A few times in recent weeks, I’ve stated that the so-called pay gap between men and women is a myth. Kay Hymowitz had a good essay on that topic last month:
With all factors appearing equal, Uber should be a female workers’ paradise. Yet male Uber drivers still make 7 percent more per hour than female drivers. Half of this gap could be explained by the fact that men choose to drive in more lucrative pay areas and to do so for more hours per week. That second part is consistent with what we already know about a pervasive gender-hours gap: in every country and in most industries, men log more time on the job than women. The reason for the remaining 50 percent of the gap, however, might have come from a list of Google-banned gender stereotypes: men drive faster. The difference in speed isn’t huge—only 2 percent—but it’s enough for men to complete more rides and accumulate more experience. Call it female risk aversion or male bravado; the upshot is that Uber-men are more productive than Uber-women. Ergo, men earn more.
Of course, driving speed is irrelevant to performance at most jobs, and risk-taking is a mixed bag, leading to innovation and big bucks in some cases and havoc in others. Another paper released this winter, by the National Bureau of Economic Research, has much broader implications for women’s earnings. Like the Uber study, it shows the wage gap to be a poor proxy for either sexism or women’s well-being. The authors analyzed the work histories of the Danish population between 1980 and 2013, and found that women’s labor-force participation, work hours, and wages plummeted after the birth of a first child, while men’s continued on the same trajectory. Over the course of their career, women earned 20 percent less than men—if they were mothers. Childless women earned about the same.
That first paragraph, describing the Uber study, is important for Rhode Islanders to think about, in light of the legislation currently working through our General Assembly. Before we give the state government bureaucracy power to analyze every Rhode Island company’s pay practices, we should question whether we believe it is competent to understand things at this level. Imagine a mom-and-pop Uber; will the state really investigate to the point of realizing that its male drivers actually go 2% faster and that makes a world of difference?
Frankly, the way the legislation is currently written, it isn’t clear that this explanation will be satisfactory. As I’ve pointed out, a pay gap won’t be acceptable if it’s “based on or derived from a differential in compensation based on race or color, religion, sex, sexual orientation, gender identity or expression, disability, age, or country of ancestral origin.” If men’s biology leads them to drive faster, then that advantage is “derived from” sex and may not be a good enough reason. Per the legislation, the company would have to give women drivers the same pay as the men, rather than reduce the men’s pay, creating a simple transfer from those who bring in more revenue to those who bring in less.
But don’t get hung up on the driving thing. Remember that this will be a statewide policy applying to every industry… and for every identity group category. How likely is it that the state will investigate — or that every business in the state would be able to articulate — the little differences between people that, on average, produce higher income for one group over another? Tasking government with this project is madness.