It is no secret that women, on average, earn less money than men. Official US Department of Labour statistics reveal that the median national weekly earnings of full-time female employees are currently approximately 20% less than their male counterparts (US Bureau of Labour Statistics, 2017). In fact, “79 cents to the dollar” – the claim that women, on average, earn 21% less than men – has been a consistent and defining cry of women’s groups and social advocates for over a generation. The topic forms the basis of Samantha Webb’s exploration of income inequality in The Gender Pay Gap Problem (2017). Webb’s article raises typical issues of discrimination and labour market bias; however, it also acknowledges that such discrimination models do
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Taste-based discrimination occurs when individuals in the labour market are valued or penalised for non-productivity related characteristics, such as race, sex, or religion. Thus, individuals may have a “taste for discrimination” whereby hiring, working, or dealing with others with “unpreferred” qualities has an associated disamenity cost, d. This disamenity cost raises the unpreferred worker’s wages above the market wage, w, to w + d, and makes them more expensive to employ. Under such circumstances employers will only willing to hire workers from unpreferred groups when their wages wu account for the associated disamenity cost and wu ≤ w - d. As long as unpreferred workers have to work for discriminatory employers (employers for whom d > 0, and wu < w), their wages will be lower than the market wage. Thus, in accordance with taste-based theories of discrimination, a preference for men in the labour market will depress female wages. Profiling, or statistical discrimination, forecasts a similar outcome. Based on stereotypes and the knowledge of the unpreferred group’s average behaviours, statistical discrimination allows for inequality to persist even when individuals are rational and non-prejudiced. Statistical discrimination presents an additional dimension for understanding the gender wage gap: women, in that they are more likely to be primary caregivers (Webb, 2017), are more prone to career interruptions and less likely to honour workplace commitments than men (Schneebaum, 2013). Therefore, even women who do not intend to fulfil any such caregiver roles may suffer as employers looking to make long-term hiring decisions will be more hesitant to hire
Taste-based discrimination occurs when individuals in the labour market are valued or penalised for non-productivity related characteristics, such as race, sex, or religion. Thus, individuals may have a “taste for discrimination” whereby hiring, working, or dealing with others with “unpreferred” qualities has an associated disamenity cost, d. This disamenity cost raises the unpreferred worker’s wages above the market wage, w, to w + d, and makes them more expensive to employ. Under such circumstances employers will only willing to hire workers from unpreferred groups when their wages wu account for the associated disamenity cost and wu ≤ w - d. As long as unpreferred workers have to work for discriminatory employers (employers for whom d > 0, and wu < w), their wages will be lower than the market wage. Thus, in accordance with taste-based theories of discrimination, a preference for men in the labour market will depress female wages. Profiling, or statistical discrimination, forecasts a similar outcome. Based on stereotypes and the knowledge of the unpreferred group’s average behaviours, statistical discrimination allows for inequality to persist even when individuals are rational and non-prejudiced. Statistical discrimination presents an additional dimension for understanding the gender wage gap: women, in that they are more likely to be primary caregivers (Webb, 2017), are more prone to career interruptions and less likely to honour workplace commitments than men (Schneebaum, 2013). Therefore, even women who do not intend to fulfil any such caregiver roles may suffer as employers looking to make long-term hiring decisions will be more hesitant to hire