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Thursday, July 22, 2010

Not quite the way we teach it in labor economics

Assuming this story is accurate, which in today's world is becoming ever more difficult to justify, it is an interesting insight as to how the current folks think wages are determined:

"Women make up nearly half of all workers on U.S. payrolls, and two-thirds of families with children are headed either by two working parents or by a single parent who works," Biden said.

"Yet, the workplace has, for the most part, not changed to reflect these realities - and it must. Closing the gender pay gap, helping parents keep their jobs while balancing family responsibilities, and increasing workplace flexibility - these are not only women's issues, they are issues of middle class economic security," he said."

This, of course, assumes (without any reason to do so) that men and women are equally productive in every job. Justifying wage increases on the basis of need not productivity/ability is not the way it is taught in most labor economics courses.

More here: White House Backs Bill to Collect Employee Pay Information from Businesses

Memory says that up thru 1970 or so it was pretty common for American businesses to pay married men about 25% more than unmarried men doing comparable work with comparable seniority. No one on earth thought this unreasonable or against economic tenets.
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