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The Dangers of the “Equal Pay” Canard
In the newest installment of my weekly column for the Hoover Institution’s Defining Ideas, I take issue with the White House’s relentless insistence that there is a crisis in America of institutionalized employment discrimination against women, a claim that can’t stand up to even basic scrutiny:
Labor markets are intensely competitive, so the claim about systematic pay gaps has to assume both that women managers are hostile to women’s economic welfare, and that competitive markets are massively inefficient in matching people with positions. Competition for labor tends to lead to efficient outcomes. Indeed, by the standard account, price discrimination cannot survive in competitive markets, which means that the differentials in wages track differences in performance. Put simply, one danger of the Equal Pay Act is that it could mandate equal wages for unequal work, i.e. for two workers with different productivity.
