriving at the truth.

A recent study by PayScale in the US analysed 1.4 million salary profiles and did adjust for these factors. It showed that the real gender pay gap for all workers is only 2.7%. This is almost ten times lower than the official US government figure of 25.6%. That’s a massive difference.

This tells us that the gender pay gap in the UK is also almost certainly much lower than the official figure of 19%. The true difference between the wages of men and women in comparable roles in the UK is likely only 2%. Again, a massive difference from the official figure the public is presented with.

The PayScale report concludes that “…in effect, much of this difference can be thought of as the cost of having children.” Fathers make more than non fathers among men, and mothers make less than non-mothers among women. This is the true size and nature of whatever problem remains. It’s not the mountain many believe it to be. It’s a mole hill. It most certainly isn’t a widespread social injustice that requires the further expansion of State control over the economic exchanges of individuals in order to protect women from a mythical menace.

Is discrimination a crime?

The key ethical question is should we prevent the behaviour behind this issue by use of the coercive apparatus of the State? Which is actually to ask: is it a crime to have an irrational belief or to hold an unconscious bias against women and to base the terms of one’s economic exchanges on such? If we’re not just paying lip service to the ideal of liberty, then the answer must be no. This behaviour cannot be defined as a crime because such behaviour doesn’t restrict the freedom of anyone else to use their own person or property as they wish.

Put simply: not exchanging the same amount of your property with Sue as you do with Steve is not violence and is not theft. There can be no such thing as a ‘right’ for Sue to use force to prevent someone from paying her less than someone else to perform the same role in the same way that she has the right to use force to prevent someone from harming her person or stealing her property.

Yet wage equality campaigners insist that irrational sex discrimination is and should be a crime. They implicitly assert that is an action in the same ethical category as theft, and lobby government to make laws prohibiting it. This is what economist Thomas Sowell meant when he said “[modern] liberalism is totalitarianism with a human face.” The totalitarian ruler makes illegal all peaceful behaviour that doesn’t fit in with his plan for society.

It would be foolish to argue that irrational sex discrimination doesn’t exist at all. It does. Humans are not perfectly rational. But it’s a much far less significant social and economic problem than equality campaigners believe it to be and the mainstream media tells us it is. The belief that sex discrimination is today rampant throughout the economy is almost a conspiracy theory. If not that, then a form of political persecution of one group of people in society: men.

Legislative law: the biggest threat to social progress

For centuries the law of the land favoured men and as a result women were the victims of unjust laws that restricted their social and economic freedoms. But now the scales have tipped fully the other way and the law is granting women special privileges and restricting the freedoms of men. The ideal of the law is as a balanced scale, but under democracy the weight is constantly shifting side to side and crushing the freedoms of one group or another. The beliefs and preferences that dominant the minds of the majority in any given era often become (unjust) legislative laws via the political process. The great danger is that, as the efforts of the political Left and Right only ever increase the weight of legislative law bearing down on society, they together, but unwittingly, create a totalitarian State and eventually crush every groups’ freedoms.

The peaceful means to social progress & the inefficacy of legislation

Like racism, sex discrimination in British society over the past four decades or so has changed from being a somewhat common and tolerated behaviour to being an uncommon one that is rarely tolerated. The question is: how did this social progress, this change in the mindset of the common man, come about? Was it achieved peacefully without State control or approval through the progressive forces of free markets and free society? Or was it through the brute force of government with the introduction in 1975 of the equal pay and sex discrimination acts?

This is a difficult question to answer. But there is evidence from the US to suggest that the gender pay gap had shrunk over periods of time before the Equal Pay Act was introduced there in 1963. As Claudia Goldin, Professor of Economics at Harvard University, explains in a piece for the Library of Economics and Liberty:

“Between about 1820 and 1850, an era known as the industrial revolution in America, the ratio of female-to-male full-time earnings rose from about 0.3, its level in the agricultural economy, to about 0.5 in manufacturing. From about 1890 to 1930, when the clerical and sales sectors began their ascendancy, the ratio of female earnings to male earnings again rose, from 0.46 to 0.56. But in neither of these periods did married and adult women’s employment expand greatly. Yet, between 1950 and 1980, when so many married women were entering the labor force, the ratio of female earnings to male earnings for full-time, year-round employees was virtually constant, at 60 percent.”

She concludes that there is “…only scant evidence that [legislative law] has had any effect on the gender gap in earnings or occupations, although not enough research has been done to justify strong conclusions one way or the other.”

Despite the lack of evidence that legislative law has any effect on the social issues it is aimed at solving, wage equality campaigners continue to lobby government and demand the expansion of State powers. If they were more interested in problem solving than in leveraging State power to control people and punish them for being imperfect, then they would long ago have abandoned the belief that legislative laws can achieve social progress. But they haven’t. This reveals how blind and strong, how impervious to objective truth, faith in State power is in the minds of subscribers to modern liberalism. All totalitarianism needs is a people with total faith in power.

Every economy is dynamic, and not designed

These periods of natural shrinkage in the gender pay gap also serve as an ever useful reminder that no economy is static or evenly rotating. Every economy is dynamic and in a constant state of change. Employment rates vary, the percentage of the workforce that is female fluctuates. As does the difference between the wages of men and women, over time and between economic sectors. Nothing about any economy is ever static.

State intervention advocates across the political spectrum believe the economy is the result of human design. But they are profoundly mistaken. Economies are the result of the laws of economics. Which is to say they are the result of how human beings act in response to scarcity. Economies and thus societies are the result of human action — not human design.

Prosperity is the accumulated result of the economic exchanges between large numbers of people all free to think and act, and all free to selfishly (in the non pejorative sense) pursue their own plans. It is not the result of the grand plans of men in State power. No law can create wealth because laws can only restrict human action, and the action of economic exchange is what creates wealth.

The most laws can do is redistribute wealth according to the plans of lawmakers. But lawmakers are just imperfect creatures like everyone else. How can they know what’s best for millions of individuals better than the individuals themselves? They can’t. Such knowledge is dispersed among millions of minds and thus is unobtainable.

This is a profound truth that wage equality campaigners do not grasp or else refuse to see. If they understood this then they would realise that State legislative power is powerless to make the world a better place. Worse still, legislative laws invariably result in unintended consequences. Ones which are often the opposite of the intended aim of the legislation.

The gender pay gap has been reduced a great deal over the last few decades through peaceful means, but we shouldn’t be surprised if over the coming decades the gender pay gap starts to widen, as a result of attempts to use State coercion to achieve the same end.

When it comes down to it, the only truly troublesome chasm in the mythical mountain of the gender pay gap is the one between reality and the faith in State interventionism to make the world a better place shared by economic equality advocates throughout the western world.