Government economics

I spent some time in my car yesterday listening to Michael Medved’s segment about the equal pay initiative Hillary, Obama, and other Dems are pushing. Their theory is that women get ghettoized in certain professions that have lower pay than comparable professions that attract men. (Think secretaries versus garbage men.) Medved’s guest was Warren Farrell, author of Why Men Earn More : The Startling Truth Behind the Pay Gap — And What Women Can Do About It. Farrell pointed out the rather obvious main reason behind these career clusters: men go for the money, women go for the lifestyle, with the marketplace determining the value of each job. It’s actually not such a difficult concept when you think about.

In the old days, women had very few employment choices: not only were they a small percentage of the marketplace, they also were not allowed to take physically challenging jobs, but were instead relegated to a few “clean” professions (mostly teaching and secretarial work). Nowadays, women are a huge percentage of the marketplace, they are barred only from those jobs that are totally gender specific (such as the NFL), and, significantly, the only “relegating” arises from their own preferences. Because of that little biological peculiarity called motherhood, women’s preferences tend towards those same “clean,” safe jobs that used to be their only option — especially clean, safe jobs with limited work hours. In other words, they choose to be teachers, librarians, office workers. And because these same jobs are quite popular, given the pleasant work environment (as opposed to, say, a garbage dump or a oil refinery), the marketplace doesn’t need to make them even more attractive by paying huge sums of money. Voila!. Instant wage gap.

The fact that women may have more education doesn’t change that. I know that from my own work in law. We women went to law schools in numbers equal to the men. We went to the fancy, high paying law firms in numbers equal to the men. We got married in numbers equal to the men. And then we did something the men didn’t do: we got pregnant. Suddenly, we wanted out entirely, or we wanted fewer hours, or we wanted a slower paced office or type of practice. Every one of those choices saw a diminution in salary.

These obvious practical realities, which is that women select lower paying jobs because of the intangible benefits that go with them, seem to elude the Harvard and Yale educated geniuses on the Left. They want to use the government bludgeon to interfere in the marketplace and to force businesses to pay predetermined “equal” salaries to “comparable” jobs.  I can’t even begin to imagine how they’re going to figure out what’s comparable: “I’ll see your school teacher and raise her by one garbage man?” I gather that, as far as the startlingly elite Dems are concerned, it’s all about education. A school teacher should earn as much as a garbage man because she has one of those fancy “education” degrees, whereas all he does is roll around in the dirt. Forget about safety, working conditions, hours, etc. She deserves more. She’s a better person because she’s more educated. (Unless, of course, she’s rich and educated, in which case she’s a much worse person.)  Feh!

Aside from the sheer idiocy of this kind of (proposed) elitist government micromanaging, you just know going in that it’s not going to work, because it never works when government starts doing serious market manipulation. In that regard, I read a very timely Gabriel Schoenfeld post at Contentions today:

While we are on the subject of the USSR—Boris Yeltsin’s death was the subject of one of my posts here yesterday—it is a good moment to remember that one of the very best things about the now defunct USSR was its centrally planned economy. If nothing else, it could be counted on to produce an endless series of amusing anecdotes. In the topsy-turvy world of the five-year plan, factory managers and workers were rewarded not for profits but for maximizing other success indicators, like gross physical output, often with bizarre results.

Nikita Khrushchev famously complained about the immense size and weight of chandeliers. It turned out that workers at a Moscow lamp factory were awarded bonuses for production measured in tons. The chandeliers they produced grew ever heavier until they led to a rash of ceiling collapses.

The United States has a market economy—but we also have a huge government sector, where amusing Soviet-style distortions often creep in. Yesterday’s Washington Post reported on the “Metrochek” program in Washington D.C. These transportation vouchers are issued to government employees to encourage use of subways, buses, and trains. But it turns out, unsurprisingly to any student of the old Soviet economy, that a thriving black market has emerged.

Some 300,000 federal employees across the country receive the transportation vouchers, and some unknown number of them are not using them but rather driving to work and reselling the coupons to others, sometimes in the hyper-efficient auction marketplace of ebay (where, as of yesterday, a $100 metrochek was selling for $75).

You can read the rest here.

I don’t have a problem with government intervening to keep an honest marketplace, whether it’s to prevent price fixing, monopolies, or dangerous patent medicines.  I do have a big problem with the government trying its hand at market management, because that seems to be a recipe for economic disaster and out-and-out foolish results.