More Revealing than Its Producers Realize

(Don Boudreaux)

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Here’s a video starring actress Kristen Bell.  This video is intended to be a parody that raises our consciousness about the fact that the average pay of women in America is lower than is the average pay of men.  Yet as each of the many people who have sent this video to me point out, this video actually, if unintentionally, makes an important and correct point about this pay gap – namely, if this pay gap really does reflect widespread underpayment of women, then this pay gap is a huge profit opportunity for entrepreneurs of the fictional sort whose company is featured in this video.

Of course, the actual producers of this video – and, presumably, also Ms. Bell – do not understand that the sort of fictional entrepreneurial business featured in this video is precisely what would arise if women were generally underpaid (that is, if women were generally paid wages less than the value of their marginal products).  Like most economically uninformed people, the actual producers of this video likely conclude that women are underpaid merely from the fact that women’s average pay is less than men’s average pay.  Yet, of course, this conclusion makes no more economic sense than would the conclusion that, because the average pay of teenagers is less than the average pay of people older than 19 years, teenagers are underpaid.  Or the conclusion that, because the average pay of N.F.L. quarterbacks is higher than is the average pay of N.F.L. punters, that punters in the N.F.L. are underpaid.

The fact that the real-world economy does not have a for-profit business such as “Pinksourcing” – the video’s fictional company that connects profit-hungry firms to underpaid women workers – is strong evidence that women are not generally underpaid.  Women workers themselves have strong incentives to quit jobs at which they are underpaid and move to higher-paying jobs.  Business people – including businessmen – have strong incentives to search for, and to compete to hire, workers, men and women, who are currently underpaid.  This competition raises women’s pay up to the value of their marginal products no less than does competition raise the pay of men up to the value of their marginal products.

“Progressives,” alas, stubbornly deny that market forces work in this way and toward this happy effect.  But why should we pay any attention to those who insist that profit opportunities abound in the real world yet who themselves never do anything beyond such self-righteous, cheap insisting?

If women are generally underpaid – if low-skilled workers are generally underpaid – if non-unionized workers are generally underpaid – if legions of college graduates are generally underpaid – if military veterans are generally underpaid – if blacks are generally underpaid – if all workers generally are underpaid then profit opportunities abound!  Because for most jobs there are no government prohibitions on entrepreneurs hiring more women (or more low-skilled, or non-unionized, or black, or whatever) workers, anyone who insists that women (or low-skilled, or non-unionized, or black, or whatever) workers are so chronically underpaid that coercive government intervention is necessary to remedy the problem should be required to put his or her own skin in the game before we buy his or her assessment of reality and his or her accompanying policy recommendations.

“Progressives” nearly all balk at the above challenge.  “We are academics!” they say, as if such a confession of ineptness and inexperience excuses them from butting into the lives of strangers in ways that, should these officious intruders’ social experiments fail, the costs will be borne exclusively by the strangers.  I conclude from the arrogance of such “Progressives” and other interventionists that they are far more interested in greedily satisfying their own lust to lord it over others, either directly or as advisors to the lords, than in actually helping the people who they say – and who perhaps they have convinced themselves – they wish to help.

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(I thank the many people who sent to me a link to the above video.)