Efficient Salary Hypothesis

Ladies, oh ladies. You’re not going to like this one.

There is, it would seem, an itty-bitty gap between what the average male earns and what the average female earns. It’s easy enough to believe that this is because chicks are undervalued, and/or that men are jerks and under-paying broads to assert their jerkiness.

But I care to differ. I think what has happened is that the labour market has become efficient (the first sentence is about 80% of the gist of it).

Read it? Good. So the market ‘knows’ the value of a company and reflects that in the share price. Pretty amazing when you think about it. People yelling and screaming, buying and selling, building faster and faster machines to trade shares in milliseconds, but the market doesn’t care. The share price will be what it wants it to be. A share price can’t be wrong, right?

And so the gender salary gap adjusts itself accordingly. But what is the extra information that the market has its grubby little hands on? Why has the market decided that girls should get less money? What could there be that makes a woman worth less?

Nothing. You idiot. That’s the wrong question. Who let you in here, anyway?

The average woman isn’t worth less. She needs less. (Yes, Jim Jeffries got my mind a wanderin’ down this track.)

It’s the men that are paying for dinner, buying the big cars, buying you dresses so you stop wearing that awful $12 thing you got in Thailand that reminds you of ‘when we used to have fun’.

Let’s do some sums. Average salary: $60k? I’ve got no idea. Average wage gap? Let’s call it 18%. So the ladies be takin’ home somewhere around $6k less after tax per year. End result $120 a week less to the fairer sex. $60 per labia.

Hmm, $120 you say… That sounds suspiciously similar to half the cost of dinner and a movie with a few drinks and a cab ride home.

Are you ready, it’s about to get magical…*

Let us all, together, think of the last 10 dates we went on. Not ‘date night’, don’t be lame. I’m talking about with someone that you don’t share toilet paper with. Now make a mental note of how much you spent on those 10 dates compared to the total cost. You see where I’m going with this? You probably don’t.

This is the extra information that the market has. It has notihng to do with gender. Oh happy days! No, the gap in salary is tied to the gap in paying for things. The market adjusts. I’m gonna copy paste: It has notihng to do with gender.**

When I was fresh out of highschool, there were fellas that didn’t like to get their wallet out when it was their turn to go to the bar. Zero-or-more decades later and guess who’s earning more? Nuffin’ to do with gender.

Show me a woman that sees no reason why the man should pay any more and you’ve got the kind of lady that’s earnin’ like the boys.

Find yourself a lady that believes the man is expected to pay and you’ll find a woman whining about glass ceilings while drinking the glass of wine you just bought her.

If you know a man that thinks it’s the role of the woman to pay well, I’m not even sure what that poor misguided twit could do for a living. Is loneliness a job?

So you see, the market knows. We don’t know how it knows, but it does.


* Oh my god, there really is a need for a question comma

** I even left the typo in so you knew I’d copy pasted.

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