It seems to be conventional wisdom that women make less than men doing the same job. But how true is this? If men made a dollar for every woman that made 77 cents, why would any executive hire a man? Is gender discrimination really worth 23% of labor costs? There really must be more to it.

With regards to a proposed bill going through Congress mandating “fair” wages across genders, I stumbled upon this opinion piece in the NY Times:

…for proof, proponents point out that for every dollar men earn, women earn just 77 cents.

But that wage gap isn’t necessarily the result of discrimination. On the contrary, there are lots of other reasons men might earn more than women, including differences in education, experience and job tenure.

When these factors are taken into account the gap narrows considerably — in some studies, to the point of vanishing. A recent survey found that young, childless, single urban women earn 8 percent more than their male counterparts, mostly because more of them earn college degrees.

I think there’s a lot to be said for that. Women, for better or for worse, simply tend to go into professions that aren’t as well-paying. This is not a stereotype, this is true.

Universities, for example, typically pay professors in their business schools more than they pay those in the school of social work, citing market forces as the justification.

What are the market forces? If you’re a business professor you probably have some credentials that will make you a lot of money elsewhere. This is called a high opportunity cost by economists. Contrast this with those with high credentials in social work or even English professors. What is there opportunity cost? Do the universities really need to pay them high salaries to woo them into academia? Not really. What can someone with a phd in English do except teach? Not much. Women tend to go into these areas that naturally pay lower.

One could argue that each gender going disproportionately into different fields reflects sexism in society. But I don’t think some law will correct this; it will more likely create headaches for business people and superfluous litigation.

Could a wage disparity exist between men and women? Could there be a glass ceiling of sorts? I’m not denying it. I just think it’s exaggerated, even if only a little.