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One of the most frightening developments in the run-up to the 2020 presidential election is the Democratic flirtation with socialist ideals. One recent manifestation of this unfortunate trend is the recent proposal from Senator Kamala Harris (CA) to have a vast government takeover of employment markets in the name of gender equity. In an age in which the phrase “diversity and inclusion” is on the lips of every business and university, she announces, without a shred of evidence, her deep conviction that labor markets consistently and systematically discriminate against women by failing to offer them equal wages for equal work. Her purpose is to hold “corporations accountable for pay inequality in America.” How? Through “the most aggressive equal pay proposal in history.”
The proposal goes downhill from there. The first question that one has to ask is why competitive labor markets need any form of wage regulation to protect women in the first place. Sure, there are thousands of large corporations in America, but they are in constant competition with each other, along with every small firm in the market, to hire the best talent they can find. Harris starts out with misleading statistics that lament that women only earn 80 percent of what men earn, and then waxes even more indignant that the ratios are even worse for Latina women (53 percent), Native American women (58 percent), and African American women (61 percent). Clearly, any effort to accurately explain these outcomes requires an accounting, as she acknowledges in the fine print, for education, hours worked, job classification, years of experience, parental leave, and many more factors. Accounting for some of these factors—many others are hard to identify, observe, and measure—reduces that gap to around 6 percent at most.More