Gender pay report just nonsense

A new report into gender pay in Australia has revealed some big gaps in salaries.

Professor Claudia Goldin was awarded the Nobel Prize in Economics last year. In contrast with normal practice, she didn’t share this award with other economists.

Her primary interest is the gender pay gap, something she has worked on for many years. Her conclusion is important: the gender pay gap is overwhelmingly the result of the existence of “greedy jobs”, high-paid jobs that require long and unpredictable hours and often extensive travel.

Women are much less likely to take these jobs, notwithstanding the pay premium attached to them. The gender pay gap is not about systemic discrimination.

If Goldin were a climate scientist, commentators would simply declare that the issue is settled. But because the gender pay gap is a core shibboleth of feminists and the left, the issue continues to be debated.

How can the gap be reduced? Don’t companies realise they are missing out by paying women less? Companies must be named and shamed for paying women workers less.

This is the misguided reasoning underpinning the government’s insistence, executed through the Orwellian-sounding Workplace Gender Equality Agency (WGEA). Australia’s largest companies have been forced to release information on the median earnings of their male and female workers, thereby constructing a crude and meaningless ratio.

Let’s be clear here: it is illegal – and has been for many decades – to pay men and women undertaking the same jobs differently. If this were to occur, particularly in large companies, the matter would be litigated before the sun sets.

The reality is that women and men don’t do the same jobs. They don’t put in the same hours. When all the factors that affect earnings are taken into account – age, education, qualifications, occupation, job tenure, hours of work – there is very little left by way of gap. And it’s all at the top end.

It’s also noteworthy that in the Nordic countries, with their extremely generous paid parental leave entitlements and other pro-women regulations, a gender pay gap still persists. It turns out the women from these countries are also reluctant to take on these “greedy jobs”.

Of course, it may be possible for some of these “greedy jobs” to be redesigned, but only up to a point. They are generally jobs that need to be done 24/7 and are dictated by the needs of the paying customer. Some are extremely high pressure – think the traders in investment banks – and this doesn’t suit most people. Some are in healthcare.

If we look at the WGEA data, it doesn’t really tell us anything, even though the collection of the figures involves considerable compliance costs for the companies, which are in turn borne by shareholders and customers.

For what it’s worth – and it isn’t really worth anything – of the 5000-odd companies in the private sector with more than 100 employees, women earn at least 50 per cent less than men in 37 of them. In another 107, women earn between 40 and 50 per cent less. Some industries have higher gender pay gaps than others – it’s generally bigger in construction, mining and finance.

Are ordinary folk, concerned about cost-of-living pressures, any better off by knowing these throwaway facts? And let’s face it, many families decide on their working arrangements together, to do what is best for the children, in particular. In these cases, two “big” jobs in a family is a bridge too far.

When this sort of pay transparency intervention was introduced in the US, a number of companies simply reduced that rate of increase in the pay of their male workers – at least for a while. It’s not clear that the women were made any better off.

If there were really a comparative advantage for companies in paying women more, it would happen of its own accord, without the meddling of a bossy, naive government agency. This WGEA report is basically nonsense.