Brief thoughts on the gender pay gap

In every country in the world, men are paid more than women. In the developed world, women tend to earn around four-fifths of what men do. In the developing world, it is common for men earn up to six times what women make, particularly in conservative Muslim countries like Iran. With the latter, it is obvious that institutional discrimination and legal barriers for women are preventing them from achieving pay parity. But in the developed world,  the issue is more complicated, largely because there are already anti-discrimination laws, with harsh penalties should the offending employer be found guilty.

The problem with the developed world is not overt discrimination, though I’m sure it exists to an extent. The problem is that having children costs women far more than men. Austria, where the gender pay gap is amongst the highest in Europe, provides very little support for women who have children. This means that women have to take more time off work to look after their newborns, robbing them of the experience and time in work needed to command a higher salary. In countries with a more comprehensive and flexible child welfare system, particularly the Nordic countries and Estonia, the gender pay gap is lower.

I write on the gender pay gap because the British government is currently very keen on eradicating it. But there are a few problems with the government’s approach. It is assumed that large employers are to blame for a lack of pay parity. There is very little evidence to support this. There are no financial incentives to discriminate against women- why not just pay everyone less? High-paying employers who have majority-male staff are victims of the fact most of their job applicants are men; this is particularly true in tech and finance. The government hasn’t considered making welfare more flexible as part of its approach. The situation is not helped by the British Left, which considers the gender pay gap to be a classic social justice issue with oppressors and victims, rather than a structural problem with the welfare state and men and women’s different career preferences. A significant reduction in the gender pay gap is perfectly possible. But it will require time and patience; there are no quick fixes.

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