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Obama's Economic War on Women

Mises Daily: Tuesday, November 27, 2012 by Gregory Cummings

With the re-election of President Barack Obama, it is increasingly evident that the tax eaters outnumber the taxpayers in America. From food stamps to free cell phones, President Obama has achieved significant political success by putting more and more Americans on the government dole. During his recent re-election bid, this effort included considerable pandering to women voters.

Chief among his focus on women's issues is the so-called equal-pay-for-equal-work campaign. In a speech for the campaign, President Obama said,

"The very first bill I signed into law as president was the Lilly Ledbetter Fair Pay Restoration Act. It was a big step toward making sure every worker in this country, man or woman, receives equal pay for equal work."

While it is true that a wage gap between the sexes does exist, common sense and empirical evidence demonstrate that this difference is due to the various individual choices that men and women make with regard to compensation and labor-force participation. It is not caused by sexist employer discrimination.

However, the lack of need has never compelled government to stop passing laws. In the same speech, the president goes on to say, "Thanks to this law, we're one step closer to fair pay for all Americans, but there's still more work to do."

No, that isn't it. Instead of correcting an alleged injustice, additional equal-pay-for-equal-work legislation will only institutionalize wage controls, which neuter the market allocation of resources. Tragically, women, the targeted beneficiary of this supposed government beneficence, will become the primary casualty in the resulting chaos.

The Wage-Gap Illusion

The standard refrain of spurious equal-pay-for-equal-work advocacy is that women are paid only 77 cents for every dollar a man earns. It is noted that "this alleged unfairness is the basis for the annual Equal Pay Day observed each year about mid-April to symbolize how far into the current year women have to work to catch up with men's earnings from the previous year."[1] The president blames this wage gap on the deleterious actions of male-chauvinist-pig employers:

In this economy when so many folks are already working harder for less and struggling to get by, the last thing they can afford is losing part of each month's paycheck to simple and plain discrimination.[2]
Also, according to the president, as quoted in the Huffington Post,

Right now, women are a growing number of breadwinners in the household. But they're still earning just 77 cents for every dollar a man does — even less if you're an African American or Latina woman. Overall, a woman with a college degree doing the same work as a man will earn hundreds of thousands of dollars less over the course of her career. So closing this pay gap — ending pay discrimination — is about far more than simple fairness.[3]
The truth of the matter isn't so sinister. As Thomas E. Woods, Jr., senior fellow at the Ludwig von Mises Institute, eloquently articulates, much of the wage gap can be explained by differences in labor-force participation between men and women:

Many women who enter the labor force are aware that at some point they will have to interrupt their careers, probably for a matter of years, to take care of their children. Naturally, then, women are more likely than men to seek jobs with slow obsolescence rates that allow them to take time off without finding that their skill or knowledge has become outdated by the time they resume their careers. Married women tend to seek flexible working hours to accommodate their schedules. Many work only part time. Many would like to work near their homes. And so on.
These requirements place some restraints on what women are likely to earn vis-à-vis men. For one thing, such highly paid occupations as law and medicine are extremely difficult to leave and re-enter after a multi-year absence. Second, since many women seek the job criteria listed above, the result is a great many women competing for the narrow range of jobs that fit these criteria. Somewhat lower wages in these jobs are merely a reflection of supply and demand — the only rational way of allocating labor efficiently. [4]
In addition, the wage statistics used to calculate the gender wage gap only take into consideration direct wages and not total employee compensation. Wages, when viewed from a total-compensation perspective, include various employer expenditures such as health and dental benefits, vacation entitlements, retirement contributions, employee-purchase-discount programs, commissions, conferences and events, licensing fees, and parental-leave supplements, among others. Not unexpectedly, "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."[5]

http://mises.org/daily/6276/Obamas-Economic-War-on-Women