The Magical World of “Wage Gap” Myths

In America, you can sue people for a lot of reasons. But you can’t sue the law of supply and demand. At least, not effectively.

Of course, silly old facts aren’t known for getting in the way of compelling cultural narratives.

Enter soccer star Megan Rapinoe, who announced at the White House this week that she is suing her employer, the US Women’s National Soccer Team, for “equal pay.” She told the world she had been “disrespected and dismissed” because she is a woman.

Given the response this statement received online, I imagine many people heard this and thought, “Oh no! Why wouldn’t we pay women equally? Good for her.”

To be fair, the idea sounds nice. The US Women’s team is successful. They win lots of championships. They’re great athletes.

The reality, though, is that the intersection of the supply of your skills and the demand for your skills is the primary force that determines your earnings.

Politicians try to manipulate this with controls like minimum wage laws to assist low earners and punitive measures like taxes for high earners. Still, the rule holds true.

You can be the most gifted basket weaver in the world, but if nobody wants to buy baskets, there’s not much money to be made for you.

The same applies in sports. The millions of dollars earned by superstars like Tom Brady and Lebron James comes from fans. Fans who watch games and generate ad revenue, fans who wear team merch, fans who buy tickets to games.

If female athletes want equal pay, they must generate equal demand. Take your revenue problems up with the millions of fans that change the channel when your team is on… not the employer signing the checks.

Unfortunately, this pay-gap narrative has spun so far out of control, I’m doubtful a conversation about market forces will happen anytime soon. Media campaigns are better at tugging the heartstrings, facts be darned.

You probably saw some absurd “Equal Pay Day” memes circulating this week, like this one from President Biden’s Instagram page.

Of course, these “statistics” conveniently fail to account for time taken off work by women to raise children: one of the most noble and important jobs on the planet.

They also don’t account for the fact that women consistently ask for less money when determining salaries and raises… or fail to negotiate these things at all.

If it were really so simple, and women were consistently paid less than men, they would make up 100% of the workforce. Business owners don’t pay their employees any more than market forces require them to. If the “pay gap” was really so simple, it’d be the end of the line for male employees. Why not hire women and save?

Your kids have probably come across this narrative, too: from broadcast media campaigns, social media posts, and even billboards like this one emblazoned with, “Daddy, why do you pay women less?”

Yikes.

I don’t say this to scare you, but if you have a daughter (as I do), she is the prime target of this rhetoric. Left and right, she is told by our media, our government, and our culture that she is a helpless victim of unfairness, in dire need of help. (From the government, usually.)

Of course, you as a parent know this is a lie. She can achieve most anything she puts her mind to and will be paid according to whichever skills she learns. But how can you convince your children that they do, in fact, have every chance to achieve their goals and earn a living?

Start by teaching them about how the world works. Not what they hear on TV or see online, but how it really works.

Any of the Tuttle Twins books will help with this. But if this wage gap insanity has you worried, I recommend starting with The Tuttle Twins and the Messed Up Market. It explains the dangers of government intervention in the marketplace, including the importance of supply and demand.

The world is full of baseless issue campaigns, and they aren’t going anywhere. But we’re here to help your children learn to think critically of the world around them.

Until next time…

— Connor