Google is well-known for attempting at least only to hire the really bright people among us. They’re also finding, as the largest collection of clever people on the planet, that it is somewhat difficult to deal with the gender pay gap problem. This suggests it might not be a simple thing to solve.
Their latest analysis result is not quite what the campaigners desired. Google went out and tried to measure each and every job for comparability. Is this the “same work” or work of equal value? If so, the people doing it should be paid equally. The result of this being that they discovered underpayment of men, a failing that had to be remedied with significant adjustments. Adjustment here meaning more pay for those men, quite contrary to the insistence of the more vocal campaigners — you know, those who keep telling us women are unfairly treated in tech, and the gender pay gap is proof perfect of that simple fact.
There’s a larger point underlying this though, more important than just the giggle at the contrary outcome of a fine-grained analysis. If we do go and perform intensive analysis of this type, we find ourselves in a morass of conflicts. On the one hand, it’s entirely true that women on average are paid less in tech than men are, as is common across the entire economy. On this other hand, when we try to compare like for like as accurately as we can, we find it’s men being underpaid. Perhaps, given the complexity of this, it’s worth considering a slice through the Gordian Knot to a simpler system.
Which would be to retreat back to a simple market system of pay. Our employers have to pay us enough to get us to turn up to work, and that’s that. That amount will differ given the skills we possess and the talents they are looking for. Let the market, that interaction of supply and demand moderated by price, take the strain after that.
Will this lead to a gender pay gap? Quite possibly, but note that all our other attempts to achieve anything do the same. Perhaps the best we can do is simply to leave it to incentives.
As Gary Becker pointed out, and in part gained his Nobel Prize for, discrimination on the grounds of gender or race, which economists call taste discrimination, is costly to the people discriminating. If Google won’t pay market price for female talent for whatever reason, then other people get to hire those skills Google has discarded, to the future disbenefit of Google and its shareholders. In a world desperately short of the talent capable of performing at these high levels, something obvious given the price on offer to those talents, the incentives facing management will be to pay the going rate for talent whatever form, shape, or color of body it is housed in.
Another way of making this same point is that some human problems are really, really, difficult to solve. They’re just too complex for us to be able to plan or structure our way through them. We’ve got to handle them by simply getting the incentives right and then just see what is emergent from their interactions. That is, there are some things too important and too difficult not to use simple markets to solve them.
As progressives find out in every generation, planning, even when done by all the bright people, doesn’t necessarily solve our problems.
Tim Worstall (@worstall) is a contributor to the Washington Examiner‘s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at the Continental Telegraph.
