The wage gap between men and women in Brazil: Does it make sense to say that the capitalist puts machismo above profit?

Note from BBT: I’ve mentioned in my recent YouTube videos that I’ve been wanting and have started exploring some topics that I hadn’t really considered over the decade plus that I’ve been posting material on the blog. These topics are not totally and specifically focused on race but can be studied through the lens of race. A few of the topics that I really want to get into are the questions of gender inequality, feminism, the manosphere, relationships and the image of Brazilian women.

Debates over these topics have raged in online spaces such as YouTube for several years now and I wanted to address these topics according to some of the things being said in Brazil. I’ve always been the type of person that seeks to uncover the truth on a given topic even if it goes against what I personally believe. In my view, if you believe or think you know something, you should be willing to challenge that particular viewpoint and be accepting of something that turns out to be true when it debunks what you originally believed.

This happens all the time. In the sciences, we have accepted theories and facts and many of these theories and facts wither away as we come into new information. Over the past few decades, I’ve had to change my opinions on a number of things after becoming aware of other facts and new information. There’s nothing wrong with that. The problem for me would be believing something and one, not accepting new information on the topic or maintaining a wrong position even after becoming aware of new facts that debunk what you previously or continue to believe.

What I have learned after having had heated debates with various people on a number of topics is that you cannot force anyone to believe what you believe in. It’s a waste of time. When this happens, its better and saves you alot of time and stress when you simply present the facts and let the other person or persons do their own research on the topic, change or decide to stay on their square on that specific topic.

I’ve had these sorts of discussions, debates and arguments on topics such as religion, world history, gender issues, political movements, conspiracy vs. conspiracy theory, the entertainment business, the true movers and shakers in the world and a number of other topics. All I can say is that, along my own journey, I’ve come to see that things are often times not as they appear, which makes it necessary for me to examine my own positions on these subjects.

Last week I had a conversation with a colleague who is about 20 years my senior. Our discussion first centered a hot topic these days concerning a black male athlete who has been the subject of controversy for a few weeks now. After I shared my opinion on the topic, the discussion went in another direction although somewhat related to the topic that we discussed. When this colleague began to ask my views on certain topics, I first told him that I don’t like to really discuss certain topics because my views often goes against popular opinion, which in turn leads to disagreements, heated arguments and sometimes, the end of relationships and friendships.

I told said colleague that I would share my opinion on the particular topic that he brought up, but only if he would listen with an open mind as my thoughts could go against what he believed. After all, I wasnt trying to change his opinion, but rather offer mine, as well as the sources for him to analyze and come to his own conclusion.

This is the same way I want to introduce today’s topic. In a recent video, you could say that I introduced this topic by discussing a question that Brazilians were asking a few years ago: Why does a top male Brazilian soccer player such as Neymar earn so much more money than a top Brazilian female soccer player such as Marta? In a left-leaning world in which we live, we would be led to believe that such differences are due to sexism, but is this simple response really sufficient to answer the question or are there other factors that we must consider?

Let’s expand the debate beyond Neymar and Marta and look at the differences of salary for men and women as a whole and see what the research tells us.

The article below is taken from website for Instituto Mises Brasil, a Brazilian libertarian think tank that focuses on “the production and dissemination of economic and social science studies that promote free market principles and a free society.”

The wage gap between men and women in Brazil

Does it make sense to say that the capitalist puts machismo above profit?

By Leandro Narloch

Editor’s note: the following article was originally published in May 2015. Since the subject has resurfaced and is being debated with much more emotion than with reason and logic, it is worth revisiting.

For one simple reason, I have always been suspicious of the wage gap statistic.

If women in fact earned less than men to perform the same tasks, profit-seeking companies would only hire women. When faced with two candidates with the same potential, the employer would, of course, hire the cheaper one.

But what happens is the opposite: men are still the majority of employees in Brazil.

So, either business owners are fools, and put machismo above profit, or the statistic is flawed.

A new study by the Fundação de Economia e Estatística, meaning the Economics and Statistics Foundation, of the government of Rio Grande do Sul, confirmed this suspicion. Economists Guilherme Stein and Vanessa Sulzbach analyzed 100,000 salaries and concluded that Brazilian women earn 20% less than men – but only 7% cannot be explained by the difference in productivity.

The research infuriated feminists from Rio Grande do Sul, who wrote articles and “big texts” on Facebook accusing the authors of machismo and asked for the dismissal of the Foundation’s directors.

In response, dozens of economists signed a manifesto defending the researchers. “We were surprised by such a strong reaction to a study that has been replicated so many times,” economist Guilherme Stein told me.

The study’s conclusion converges with data from Harvard economist Claudia Goldin, the leading expert on the wage gap. For the United States, Goldin found a slightly smaller percentage (5%) that is not explained by productivity.

According to the Rio Grande do Sul researchers, there are mainly two factors pulling women’s wages up, but there are three others that push them down. See the table.

20150429tabela_recortehem1.png

Women have more years of education on average and start working later. However, they interrupt their careers more often, have a slightly shorter working day than men, and tend to be concentrated in occupations that pay less.

Of the 20% wage gap, 13 are explained by these reasons. In other words: if men and women worked the same hours and had the same profile, women would still earn 7% less. How to explain this difference?

It may be prejudice and discrimination on the part of employers, or some other factor not yet revealed. What can be said is that the machismo of employers decreases women’s wages by 7% at most.

The research does not contradict feminist flags, on the contrary. “The data suggest that the wage gap would narrow if men shared household chores with women,” says Stein.

IMB supplement

In a labor market with freedom of hiring and firing, it is impossible to have wage differences between men and women as a result of discrimination alone.

And this is for a purely economic reason: if there were such discrimination, any employer would make easy profits by hiring women and laying off men, since women could be paid less for doing exactly the same job. Competition among employers would then raise women’s wages and thus abolish any wage gap that might exist.

So whenever and wherever there is any kind of wage discrimination – and this goes not only for gender, but also for skin color, religion, ethnicity, etc. – capitalism will abolish wage discrimination. – capitalism will abolish such a situation, not deepen it. And the essential reason is that an employer who allows his prejudices to cloud his value judgment will thereby be creating a profit opportunity for his competitors.

A woman who produces $75,000 a year in revenue for her employer, but who is paid, say, $20,000 less than an equally productive male employee, might be hired by a competitor for, say, $10,000 more than she is now paid and still allow this new employer to pocket the $10,000 difference.

As this competitive process deepens it will, after all, raise female wages to the point of parity with male wages if wage competition is vigorous enough.

But there are other indelible factors in this issue of wage divergence between men and women. For example, as already said, in general terms, women are more likely than men to leave the labor force for a period of time – because of pregnancy, child rearing and raising, and other tasks (which most men shy away from).

Women are much more likely than men to take time off work for a period of time (years) to devote to their family. And even if they do not do this, they tend to spend much more time than men on childcare and housework. Consequently, they lag behind their male counterparts in terms of capital accumulation, productivity, and wages.

However, much more explosive explanations of the wage gap can be found in the book by Professor James T. Bennett, of George Mason University’s economics department, entitled The Politics of American Feminism: Gender Conflict in Contemporary Society.

In this book, Professor Bennett lists over twenty reasons why men earn more than women. Cumulatively, such explanations completely answer the existence of any “wage disparity,” although Bennett himself believes that wage discrimination by gender is not something non-existent.

The reasons, based on generalizations backed up by voluminous statistics, are:

• Men are more interested in technology and natural sciences than women.

• Men are more likely to take dangerous jobs, and such jobs pay more than more comfortable and secure jobs.

• Men are more willing to be exposed to inclement climates in their work, and are compensated for this (“compensating differences” in economic parlance).

• Men tend to accept more stressful jobs that do not follow the typical eight-hour routine of working conventional hours.

• Many women prefer personal job satisfaction (child and elder care professions, for example) to higher wages.

• Men generally like to take more risks than women. Higher risks lead to higher rewards.

• More atypical working hours pay more, and men are more likely than women to accept working such hours.

• Hazardous jobs (charcoal mining) pay more and are dominated by men.

• Men tend to “upgrade” their job qualifications more often than women.

• Men are more likely to work longer hours, which increases the wage gap.

• Women tend to have more “interruptions” in their careers, mainly because of pregnancy, child rearing, and raising children. And less experience means lower wages.

• Women are nine times more likely than men to leave work for “family reasons. Less length of service leads to lower wages.

• Men work more weeks per year than women.

• Men have half the absenteeism rate of women.

• Men are more willing to put up with long daily commutes to work.

• Men are more likely to transfer to undesirable locations in exchange for jobs that pay more.

• Men are more likely to accept jobs that require constant travel.

• In the corporate world, men are more likely to choose higher paying areas such as finance and sales, while women are more prevalent in lower paying areas such as human resources and public relations.

• When men and women hold the same position, male responsibilities tend to be greater.

• Men are more likely to work on commission; women are more likely to seek jobs that give more stability. The former presents greater earning potentials.

• Women place greater value on flexibility, a more humane work environment, and having more time for children and family.

Therefore, feminist movements genuinely interested in understanding the wage issue should pay more attention to these determinants and focus less on quixotic crusades like “diversity and equality” legislation that demonize male employees and male bosses.

The suggestion that sexual attributes are used in choosing an employee, or that they are determinants of the paycheck, says nothing about the sexual tastes of the employer. It speaks only about scarcity. Why? Employers have no way of knowing what an employee’s productivity is before he or she is hired. The productivity of this employee may not be readily apparent after he or she is hired. Additionally, the testing and adjustment period is costly; it also consumes company resources in the form of monitoring, supervision and materials. And employers have an incentive to save all these costs.

Therefore, a hiring cannot be something that is driven solely by the gender of the individual. Various other possible attributes and possible future occurrences have to be considered by the employer.

However, economic logic is usually suppressed by politically correct groups who find it much easier and more productive to simply vilify those who try to explain that there are economically rational reasons for the existence of any wage differentials between men and women.

Source: Mises