(Why) Are Women Paid Less?

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Approximately 70% of employer’s expenses consist of labor costs. An employer that hires only females can save 20 cent per dollar compared to one that only hires men. Since a female worker saves the company 20 cents per dollar, she is performing equally to a man – to a lower cost. Since marginal benefit versus marginal cost for women is 20 cents higher than the ratio of men, there should be a clear incentive for hiring women. There has been a major discussion over the passed years about the questions around whether women and minorities are being wage-discriminated on the basis of their sex/ethnicity. This paper will elaborate on the part of women. In the 1950’s one third of the US workforce was made out of women compared to today where two…show more content…
So, yes the husband working to support his family should earn a higher salary than the childless man by the explanation above, but getting the woman (read wives) out on the market as well, would increase the national GDP.

3. The incentive for women to be self-employed rises from the fact that the opportunity cost of owning your own store is less than working for someone else. Consider this example: A woman can earn either $15/hour if self-employed or $10/hours as an employee. Her opportunity cost when working for herself is $5 less than if she would be employed. So logically, she chooses to be self-employed despite the fact that she knows she is earning less than a male self-employed. This is her second best choice. Why women earn less then self-employed men can derive from the fact that men choose to do business with other men, avoiding females. Men tend to protect their networks.

4. Discriminating based on sex or race is without exception something that is officially seen upon as highly despicable, without stating that it does not happen. One cannot choose whether to be born man or women neither can one choose what race to be born into. However, one can decide upon the level of human capital that one wants to posses. Education, experience, training, work habits etc. are elements that can be acquired
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