The "cost of production" theory of wages and the gender gap

There have been some comments to my post, college is for girls, about how, when women enter a profession, such as pharmacy, wages for that profession go down.

This theory is consistent with the cost of production theory of wages, which states that it's not scarcity of workers which determines wages, but rather how much it costs to sustain the worker. This is similar to how commodities are priced: there is an infinite supply of a commodity available at a small profit margin over the cost of producing the commodity.

Women have a lower cost of production compared to men because men need to be the primary breadwinner of the family, and the single man has to pay for dates, and I have also have theorized that women are more likely to receive support from their parents because parents expect their sons to go out and earn their keep. In other words, society has set things up so that men need more money than women.

Because of the lower cost of production of female workers, when a profession is mostly composed of women the wages are lower.

This phenomenon was also described by the Rolling Stones:

You can't always get what you want
You can't always get what you want
You can't always get what you want
But if you try sometimes you just might find
You just might find
You get what you need

Comments

[superdestroyer]

I would argue that when women are numerous in a career field, there are generally more job openings than in a field dominated with men. Since women move in and out of the job market, the natural "friction" causes their to me more job openings.

[spungen]

"... Sometimes, you just might find, you get what you need." Now, there's a motivating social contract.

I think you have it backwards. In pharmacy, for example, remuneration went down *first*, mainly because of chain stores, therefore it became less attractive to men, *then* women were able to join in higher numbers. Kind of like bank tellers.

Generally, if a profession or business is lucrative and/or prestigious, men and elites will fight to control it. Only when they become less interested is there room for others. It's the same reason women dominate the student body at colleges I've never heard of. To put it bluntly, we get the leftovers.

I find it hard to believe that any significant percentage of women over 23 is happily accepting lower wages because they have parental support and/or male support. You must know that the world you're describing is a tiny elite, not the modern rule. I don't know how old you are, but how many of your male peers a) even have kids and b) have stay-at-home wives who care for them? A minority, I'll bet, and it's probably the upper-class ones. As for dating, well, I can believe in Manhattan there are lots of generous playboy types like yourself who drop big bucks on seduction. But, it also costs a lot for a woman to keep herself looking up to that standard. Priced blond highlights lately?

If your theory were true, then well-off guys who have trust funds or other parental support wouldn't be dominating the highly-paid professions, like on Wall Street. And, there wouldn't be well-paid jobs that are dominated by attractive young women, like pharmasluttical sales.

[The Superfluous Man]

I remember reading in the Wealth of Nations how a servant working a second job would often get less wages than if it were his primary job. Can't find it now. But you should get some actual empirical evidence.

[michael vassar]

This used to be called the Iron Law of Wages. It was essentially true prior to the industrial revolution, e.g. under Malthusian conditions, but isn't true today.

[Half Sigma]

michael vassar, as usual you have all the answers.

And what a shame, I thought I had a unique idea, but this was already discovered 150 years ago. From Wikipedia:

The Iron Law of Wages was an alleged law of economics that asserted that wages will tend towards and reach the subsistence level due to market forces. The alleged law was named and popularized by the German socialist Ferdinand Lassalle in the mid 1800s.

According to Lassalle, wages cannot fall below subsistence level because without subsistence laborers will be unable to work for long. However, competition among laborers for employment will drive wages down to this minimal level.

[Brandon Berg]

Right. The Iron Law of Wages holds only when wages are so low that members of the labor force actually start dying, because this serves as a constraint on the supply of labor. Beyond that, there's no reason to expect cost of living to have any effect on wages. If you haven't already read it, look up my "Iron Law of Benefits" post at Catallarchy.

[superdestroyer]

HS,

Actually the wages for Pharmacist is going up because there is a shortage of them. The pharmarcist realized, like the engineers, that the easiest way to make wages go up is to limit the supply. Thus, a doctorate is now required and for many jobs, a residency is required. Thus a pharmacist can easily make well over $1ooK. Pharmacist have also arranged they law that a pharmacist is needed for a pharmacy to be open. Thus, there is no real substitution for pharmacist.

I believe that the reason that pharmacy is 70% women is the same reason that most university students are women. It takes many years and forwarding thinking to become a pharmacist. This seems to lend itself to what women are going these days.

Also, it is probably easier (from an effort point of view) to get a degree in economics from Duke than a Pharmacy degree from any of the directional state universities that have a pharmacy program. It is just harder to get admitted to Duke.

[spungen]

SuperD, I had heard pharmacy was much less lucrative nowadays because of all the chains preventing independent pharmacists from running their own shops. If the opposite is true, and women are indeed 70-percent of this six-figure career, that is good news. It is hard for me to believe, though, given how society tends to work.

HS, economics must be a total sausage-fest. There is no other explanation for why you aren't flamed to a crisp by now for suggesting, in this day and age, that women earn less money because we *need* less than men. I saw an "Alice" rerun where Mel tried this argument to justify paying Alice, Flo, and Vera less than a male waiter. He said it was because men had families to support, even though Alice was a single mother. He got his comeuppance.

[Half Sigma]

spungen, I wrote that "society has set things up so that men need more money than women." I have no control over what society does and doesn't do. I'm just an observer.

[michael vassar]

No, the claims about pharmacy salaries, restricted supply and artificial demand are all correct.

[spungen]

My point is that I see no basis for your observation that men need more money to subsist than women in this society, or for your theory that this alleged greater need causes the pay gap.

The National Women's Law Center has some wage gap statistics here:

I'm sure you've heard before that women working full-time make 72 cents for every dollar made by full-time male workers. How many guys spend 28 percent of their income paying for dates with women?

Black women only earn 65 cents for every dollar white men earn. Do black women have lower subsistence costs than white women?

Regarding lawyers: "A 1993 study of graduates of the University of Michigan Law School revealed significant wage differentials between male and female lawyers after 15 years of practice, even when hours of work, family responsibilities and other variables were held constant."

In 1999, women physicians earned 62.5% of the median weekly wages of male physicians. A/t your theory, single male doctors must be very lavish daters, to justify such a discrepancy. Or, women doctors must have parents who absolutely spoil them rotten.

I read on your blog recently that most people won't get an inheritance, or won't get much. Seems unlikely, then, that parental support is making up an extra 28 cents on the dollar for women.

[Peter]

economics must be a total sausage-fest

While pharmacy is a fish taco festival :)
But seriously, a likely explanation for the high percentage of women in pharmacy is that the job is particularly suitable for women with children, compared to many other professional-level jobs: the hours are predictable; nonstandard working hours may be available (the pharmacist works evenings and weekends when her husband is home to watch the children); it doesn't require overnight travel; and the decentralized nature of jobs lessens the need for long commuting.

[Dennis Mangan]

Hope this isn't off topic, but I work in a field, healthcare, that has lots of women. In fact in my current job, I'm surprised at how few men work there given that decent wages are paid for this area and so on. I think that the field is perceived as "pink collar"; it's seen as not something a man does. Conversely, it's clean, not physically demanding, indoors, etc., which is why women are attracted to it in the first place. You don't see too many women paving roads or as linemen. I guess I'm saying that a sort of "sexual selection" is going on.