No, reducing gender inequality doesn’t make income inequality worse.

When I was a teenager, the political right would argue that working women caused inflation and unemployment. They said women in work put men out of jobs, while rising household incomes led to rising prices so that no one was better off. 

Having mostly seen off that bigotry a few decades ago, the right has now come up with a new way to bash working women: According to an article in the Economist, we cause income inequality.

The Economist argues a root cause of growing inequality is 'assortative mating’. (So romantic. On Valentines Day, you can send your mate a card: "Roses are red, violets are blue. Assortative mating is a thing we should do." The term is a fancy way of saying people find partners they have something in common with. I hope someone got a grant for coming up with the name.)

"A woman with a graduate degree whose husband dropped out of high school in 1960 could still enjoy household income 40% above the national average; by 2005, such a couple would earn 8% below it. In 1960 a household composed of two people with graduate degrees earned 76% above the average; by 2005, they earned 119% more. Women have far more choices than before, and that is one reason why inequality will be hard to reverse."

The argument strikes me as instantly fishy. 

The victims of inequality are much more likely to be women. A recent UN study warns that poverty reduction could be reversed if more isn’t done about inequality.  "Around the world, different groups are marginalised and discriminated against, but discrimination against women is universal. ...there is no country in the world where women have equal economic and political power to men.”

Yet the Economist is suggesting improving the incomes of women worsens inequality. That can't be right.

Actually, we know the causes of inequality. Inequality grows when technology changes quickly and when unions and employment protections are weak. According to an OECD study "A more equitable distribution of educational opportunities also contributes to a more equitable distribution of labour income."

Income inequality is lower when temporary and permanent workers enjoy similar protection (note this, everyone who criticised me for saying casual workers particularly need protection.)

Immigrants tend to earn less even when they are as well educated.

And this: "Women’s labour income is considerably lower than that of men. Much, but not all of the income gap is due to women’s shorter working hours, which in past OECD work have been found to reflect in part taxation issues and the lack of affordable childcare."

The cause of inequality then, is an unfair tax system and wages that aren't high enough for working people to provide for their families. It's not ‘assortative mating’. It's not a pair of dentists or lawyers getting together. In fact, inequality is worsening because working people's wages as a share of GDP overall is falling, while fewer and fewer people own incredibly large shares of the wealth.

As Paul Krugman says, "It is not just that the rich have pulled away from the [rest]. It is that the richer you are, the more you have pulled away."

There is nothing inevitable about massive and growing inequality, and it isn't getting worse because some women are doing better. All the Economist shows is that working people have been, umm, assortatively mated over.


Comments (6)

by stuart munro on February 14, 2014
stuart munro

I recommend Robert Reich's documentary Inequality For All. It turns out that higher top tax rates correlate negatively with inequality. So easy to fix.

by Josie Pagani on February 14, 2014
Josie Pagani

I've been looking for that doco Stuart! It premiered in the US when I was there last year. Is it on video yet?

by stuart munro on February 14, 2014
stuart munro

The DVD went on sale January 7th. Amazon has it.

by Andrew Osborn on February 15, 2014
Andrew Osborn

Josie

Until you get a real job - make me some eggs!

 

by Josie Pagani on February 15, 2014
Josie Pagani

Andrew

Make-your-own-eggs!

by Andrew Osborn on February 16, 2014
Andrew Osborn

:-)  Fair enough!

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