Reason Roundup

Bad Math and Worse Policy Ideas on Equal Pay Day

Plus: closing the border is bad for U.S. "profits" and Jesse Singal on left-wing identitarianism.

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zumaglobaleight750216 | Creative Touch Imaging Ltd/ZUMA Press/Newscom
(Creative Touch Imaging Ltd/ZUMA Press/Newscom)

Today is "Equal Pay Day," which means wildly misleading information about workplace discrimination will be flowing in service of Democratic Party policy goals.

Last week, congressional Democrats introduced legislation to impose vast new federal power over employee pay. National Law Review has a good rundown here. The "Equal Pay Act" expands on failed Obama-era legislation known as the Paycheck Fairness Act.

State legislators are also on the case. "California has the strongest equal pay laws in the nation — but there is still more work to do," said Jennifer Siebel Newsom, wife of California Gov. Gavin Newsom, a Democrat. She's leading a campaign to "raise awareness of the gender pay gap as part of an effort to achieve pay equality for women," as CNBC puts it.

But the most striking thing to be "aware" of about the gender pay gap is that a huge array of data show it's driven by women's choices. "The gender gap shrinks to between 8 percent and 0 percent when the study incorporates such measures as work experience, career breaks and part-time work," as Baruch College economist June O'Neill has written.

"Women's choices" may be a bit of shorthand for what's really at play here—some preference on display, along with structural inequalities and differences (some quite biological and immutable, some more flexible) that lead to differences in employment situations, working hours, etc.

But what is certainly not at play is a simple matter of employer discrimination, or something that can be fixed by federal study groups, class action lawsuits, and mandates that companies must provide detailed justifications for employee pay scales to a centralized approval board.

People who oppose these sorts of interventions often get accused of sexism or (at best) indifference to "wage discrimination." But nobody is helped by pretending that increasingly bureaucratic wage regimes are the answer. Instead, it's on us to point out alternative soluttions—like getting rid of government barriers.

"The surest way to eliminate wage discrimination is to keep government from impeding the competitive process with such devices as occupational licensing, permits, minimum product standards, so-called intellectual property, zoning, and other land-use restrictions," writes Sheldon Richman.

All government barriers to self-employment — and these can take implicit forms, such as patents and raising the cost of living through inflation, or burdening entrepreneurs with protectionist regulation — make workers vulnerable to exploitation. Being able to tell a boss, "Take this job and shove it," because alternatives, including self-employment, are available, is an effective way to establish the true market value of one's labor in the marketplace. With the collapsing price of what Kevin Carson calls the "technologies of abundance" (think of information technology and digital machine tools), sophisticated small-scale enterprise — and the independence it represents — is more feasible than ever.

In case you need more ammunition in battling bad ideas today, check out these pieces from the Reason archives:

FREE MINDS

Jesse Singal riffs on "left-wing identitarianism," a more virulent cousin of the often-just-fine "identity politics."

Left wing identitarianism "views the link between certain identities and marginalization as absolutely crucial to understanding America, and seeks to highlight it whatever possible," Singal writes.

So its adherents are uncomfortable when people from marginalized groups don't act marginalized. … Left-wing identitarians, again, have a strong bias toward essentialization. It seems to make them uncomfortable when members of marginalized groups aren't particularly interested in talking about their marginalization, or — I hope you're sitting down — don't feel entirely marginalized.

What does all of this have to do with Mayor Pete Buttigieg? Find out here.

FREE MARKETS

"I'll just close the border" with Mexico, President Donald Trump told reporters last week. 'With a deficit like we have with Mexico and have had for many years, closing the border will be a profit-making operation."

"Even by his 'Trade Is Bad' standards, President Donald Trump's threat to shut America's border with Mexico is a doozy," writes Eric Boehm.

Even if the United States were a single large corporation—a bad analogy for many reasons, but one Trump seems to be grasping towards—closing the border would not be a "profit-making" move, any more than a business would be making a profit by deciding not to buy or sell anything. That's actually a fine way to guarantee that you don't make a profit. … And that whole analogy is flawed, because the U.S. is not a single corporation and the president is not our CEO. Cutting off trade between the U.S. and Mexico would have enormous negative consequences for businesses on both sides of the border, because cross-border trade is the result of countless individual decisions dictated by market signals. It's not the United States that trades with Mexico and vice versa; individuals and businesses on both sides of the border trade with one another, seeking mutually beneficial deals.

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