BOOKS

by Alfred A. Hunter and Margaret A. Denton

Walter Block and Michael walker, respectively Senior Economist and Director of the Fraser Institute, have a problem. Despite their efforts to persuade people to the contrary through radio and television interviews, articles in news-papers and Fraser Institute publications (e.g., Block and Walker, 1982; Block and Walker, 1985), many well-informed people persist in the belief that women experience employment and wage discrimination in the private sector.

Not so, these two economists have consistently and repeatedly argued. Such a conclusion does not follow from neoclassical economic theory, from which it can be deduced that employers who would discriminate against women would not long survive in a competitive market. At the same time, in the public sector, where the requirement for profit does not exist, the same economic principles do not apply, and women would be at a disadvantage relative to men in competing for positions and pay. Consequently, equal pay legislation and other such initiatives, if they have any place at all, need be considered only in the public sector government- owned corporations.

So, how is it that so many people believe that there is economic discrimination against women in the private sector? Block and Walker's answer: a "strong egalitarian philosophy" coupled with an "unsatisfactory economic analysis" (Block and Walker, 1985:85), as exemplified in the research conducted as part of the Report of the Commission of inquiry on Equality in Employment (Abella, 1985).

And what is it that people are actually looking at when they think they see evidence of gender discrimination in the private sector labor market? Block and Walker's answer: that marriage confers advantages upon men and disadvantages upon women, such that men have better career opportunities and related economic benefits than women. Married men rarely shoulder their share of the burdens of housework and child care; and married woman almost always shoulder more than their share of the domestic labor. As a result, married men are at an advantage relative to unmarried men in their careers, whereas married women are at a disadvantage relative to their unmarried counterparts. This is shown, they conclude, when the earnings of married and unmarried men and women are compared.

What is true is that there is an unequal division of domestic labor between men and women, that (in a simple comparison) married men earn, on the average, more than unmarried men, and that (again, in a simple comparison) unmarried women earn more than married women. What is not true is that the unequal division of domestic labor between men and women explains the gender earnings gap.

What appears largely to account for the male-female differential in earnings is that private sector employers pay women less than men for the skills and other qualifications which they bring to the job. First, men and women in the private sector tend to be segregated in different occupational categories which, although they do not differ very much in their average skill requirements, pay very different wages. Second, men and women in the private sector in similar occupational categories receive different economic returns on education, job experience and other earnings-related attributes. Finally, although these processes operate in the public sector too, they are much less pronounced there. And they are less pronounced in that part of the private sector populated by a small number of large national and multinational companies than they are in that part made up of many smaller companies in highly competitive markets. These findings have been documented in detail in the literature (e.g., Denton, 1984).

Where, then, do Block and Walker go wrong? One place is in an unsatisfactory economic analysis. Briefly, they almost always illustrate their conclusions using the Census of Canada and other data from Statistics Canada which simply compare married and unmarried men and women, without taking into account that married and unmarried people differ from one another in many aspects (e.g., age, education, employment experience) other than just their marital status. When these other differences are taken into account, married women who work outside the home do not earn less on the average than unmarried women who are employed and this despite the unequal division of domestic labor.