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Harris and the Pay Gap Myth

Democrat Kamala Harris is the latest Presidential candidate to peddle the myth about “pay gaps” for female workers, going so far as to make this an essential part of her platform. Harris has a plan to require larger companies with 100 or more employees to obtain an “equal pay certification” every two years in order to ensure that men and women are paid equally.

There are many reasons a pay gap to exist — but it isn’t because of one’s gender. It has been shown time and again that many women have alternative career paths by choice: different jobs, amounts of time worked, lifestyle flexibility, and risks in occupation to name a few; therefore, any difference in the pay is a result of those choices and not discrimination.

Taking these items into consideration, the pay gap myth shrinks almost entirely, likely no more than a 2% variance. This empirical analysis should not be surprising — in fact, it should be what any normal person, certainly any business person, would expect. Because the simple economic reality is that if women actually did make 23% less than men in wage costs for the same work, businesses would almost entirely hire women as a means to minimize labor costs and maximize profits. Since this does not actually happen, it is obvious that the 23% wage disparity merely a distortion perpetuated by the Left to score easy talking points.

It is also a false conclusion that a gender pay gap is damaging to women because women will likely have substantially less money saved and earned over her lifetime. Those such as Harris that push such nonsense don’t even consider that, for many women, working full time may be “damaging” to women who have alternative life goals — such as raising a family — and that amassing retirement funds might not be the ultimate end focus. Voters should reject Harris “equal pay certification” proposal as economic nonsense.

The Gender Pay Gap is Still a Myth

It’s frustrating when popular TV economists perpetuate economic myths that have been thoroughly debunked. Last week, Becky Quick, host of CNBC’s “On the Money”, interviewed Bethany McLean, Contributing Editor over at Vanity Fair. They discussed the subject of equal pay for women; unfortunately, they both asserted that women only earn 77% of pay that men do, a charge that is simply untrue, but endlessly repeated.

Factors such as education paths, child bearing choices, hours worked, and job risk are not always equal for men and women. Taking these items into consideration, the gender wage gap shrinks almost entirely, with likely no more than a 5% variance. This is also supported by the simple economic reality that if women actually did make 23% less than men in wage costs, businesses would almost entirely hire women as a means to minimize labor costs and maximize profits. Since this does not actually happen, it is obvious that the 23% wage disparity is merely a distortion perpetuated by the Left, and most notably by the White House.

It’s one thing for partisan politicians to spew such nonsense, but for an economics reporter to peddle it as well is absolutely irritating and reckless. She should know better.

The (Mythical) 91% Tax Revenue Booster

There is a persistent idea circulating that the current tax margins are really not all that high when compared to past rates. This line of thought is typically used as justifications that 1) the government deserves more revenue and 2) the wealthy taxpayers can afford higher taxes. The truth, however, is that obtusely higher rates in the past were rarely ever paid at that amount because they were easily offset by abundant tax deductions universally used by the wealthy. (more…)