Monday , November 29 2021
Home / Veronique De Rugy /The Gender Gap, Paid Leave Programs, and the Soviet Union

The Gender Gap, Paid Leave Programs, and the Soviet Union

Summary:
The Biden administration intends to nominate for Comptroller of the Currency a candidate who makes Senator Bernie Sanders looks like former Senator Barry Goldwater. The nominee’s name is Saule Omarova, a professor at the Cornell University Law School. Apart from wanting to regulate banks out of existence, Ms. Omarova tweets stuff like this: Until I came to the US, I couldn’t imagine that things like gender pay gap still existed in today’s world. Say what you will about old USSR, there was no gender pay gap there. Market doesn’t always ‘know best’. This quotation is neither a joke nor taken out of context. The Wall Street Journal explains: She graduated from Moscow State University in 1989 on the Lenin Personal Academic Scholarship. Thirty years later, she

Topics:
Veronique De Rugy considers the following as important: , , , , , , , ,

This could be interesting, too:

Alberto Mingardi writes The Economist on the growth of government

Alberto Mingardi writes Is the future of conservatism “national”?

Walter Block writes Is libertarianism fish or fowl?

Pierre Lemieux writes Infrastructure All the Way Down

The Gender Gap, Paid Leave Programs, and the Soviet Union

The Biden administration intends to nominate for Comptroller of the Currency a candidate who makes Senator Bernie Sanders looks like former Senator Barry Goldwater. The nominee’s name is Saule Omarova, a professor at the Cornell University Law School. Apart from wanting to regulate banks out of existence, Ms. Omarova tweets stuff like this:

Until I came to the US, I couldn’t imagine that things like gender pay gap still existed in today’s world. Say what you will about old USSR, there was no gender pay gap there. Market doesn’t always ‘know best’.

This quotation is neither a joke nor taken out of context. The Wall Street Journal explains:

She graduated from Moscow State University in 1989 on the Lenin Personal Academic Scholarship. Thirty years later, she still believes the Soviet economic system was superior, and that U.S. banking should be remade in the Gosbank’s image.

After she got criticized on twitter for her comments, she doubled down with this retort:

I never claimed women and men were treated absolutely equally in every facet of Soviet life. But people’s salaries were set (by the state) in a gender-blind manner. And all women got very generous maternity benefits. Both things are still a pipe dream in our society!

I shouldn’t be surprised that many people still believe insanity like this. After all, in 2017 the New York Times produced a series of articles to mark the centenary of the 1917 Russian Revolution with articles that included statements like this one by the University of Pennsylvania’s Kristen Ghodsee:

When Americans think of Communism in Eastern Europe, they imagine travel restrictions, bleak landscapes of gray concrete, miserable men and women languishing in long lines to shop in empty markets and security services snooping on the private lives of citizens. While much of this was true, our collective stereotype of Communist life does not tell the whole story.

Some might remember that Eastern bloc women enjoyed many rights and privileges unknown in liberal democracies at the time, including major state investments in their education and training, their full incorporation into the labor force, generous maternity leave allowances and guaranteed free child care. But there’s one advantage that has received little attention: Women under Communism enjoyed more sexual pleasure.

What’s some tens of millions of deaths compared to that?!?!?

I don’t know much about Ms. Omarova’s position on banking (apart from the fact that it seems destructive). However, I know that her statements on the so-called gender gap and on paid leave are utterly uninformed.

Let’s look first at paid leave.

I wrote earlier on this site about problems with some of the federal paid-leave plans. And over at the Acton Institute I explained the fallacy of leaping from the talking point that U.S. doesn’t have a federal paid-leave system means to the conclusion that most American workers have no paid leave:

[…] according to the Bureau of Labor Statistics, 17% of workers have access to a paid leave program, an increase from 13% two years ago. However, this number is highly misleading, since it severely underestimates the actual number of workers who benefit from paid leave. The BLS’s peculiar survey methods require paid leave to exist separately from “sick leave, vacation, personal leave or short-term disability leave that is available to the employee.” Proper accounting, which uses several government surveys about workers’ benefits, reveals that a majority of workers have access to paid family leave benefits, and three out of four who take leave in a given year get full or partial pay.

In other words, we may be the only country without a federal paid leave program, but we are also the only country with a vast and expanding network of companies that provide benefits like paid leave programs that are flexible, accommodating, and often more generous than the plan the Democrats have in mind.

On paid leave, I recommend the excellent works by the Heritage Foundation’s Rachel Greszler and former Cato Institute Vanessa Brown Calder. These two ladies are leading the fight against nonsense on paid leave coming from both the right and the left.

The Gender Gap, Paid Leave Programs, and the Soviet Union

As for the gender gap, here Ms. Omarova displays even greater ignorance. There is now a bipartisan recognition that when measured properly, the pay gap in the United States is minuscule. It certainly isn’t the 21 cents per dollar often advertised by the left. The fact that she doesn’t know this fact is telling about her poor understanding of economics.

Further, the work of Harvard economist Claudia Goldin (who is no raging libertarian, and who also wrote the entry on the gender gap linked above) demonstrates that this gap has almost nothing to do with discrimination. If you don’t want to read Professor Goldin’s academic articles, then at least listen to (or read the transcript of) this Freakanomics podcast. I also wrote about Professor Goldin’s work over at Creators:

Instead, it has to do with what Goldin calls the need for “temporal flexibility.” That is, women choose to work in positions that allow them the flexibility to take care of their children. What little there is in the way of a pay gap reflects women’s choices and not employers’ discrimination. This “earning” rather than “wage” pay gap is driven by women choosing to be moms, and it exists in every country, including Scandinavian ones.

In fact, economic studies show that this gap is as big or larger in European countries with huge amounts of social spending. For instance, a well-cited paper by Henrik Kleven, Jakob Sogaard and Camille Landais explains that although the United States and Sweden or Denmark “feature different public policies and labor markets, they are no longer very different in terms of overall gender inequality.” Other studies show that to the extent the gap is slightly smaller in Nordic countries than other big welfare states, it has more to do with these countries’ wage structures than with pro-family benefits.

The bottom line is that until more firms find ways to allow for flexible hours, the remainder of the pay gap will persist. The alternative is to find a way for men to get pregnant and produce babies – somewhat more of a challenge.

Now, let’s talk about her statement about the USSR.

Seriously, though. Bryan Caplan has written more eloquently and effectively about the U.S.S.R. regime than I can. So has, among others, the Cato Institute’s Marian Tupy. However, I have a few things to add. According to some estimates, some 20 million to 61 million people died unnatural deaths in the USSR, many of whom were women. But let’s ignore this tragic fact (since we are often told that indulging in such ignorance is what we have to do to appreciate the advantages of these regimes).

The argument we hear, and that Omarova apparently believes, is that the U.S.S.R. had higher female labor-force participation–including in high-skilled jobs such as doctors and cosmonauts–than did the did the U.S. and other capitalist countries. Isn’t a fact such as this one evidence that communist regimes are better for women? The answer depends on whether or not you believe that the most important good for women is a woman in the workplace—no matter the circumstances. Revisionist accounts usually omit the fact that communist regimes – with the U.S.S.R. being no exception – engaged in extreme social engineering, which included the practice of working their people to the bone in service to the state.

Sure, statutes expressly emancipated women and mandated equal pay for equal work. Yet large gender wage gaps and labor segregation persisted. Many scholars have documented how all communist countries were run by men; female leaders would have been unconceivable. Soviet women were not only expected to clean, shop for food, cook dinner, and raise the children, but also to perform the vast majority of physical labor such as street cleaning and highway construction.

So if they weren’t getting equal pay for equal work, were they getting something else that their capitalist sisters weren’t?

  •         It wasn’t a longer life. In the 1980’s, American women on average lived around 5 years longer than Soviet women.
  •         It wasn’t economic prosperity. The GDP per capita in the United States was around 6 to 7 times higher than that of the Soviet Union.

Finally, I don’t need to explain to readers of EconLog what’s wrong with the statement that “markets don’t know best.” While markets aren’t perfect, they are a far superior to central planning and bureaucratic interventions at gather and using relevant knowledge.

The bottom line is that while this candidate would certainly bring a different perspective to the position of Comptroller of the Currency, in part because of her background, her affinity for making statements praising the USSR and her economic ignorance are pretty worrisome.

Veronique De Rugy
Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University and a nationally syndicated columnist. Her primary research interests include the U.S. economy, the federal budget, homeland security, taxation, tax competition, and financial privacy. Her popular weekly charts, published by the Mercatus Center, address economic issues ranging from lessons on creating sustainable economic growth to the implications of government tax and fiscal policies. She has testified numerous times in front of Congress on the effects of fiscal stimulus, debt and deficits, and regulation on the economy.

Leave a Reply

Your email address will not be published. Required fields are marked *