Academic journal article The Review of Social and Economic Issues

The Cost of Being Female: Rejoinder to Sayers

Academic journal article The Review of Social and Economic Issues

The Cost of Being Female: Rejoinder to Sayers

Article excerpt


Numerous economists take the position that wages are determined by discounted marginal revenue productivity (Block, 1990). Sayers (2012) takes issue with the views of one of them, Block,2 in this regard. The present paper is devoted to defending the analysis of many dismal scientists on this issue, in general, and as concerns my own perspective in particular.

Certainly, Sayers (2012) is correct when she asserts that "achieving a complete understanding of the income discrepancy, ... (between males and females is) of critical importance." Opponents of the free enterprise system aver that capitalism is inherently unfair, and sexist. This is an unjust criticism that should be laid to rest; it can be done by understanding precisely how and why this income disparity has come into being, and continues to prevail.

It is a basic axiom of economics that wages tend to equal productivity. If the former is greater than the latter, losses ensue. If the firm must pay $15 per hour to an employee who produces only $10, it will lose $5 on an hourly basis, and cannot long endure. On the other hand, if the employee with a productivity level of $10 is remunerated by the company at the level of only $7, this, too, cannot last. That $3 profit will serve as a beacon for competitors. Some other company will bid $7.01, earning a profit offthis worker of $2.99; and another will offer $7.02, $7.03, etc., bidding up the compensation until it reaches, in equilibrium, the $10 that the employee can offer with no profit earnings.3 Or, the worker will tend to quit, and earn a higher salary elsewhere.

In bygone years, when most jobs required brute strength,4 we can safely assume that male productivity was higher than female. And, since productivity levels and wages are always joined at the hip, it would be no surprise to find out that men earned more than women in those epochs. But, nowadays, these jobs are a decreasing proportion of total employment, and have been mechanized to a great extent in any case. Therefore, one would expect an exceedingly small wage gap between the genders. This has not occurred. Why not?

I do not unwittingly want to give the impression of defending the economic status quo. I am omitting a discussion on the impact of the current economic environment on labor markets and wage differentials since this would take me far too far afield. I fully acknowledge that at present, labor markets are far from being free. Instead, they are heavily hampered by government intervention.

In section II, I discuss the marital asymmetry hypothesis (MAH); section III is given over to an analysis of Sayers' critique of this hypothesis (MAH); the burden of section IV is to consider some alternative explanations of the male female pay gap. Section V deals with economic logic, section VI with an invincible dogma and we conclude in section VII.


The MAH is predicated upon the economic concept of alternative or opportunity costs. Whenever someone does something, anything, it is always at the cost of doing something else, the next best opportunity foregone, or, doing it as well. It is no accident that Michael Phelps is not a world class chemist. In order to achieve that status, one must work in the lab all the live long day. But, Phelps spends an inordinate amount of time in the pool, instead. In like manner, Usain Bolt is not an accomplished cellist. In order to do so, one must saw away at this instrument for many hours. But, this world class sprinter practices on the track too often to leave room for any such activity.

In like manner, married women perform the lion's share of household activities: cooking, cleaning, diapering, breast feeding, shopping, ironing, dusting, etc.5 Assuming they would otherwise be equally accomplished in marketplace activities as men, this alone could account for a substantial part of the wage gap between the genders. …

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