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22 June 2006

Explaining Wage Discrimination

Paraphrasing my micro textbook:

So how can we explain arbitrary wage discrimination by employers against women? Consider that an employer who employs only women will have lower labour costs than any employer who employs men. Lower costs means higher profits. And that means that firms that employ a high proportion of women will drive other firms out of the market until there is no discrimination. Therefore unfair wage discrimination cannot exist.

Which is great! If there's no discrimination then all those people who have been fighting for years to equalise wages can all go home.

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