29 Comments
Mar 12, 2023Liked by Cameron Murray

While I agree the “gender pay gap” is misrepresented by averaging across the entire workforce, I think your argument is specious because a substantial fraction of people are not operating in a “household” for a substantial fraction of their lives (and quite frankly it shouldn't matter, nobody is making salary decisions based on whether or not they're in a "household").

Typical (first) marriage age is about 30.

Something like 20% of households are not couples.

Something like 50% of marriages end in divorce.

And while averaging across the whole workforce does make the gender pay gap looks worse than it actually is, it also raises the question of why are low-paying jobs dominated by women, and why even in those industries, are the vast majority of higher-paying roles held by men.

For a personal anecdote, a while back ago my wife received a significant (over $25k) pay rise as a result of a salary review, to bring her salary in-line with the other - all male - members of her team (all of whom received very small, barely-inflation bumps), along with a once-off bonus intended to be back-pay for previous years. She is an Electrical Engineer in her 40s. The (department wide) salary review was instituted by the new, female, department head.

This was certainly not the first time in her ~20 year career a non-trivial pay discrepancy had existed between her and her male peers, but it _was_ the first time it was pro-actively addressed.

I do think that much of the real “gender pay gap” (ie: controlling for similar jobs) would be fixed by legislating wage transparency (ie: force employers to publish job titles and salary ranges, along with anonymised data of what they’re actually paying). The relative unwillingness of women to negotiate salary is well documented.

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Mar 12, 2023·edited Mar 12, 2023Liked by Cameron Murray

The "gender pay gap" is one of those fuzzy political slogans that just keeps getting repeated, irrespective of the facts that you have summarised Cameron, or questions like, "Why would an employer in our mostly competitive private industries, pay men more than women for the same job?" I have yet to hear an answer to that.

However, the low levels of superannuation for older women who have worked at home is an absolute standout welfare issue that needs reforming. People, usually women, who give up work or work part time to stay at home with their kids perform a vital function in our society. However, in doing so they are giving up not only the accumulation of superannuation, but also skills and career progression that would otherwise serve them when they go back to work.

I think a combination of policy responses is important such as facilitating part time work across all occupations, to ensure skills retention and allow some career progression, suitable retraining job seeking assistance and in the instance of divorce, settlements that recognise the contribution that people who raise their kids at home experience and the financial cost to them that this entails.

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Apr 14, 2023Liked by Cameron Murray

The internal dynamics of how household share resources are interesting, although I think that difference in incomes at an individual level still matters. First, and probably most importantly, pooling of resources is very limited in single parent households, with women much more likely to end up as single parents and be exposed to poverty. Although this has made me think that we shouldn't be so concerned about gender-pay gaps but the lack of transfer payments to single parents. Second, the intra-household transfers are not unconditional but are subject to the micro-political environment that determines how resources are pooled within each household.

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Mar 13, 2023Liked by Cameron Murray

Along the same theme, I find it odd that we’re bombarded with the difference between the average male’s superannuation balance versus the average female’s balance.

Surely the focus should be on the combined/household balance?

Furthermore, if/when couples break up isn’t the aim that the total of the assets (proprty, cash, shares, superannuation, &c.) is split equally?

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Mar 13, 2023Liked by Cameron Murray

I see what you’re saying, but while you can value non-market household transactions, isn’t the issue that the provision of household services is (despite their importance) low status work?

Even in these enlightened times, it’s women that tend to be ‘relegated’ to the role of deliverer of household services when children arrive, while the man is free to pursue his work. There are many reasons for this (including preferences, I think). Ultimately though a culture in which women are expected to forego paid work to fulfil these tasks while the man continues should be questioned.

An anecdote: my partner was on and off work for 5 years while she was pregnant with, and looking after, our three girls. When she went back to work, her outwardly highly progressive employer essentially turned a blind eye while a (male) colleague systematically played the system to ensure he ended up with the senior role she’d left. She came back to a highly unfulfilling and physically demanding role teaching mostly beginners (she was an instrumental teacher at a large private school).

A classic case of a business talking the woke talk, but failing miserably to walk the walk.

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Mar 12, 2023Liked by Cameron Murray

Looking at earnings and noticing a gender difference is about as useful as looking at clothing and noticing a gender difference - an interesting reflection of biology and culture, but not of great significance in itself.

If we are going to talk about equality we need to talk about power. Power derives from spending, not earning. I'd love to see a good analysis of spending by age and gender. My best guess is that it would favour females (because I'm yet to meet a real-estate agent who thinks they are selling to men). And it would almost certainly show a shocking skew in favour of the old over the young - contrary to the stereotype of young people spending their disposable income. But while we obsess about earnings, we'll never know.

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Mar 12, 2023Liked by Cameron Murray

Thanks Cameron. An excellent analysis with a different slant, focusing on the pooling of household resources and the spending pay gap.

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Mar 12, 2023Liked by Cameron Murray

Thanks for bringing this issue to our attention Cameron. Unfortunately, these days the gender pay gap is most commonly expressed purely in terms of gender, not equal pay for equal work which is the appropriate basis for comparison. The role of the family in redistributing income and resources, while not applicable to all of us for all of our lives, is an important factor to be aware of, even including transfers after death, which would also tend to go more to women than men.

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My father used to say things like that. 50 years ago.

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Also, you have to understand this whole thing reads as "ladies, don't stress about being paid less, you'll make it back with interest when you settle down with a man and have some kids", surely ?

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Remarkable that you do not consider domestic violence at all. A very incomplete piece of analysis.

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