IN MY COMMENTARY ARTICLE, “DEBUNKING THE MYTHICAL GAP” (The Financial Post, March 9), I criticized the much-publicized feminist claim that the female-male earnings ratio of 64 percent stems from male, employer, and/or sexist discrimination.
I gave theoretical economic reasons and statistical evidence in support of an alternative hypothesis: namely, that this shortfall is almost entirely the result of the asymmetric effects of marriage on male and female incomes.
I claimed that marriage, with its vastly unequal division of housekeeping and childrearing responsibilities, and the differential attachment to the labor force it engenders, enhances the take-home pay of the husband, and reduces that of the wife.
In his column of March 15, “On Earnings Differentials: We must address the male/female wage gap,” Financial Post contributing editor Arthur Drache took issue with my analysis. I thank him for this opportunity to further discuss the points he raised, which my 700-word format did not allow me to elaborate upon.
Let me begin by stating that all of the statistics published by the Fraser Institute on this topic are reported directly from Statistics Canada, or based on citations from studies of StatCan material. Not a single number in our two books, Discrimination, Affirmative Action, and Equal Opportunity, and Focus on Pay Equity: A Critique of the Abella Royal Commission Report, is “massaged,” as contended by Mr. Drache.
True, much of this information was not published by StatCan, especially the data on never-married status; rather, it was generated from StatCan computers, on a very expensive, cost-recoverable basis. But this is, perhaps, because StatCan is not aware of the marriage asymmetry hypothesis, or does not think enough of it to publish material that would allow the independent analyst to address it.
Drache expresses himself as “rather unimpressed” by the fact that never-married women over 30 with university degrees had an earnings ratio vis-à-vis men of 109.8 percent, because they “do not constitute a significant portion of the female work force.”
In this, he exhibits a lack of appreciation for economic methodology. The difficulty we face is that there are no controlled experiments in nature, at least not very often. We cannot randomly assign some people to be married, and others not, and then study their income differences.
If we want to analyze the effect of marital status on income, we must compare the earnings of those who have been married with those who have never had this status. Beggars cannot be choosers; we cannot then insist that there be any particular number of ever- or never-marrieds—as long as their number is statistically significant, and StatCan never calculates any number that is not.
Let me emphasize, further, that the comparison being made here is not between these highly educated women in their high-earning years and all men, but rather between them and their male counterparts, namely, those of similar age and education. How does one account for the finding that such women earned 9.8 percent more than men on the anti-female discrimination hypothesis?
In any case, if Drache is impressed by sheer numbers, what does he make of the fact, as I reported in my original column, that the earnings of all never-married women were 93.4 percent of all never-married men, and that the women in this category numbered 1,535,000, fully 26.2 percent of the total female labor force?
Drache then takes issue with the fact that our society in effect forces women alone to shoulder the costs of child-rearing and marriage.
In one sense this is simply untrue. Most women with children in Canada are supported by their live-in husbands (79.4 percent in 1988). In another sense, however, it is correct: women’s earnings are lower than men’s because of their family attachments. But this is only part and parcel of the fact that nothing in life is free; goods are scarce, and thus everything has a cost.
This situation is no less fair than that a person who devotes a large part of his life to any one task will be able to accomplish less in alternative pursuits than otherwise. Why Drache would expect this to be different for child-rearing is beyond me.
Note, further, that this objection is based not on the feminist discrimination hypothesis, but on the more correct notion that female wage rates are reduced by family responsibilities. In the very making of this point, Drache undercuts his earlier doubts about the veracity of the statistics.
The real problem for women, as I mentioned, is with our inequitable divorce laws. The courts do not take full cognizance of a wife’s contribution to the marriage, which is often embodied in the husband’s “human capital”; they treat the father’s failure to honor even his inappropriately low child support payments far too leniently. This is not a part of our free-enterprise system, but rather an aspect of government failure.
The bottom line is that women’s financial plight cannot be effectively addressed by a policy predicated on an erroneous explanation of the cause of the pay gap.
If pay “equity” succeeds in driving wages above market productivity levels, it will only exacerbate female unemployment rates—in the same way that, as the Economic Council of Canada and others have noted, minimum wage laws have already created joblessness for teenagers and unskilled workers.
Government-organized day care is a red herring in this discussion, having nothing to do with the real cause of the wage “gap.” But since Drache raises the issue, let me say that I am all in favor of the care of children, but that I regard the parent and the family, not the state, as the best caretaker.
At one time in Canadian history, the family had no trouble taking care of its young, but this was before unwise tax, education, and welfare policies atrophied this form of organization, replacing individual and family reliance with dependency upon the state.
The best way to promote the family is not by further attacks on it, such as substituting state caretakers for parents, but by rescinding those policies which have brought this institution to its present disarray.
_____________________
The Financial Post (Ontario, Canada), March 28, 1991.