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Podcast episode

Patriarchy Inc. – Gender and Workplace Dynamics w/ Cordelia Fine – EP274

Show host Gene Tunny sits down with Professor Cordelia Fine to discuss her latest book, Patriarchy Inc. Professor Fine argues gender biases are embedded in jobs and organizational structures, affecting women’s career prospects. Topics include ‘greedy jobs,’ the undervaluation of feminized professions, the limits of diversity programs, and the role of evolutionary psychology in shaping gender assumptions. Whether you agree or disagree, this discussion offers a fresh perspective on gender in the modern economy.

If you have any questions, comments, or suggestions for Gene, please email him at contact@economicsexplored.com.

You can listen to the episode via the embedded player below or via podcasting apps including Apple Podcast and Spotify.

About this episode’s guest: Professor Cordelia Fine

Cordelia Fine is a Canadian-born British academic and writer. Her work analyses scientific and popular biological explanations of behavioural sex differences and workplace gender inequalities, explores the effects of gender-related attitudes and biases on judgements and decision-making, and contributes to debates about workplace gender equality. She is the author of three popular science books, published in 13 languages. Among other accolades, Testosterone Rex won the Royal Society Insight Investment Science Book Prize. She is currently a professor in the History & Philosophy of Science in the School of Historical & Philosophical Studies at the University of Melbourne.

Timestamps for EP274

  • Introduction (0:00)
  • Cordelia Fine’s Background and Interests (2:44)
  • Defining Patriarchy and Its Persistence (4:45)
  • Gender Pay Gap and Job Selection (12:03)
  • Impact of Gender Norms and Stigma (23:09)
  • Diversity, Equity, and Inclusion (DEI) Programs (33:01)
  • Market Thinking vs. Relations Thinking (40:07)
  • Alternative Evolutionary Perspectives (1:05:11)
  • Conclusion and Recommendations (1:14:11)

Takeaways

  1. The Gender Pay Gap Is Complex – It’s not just about discrimination; factors like ‘greedy jobs’ (roles demanding long, inflexible hours) and the devaluation of feminized jobs play a major role.
  2. Diversity Initiatives Have Limits – Many corporate DEI (Diversity, Equity, and Inclusion) programs focus on ‘fixing’ women rather than addressing structural workplace issues.
  3. Workplace Norms Favor Men – High-status, high-paying jobs often assume an ‘ideal worker’ who can dedicate unlimited hours—an assumption that disadvantages women with caregiving roles.
  4. Traditional Economic Models Miss the Full Picture – Traditional market-based explanations of wage determination often overlook workplace hierarchies, organizational power dynamics, and societal gender norms.
  5. Evolutionary Psychology Oversimplifies Gender – Popular claims that men and women have biologically determined career preferences are challenged by alternative theories emphasizing cultural and social learning.

Links relevant to the conversation

Cordelia Fine’s website:

http://www.cordelia-fine.com/ 

Patriarchy, Inc.:

https://www.amazon.com.au/Patriarchy-Inc-Wrong-Gender-Equality/dp/1838953345

Research showing increasing returns to overwork over time:

https://journals.sagepub.com/doi/full/10.1177/0003122414528936

The Gender Pay Debate: Understanding the Factors Behind the Gap w/ Dr Leonora Risse – EP230https://economicsexplored.com/2024/03/10/the-gender-pay-debate-understanding-the-factors-behind-the-gap-w-dr-leonora-risse-ep230/

Lumo Coffee promotion

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Transcript: Patriarchy Inc. – Gender and Workplace Dynamics w/ Cordelia Fine – EP274

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Cordelia Fine  00:03

And so the idea here is that that kind of gender biases and other kinds of biases can become embedded in jobs themselves over time, in ways that are shaped by the demographics of who’s doing those jobs, you know. And that takes us back to this conversation about when, when jobs become feminized, they have a harder time making claims on these organizational resources.

Gene Tunny  00:34

Welcome to the economics explored podcast, a frank and fearless exploration of important economic issues. I’m your host Gene Tunny. I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode. Please check out the show notes for relevant information. Now on to the show. Hello and welcome to this episode. In this episode, I’m speaking with Professor Cordelia fine, a distinguished academic and author known for her research on gender psychology and workplace dynamics. She’s professor in the history and philosophy of science at the University of Melbourne, and she’s written several acclaimed books, including testosterone Rex, which won the Royal Society insight investment science book prize. Our conversation explores key economic and social questions surrounding gender in the workplace, how much of the gender pay gap can be attributed to personal choice versus structural factors. To what extent do economic models accurately reflect Workplace Realities, and how effective are corporate diversity initiatives? I’m particularly interested in hearing cordelia’s perspectives on these issues, given her interdisciplinary approach, drawing on psychology, sociology and economics, whether or not you agree with her conclusions, this discussion offers valuable insights into ongoing debates about gender and the economy. Please let me know what you think about what either Cordelia or I have to say in this episode, you can send an email to me at contact@economicsexplored.com a special thanks to Lumo coffee for sponsoring this episode. This top quality organic coffee from the highlands of Peru is packed with healthy antioxidants, economics explored. Listeners can enjoy a 10% discount. Details are in the show notes. Now let’s jump into the episode. Cordelia, fine. Welcome to the program. Thank you very much for having me. It’s a pleasure. Cordelia, you’ve written a very interesting, provocative for economists, I think in some instances, book, patriarchy, Inc. So I’m keen to talk to you about that just before we get into it. Could you give us a sense of, how did you get interested in these issues in the first place? Please?

Cordelia Fine  03:05

Yeah, that’s a good question. So I’ve been, I actually started my life, you know, interested in questions of moral psychology and moral philosophy, and I plunged into the area of sex differences and gender issues, sort of around 2008 or so. And then I spent quite a lot of my time interested in questions about why men and women are different, and how those kinds of explanations help us make sense of social structure. And I’ve long been interested in, of course, there are lots of really important issues to do with that, such as, you know, violence and so on. But I’ve always been interested in structure in terms of organizations and who does what kind of work, and you know, what they what they get into in return. And from about 2010 or so, I was working at the Melbourne Business School, and that’s where I encountered the sort of, sort of two components of my interests came together in some sense. So on the one hand, I was much more integrated in a business community that had a growing interest in gender diversity as it was being referred to, and at the same time, I was encountering more people from a discipline that I hadn’t had much interaction with, namely, economics. And economists were getting interested in gender differences and and sort of the contribution of biological or even evolutionary factors in kind of core concepts for economics, like risk taking and competition. So my previous work has sort of examined that from, you know, really unpacking the science, exploring the science of that and in patriarchy, Inc, I kind of brought that together with what I was also seeing, which was the sort of rise of the business. Case for gender diversity, so, but perhaps we can talk a little bit more about that later.

Gene Tunny  05:05

Yes, yes. So what do you mean by patriarchy? Inc, to start off with, please. Cordelia,

Cordelia Fine  05:13

yeah. So it’s such a fun way to start interview, isn’t it talking about patriarchy? So there are lots of different meanings, or people can mean different things when they say patriarchy. When I say patriarchy, I’m just referring to this quite simple idea that men as a group have higher status and more power than women as a group. Social Scientists often refer to that instead with the term gender hierarchy. And so that’s what I mean by patriarchy. And by patriarchy, Inc, I’m referring to the many social processes that are operating in post industrial countries that help maintain this gender hierarchy by shaping women and men into different roles in the division of labor and shaping what they get in return. So to put it even more simply, patriarchy, Inc, is referring to the gender dynamics that the gender dynamics of who does what and who gets what in countries like Australia, UK, US and so on. Can

Gene Tunny  06:14

I ask? I mean, I understand, I think I understand the concept of patriarchy, and clearly in I mean, decades ago, I think you’d have to say we were clearly a patriarchy. There’s no doubt about that. But things have changed over the last 50 years. And I mean, we’ve had sex discrimination act, we’ve had a female prime minister, we’ve had various female CEOs, and the mean female representation on boards is, I think it’s increasing, but at least it is over the long term. What what remains of the patriarchy? Can you please give us a sense of that? Cordelia,

Cordelia Fine  06:57

yeah, of course. So society, yes, it has been changing. It has been changing for a long time, and it’s had sort of very rapid changes, really. Perhaps, one might say, in the last century or so, although many would argue, depending which country you’re looking at, things have have stalled a bit. But, and I think it’s also important to say that, perhaps more than ever, men’s circumstances vary widely. So there’s lots of variation among men, as there is among women, with with education level and race being particularly important factors in circumstances. But overall, when it comes to the division of labor, we still have men holding more leadership positions. They’re more likely to work in well paid industries. They earn, earn higher wages, they have greater earnings, they hold more wealth, they enjoy more leisure, and they’re treated more with more respect in workplaces. It’s not all good news for men. I mean, if you look at a workplace fatalities, for example, which is a very important outcome you have, 95% of those are are men. But I think in terms of looking at who holds the sort of high status positions in society and who has most, most power over resources, I think it’s hard to make the case that we’re in a kind of gender flat arrangement or a matriarchy. So if you know, if you look at the ASX, 300 recent stats show that 91% of CEOs of men, 86% of the chairs of ASX. 300 boards are men in 2021 men were holding three quarters of C suite and senior senior leadership roles in financial services in Australia and even political representation, where I think there’s a kind of much still disputed, but a sort of stronger philosophical view that our political representation, in order to have legitimacy, needs to somehow reflect the community that it’s serving demographically in certain ways. I mean, yes, we’ve had a female prime minister, but it’s one, was it 31 you know, there is really good equality across both chambers and senior executive service roles in government, administration and so on. But that’s that hasn’t come about organically. I don’t think there’s been a lot of work to make that happen. And if we look across state premiers and chief ministers, we’re still seeing majority majority men. So So that’s in terms of the leadership, and in terms of, you know, we all know. We hear every year about the gender pay gap, we hear less about the gender wealth gap, which is probably more significant for economic well being and well being more generally. It’s quite hard to get data on that, but the studies that have been done show that there’s a sort of universal gender gap in wealth across across OECD countries, for instance. And then you know who has respect in workplaces? So, you know, there are, you know, some men can be targets of sexual harassment, but women are more likely to be targeted for sexual harassment than men. So I’d certainly take the point that things, things have changed a lot and often for the better. But you know, these stats are the stats that don’t think they’re really too much up for dispute. I think what what gets interesting? And I don’t spend a lot of time in the book talking about these statistics, because they are so familiar to many people. I think what gets interesting is the question of why we see these patterns, and what if anything we should do about them. So those are the, those are the, really the questions that I’m targeting in the in the book, and trying to challenge one point of view that says, Actually, we don’t really have a problem anymore, and another point of view that says, Oh, we do have a problem, but here’s how we’re going to here’s how we’re going to fix it. So kind of the patriarchy in account is trying to offer a sort of different account of what the problem is and what we need to do about it. Yep,

Gene Tunny  11:10

yep. Now, did you mention that the Senior Executive Service of public of the public service is that reasonably equal? Is it, is that, I’m just trying to remember what you said about that, is that is diversity or gender representation, or there’s less of a patriarchy there, or there’s more balance there. Is that, right? And that’s been the you think that’s, that’s the result of specific policies, is it?

Cordelia Fine  11:37

Yeah. So, for example, positions on Australian Government boards and Deputy Chair positions on on boards are, you know, pretty, pretty gender balanced. I have to say gender representation in politics isn’t, isn’t my, isn’t my area of expertise. So, you know, there’ll be other people who could talk, talk a lot more about about that. Yeah,

Gene Tunny  11:59

gotcha now, when it comes to the if we talk about gender pay gap and the types of roles that women are disproportionately employed in because that, you know, that’s part of that story. And then there’s the story about greedy jobs, so to speak, to what extent is it due to women and men selecting jobs that they’re they would prefer to do. To what extent is it any remaining gender norms or or biases? To what extent is it still? Is there still some discrimination or that should be outlawed? How do we unpack that I’ve chatted with? I mean, I know you’ve listened to the conversation I had with Leonora, and I think there’s a legitimate, you know, this is a really important empirical question. What are your thoughts on the relative contributions of all of these factors? Cordelia,

Cordelia Fine  12:57

I think it’s very difficult, slash impossible, to separate them out in a way. So I say that knowing that you know, if you come at this from a sort of traditional economic perspective, you can look at the gender pay gap, and you can, you can decompose it into different contributory factors, and there’s even been work this is based on the US gender pay gap. I don’t know if the same has been done here in Australia, but sort of actually even identifying the the contribution of the gender gap in overwork to the overall gender gap. So you have a premium for overwork. More men than women are likely to overwork, and that that makes a sort of certain contribution to the to the gender pay gap, and I don’t remember the exact number, but it was, it was actually counteracting the gains that women had got from their educational progress. So, you know, women have been getting more and more college degrees relative to men and overall, and that kind of benefit, in terms of their wages, had been sort of canceled out right by by this premium on on overwork. So certainly you can, you know, use those kinds of economic methods to sort of allocate a percentage of the gender pay gap to something like greedy jobs and the difference between men and women and men in doing that, but, but I think you know, when you come at this from other disciplinary perspectives, it becomes much more complicated. So if you think about greedy jobs themselves, you know a sociologist or a psychologist would say that there’s something inherently gendered about greedy jobs, because if you are in a greedy job, that job is assuming the kind of ideal worker who can work very long hours and be constantly available, and that assumes that there is someone at home providing this flow of family work that will keep things going and. And you know, that’s a very gendered that’s a very gendered division. I think it’s also worth pointing out that having a premium for overwork isn’t a kind of inevitable natural law of the market. So the same analysis that I referred to showed that it’s only relatively recently that there’s been a premium for overwork, and they attribute that to sort of changing economic structures, you know, the sort of increasing polarization into good, but very greedy jobs versus sort of bad, precarious, precarious jobs. So, you know, in but in the past, there wasn’t that premium for for overwork. You know, above and upon beyond that you’re simply, simply working more hours. I think there’s also an assumption that that there’s a kind of exponential increase in productivity when you’re working longer hours. That might be the case in some occupations, but sometimes it might be more assumed than empirically proven. And there’s lots of, you know, interesting discussion and debate about the link between long hours, working hours, and productivity. And of course, they’re people who say we’re actually much more productive, particularly in these kind of knowledge industries, when we do have time to rest and take a break and be a bit more creative. And I think, you know, sometimes organizations haven’t been very imaginative about how they might make jobs a bit less greedy, and the implications that might have for gender representation. And I know the economist Claudia golden, you know, has, has, has made this point herself. But just to, just to give an example, there was a really interesting series of interviews with Norwegian women and men who were working in male dominated areas of finance, so sort of asset management, markets, investment banking, corporate banking, and within large corporates. So obviously there’s a sort of gender gap in who’s working in these kinds of in these kinds of areas, and that helps to contribute to the gender pay gap, because these tend to be, you know, very well paid occupations. Now in Norway, they’ve made quite a lot of progress in terms of men taking parental leave, but there’s still a kind of gap in that men, even in these Scandinavian countries, they tend to be taking leave at times when it’s convenient for the organization, rather than when it’s most needed at home, so they’ll take it on Fridays or in summer holidays and so on. And so what they found was that the men who are even men who are fathers, were taking leave in ways that meant that they could kind of cling on to the clients that they had, that that they needed for their career success, and in order to get these these large bonuses, whereas for women, when they became parents, they took parental leave in the kind of more so to speak, disruptive ways. And if they took, you know, too long a leave, they would lose their clients to someone else, and that they would rarely get them back. And the researchers were talking actually to a Norwegian financial professional about this. And you know, he made the point that, you know, we don’t need to have people sort of owning clients necessarily. They he suggested maybe there could be a more collectivist approach to clients own ownership. So he said, and I quote him here, there should be a structure where the bank owns the client and not me. Therefore, if I’m away from my desk or get run over by a bus, it doesn’t really matter, because the client will be taken care of by the company. In addition, if anyone is on parental leave, it makes no difference, because everyone knows all the clients, and there’s a common pot, so everyone is equally happy. So you know, we can have arguments about, you know, how practical that would be how the clients would feel, and so on. But you know, it, he’s pointing out that there’s a norm, there’s an assumption about how it works between the professionals and the clients, and it’s a way that disadvantages people who, you know, aren’t, you know, endlessly committed workers who will never step a step, you know, step off the treadmill at any time at all, or even, you know, get unwell, for example, or have a aging parent. And it doesn’t necessarily, necessarily have to have to be that way. So, you know, there’s a whole lot of things to be unpacked behind the contribution of greedy jobs to the gender pay gap. And just to add one sort of last point to this, there was a really interesting, very deep analysis of bonuses in French banking firms by a French sociologist. And this was, sort of, he was looking at the data. He was, you know, doing an ethnographic study. It was a whole bunch of different methods. And one of his conclusions was that when you’re trying to explain the bonuses that bankers are getting, which could be extremely large, you can’t explain them simply in terms of the sort of normal explanations of productivity, supply and demand, etc. And he said one of the explanations was that these bankers would sort of exert this de facto ownership over particular. To their clients, and then they would use that as leverage in their kind of endless negotiations and politicking. So I think that this is just the greedy jobs example. Tells us like there’s so much behind you know, you can, you can allocate a percentage of the gender pay gap to gender gap and greedy, greedy jobs, but there’s so much more to unpack behind that that’s mixing together a whole lot, a lot of different assumptions and and phenomena and different and different factors. So yeah,

Gene Tunny  20:34

and what was that? You mentioned a study. I hadn’t been aware of that study. There’s a study that shows that the rewards, or the return on overwork, or the the returns to greedy jobs, they’ve increased over time. Do you recall the details of that study? I can put a link in the show notes. I’ll look, I’ll go back to your book and try and find it, but if you know it off the top of your head, I’d be interested in learning more about it. Um,

Cordelia Fine  21:03

I’m gonna, I’m gonna get the name wrong. I’m not gonna, I’m not gonna attempt to find it. But I can say I’m not sure it was in the book, but I can certainly send it to you, and if I remember correctly, it was maybe around the 1980s that this difference started to emerge. And one thing they found was that there wasn’t gender bias in who was getting the premium on overwork. So women who were overworking were not kind of being under rewarded relative to men. The gap came from women just being less likely to overwork in that way, which they defined as 50 hours or more per week,

Gene Tunny  21:36

right? Yeah. And so this, I mean, this could be for any number of reasons. There’s the reasons yet the the greedy jobs model assumes that there’s somebody at the at home, or, you know, it’s more, I think I had this conversation with Leonora. I mean, it’s not going to apply in every every family better or partnership, but it’s more likely that the the man will be the one doing the greedy job than the than the woman, the woman would be at home and looking after children. So yeah, that’s absolutely right.

Cordelia Fine  22:12

And I think that comes down to, you know, we often talk about, you know, the choices that women are making, but you know, we also have to ask questions, and I do ask questions in the book about what what men’s preferences are, and it’s, it’s not like men have full control over how long hours they’re going to work. You know, if you’re in a very competitive, high turn corporate environment, and you’re the main breadwinner, because that’s the decision that’s been made. Well, you might not feel that you have you might be working many more hours than you would actually prefer to. And this is a problem that people, you know, couples, heterosexual couples, actually same sex couples as well, are kind of being forced into patterns of work but do not necessarily reflect contemporary society, where we don’t have this kind of understanding that there’s a male brand breadwinner and a female caregiver with at most a secondary job.

Gene Tunny  23:16

Yeah. And one of the other issues I think, look, we I think I chatted about this with Leonora, that women are more likely to choose caring or professions that are well, caring professions, nursing or well teaching, and they’re typically well, they’re not as well paid as some of the the job, the more jobs that men more Typically or disproportionately represented in so I think that’s a, yeah, that’s another part of it. I just wonder is, I mean, are there psychological rewards to doing some of these jobs? I mean, are the do women prefer to work in these jobs relative to others? Is there any evidence or or psychological reasoning for for that that justifies it? Yeah, look,

Cordelia Fine  24:01

this is the idea of kind of compensating differential. So there’s one economist who, I think, Julie Nelson, who describes it as women being compensated in warm feelings. So look, I think, I think there are a few, a few things to say about that. So one is, you know that there are many people have argued that these kinds of jobs are undervalued, so like setting aside, you know why? Why women are choosing them and men aren’t, they’re also just undervalued, and part of that comes from the sort of rise of gender norms. They haven’t been with us forever, but this idea that caring is caring is something that comes naturally to women and that they’re sort of, they’re doing what’s natural to them. And so it’s not really that kind of work isn’t skilled work, per se, and so it doesn’t have the kind of wages that are commensurate with the skilled work that that it actually. Is, so, yeah, so that’s, that’s one aspect of it, that a lot of this work is skilled, demanding, you know, actually really hard work, you know, aged care, whatever it is, but that it’s, it’s, it’s being that it’s being undervalued. And I think that the other thing that people can overlook is that when we think about these post industrial economies, they they grew through the kind of expansion of these so called Pink collar jobs and so, you know, during that period when women were kind of being brought much more into the labor market. They were these jobs were sort of quite explicitly designated as being for them, and then they were sort of made compatible with this assumption that they would be fitting them around their caring responsibilities. And so so that had a number of consequences. So one consequence was that, you know, these sort of caring possession occupations became very female identified, and that sort of stigmatized them for men. So men would be kind of less interested in participating in what was seen as, you know, female, female occupations. And it also meant that the sort of male jobs weren’t necessarily also being arranged in ways that made them compatible with caring responsibilities,

Gene Tunny  26:30

right? I might need you to explain that a bit more. I’m not sure I understood that properly. I can understand, yeah. I mean, we’ve seen a big drop in the number of males who are teachers, that’s for sure. I’ve seen that. And, I mean, one theory, and I don’t know how much explanatory power this has, or one hypothesis, is that men are concerned about judgments that are made about them, if they’re a male teacher, and they’re just concerned about the the scrutiny, and, you know, concerns about. I mean, you know what I’m I think, I think you know what I what I’m talking about. There’s that concern men have and why they wouldn’t be in in teaching a particularly primary school teaching, but I can’t, it’d be good to sort of explore this. You mentioned that some of the the rise of the pink collar jobs, those jobs were arranged in a way that was they were assuming that women had family or caring responsibilities, yeah, which

Cordelia Fine  27:27

they would have. So, you know, we think about what was happening say, in the 1980s there was this kind of compromise whereby the idea was that it wasn’t that we had a male breadwinner and a female caregiver who was a full time homemaker, but there are more women coming in and having sort of part time jobs that they could fit in around their sort of caring responsibility. So it was still being taken for granted that, you know, taking it home and the kids was was, was their job. And so in order to bring women into those into those jobs, they had to be made such that they could be fit, fit in around those caring responsibilities. I remember being at a sort of industry workshop about gender equality, and someone was talking about how it was sort of impossible to be a part time uniform police officer, because there was a sort of 24/7 demand for policing. And somebody there said, oh, like nursing, right? It was just a good example of, like, yeah, we need nurses 24 hours a day, seven days a week. But somehow they’ve managed to, because most nurses are female, it is actually possible to be a part time nurse, to take periods off and so on and so forth, so but to come back to your question about the stigma. I mean, this comes back to, you know, it’s sort of ugly talk about it, but that, you know, men are higher status than women, and that’s in our, you know, current societies. You know, that’s a function of the fact that men hold the majority of positions of leadership. I mean, a really sort of simple, intuitive way of kind of grasping that the kind of stigma of femininity is to think about, if you had a child, and how you would feel about dressing your daughter in, you know, jeans and a footy top, versus dressing your son in a pink frilly dress. And I think most people would feel more comfortable dressing their girl in the boys clothes than the boy in the girls clothes, for instance. So that’s just a sort of very intuitive example of this fact that you know this idea like, well, if women are doing it, how important? How important can it be? And they’re, they’re, you know, economists and sociologists have been looking at these patterns of women coming into certain kinds of occupations. There’s occupations becoming sort of more gender balanced, or even feminized, and what the effect of that is? So some have looked at, you know, wages going down. And as a job becomes more feminized, and even more recently, people have sort of looked at how much of occupational segregation is actually to do with men tending to leave jobs that have become sort of, quote, unquote, too, too female dominated. And that can you know you can see that at different different levels of fine greatness, you know, it might even be in the form of sort of, what’s called micro segmentation, where it’s about, okay, well, you know which specialties come male dominated, for instance. So you’re still maintaining this distinction between women and men, there’s something very persistent about gender segregation. And when people have done interviews with men who have even chosen kind of female dominated roles, like being a, you know, cabin crew on aircraft, or librarians, they notice that they’re even though they’ve chosen these, these occupations. And these are not ones where you have these concerns about, you know, trying to get access to children in a kind of nefarious way that they’re kind of trying to distance themselves from, from, from it. So they might as well, I call myself a sort of information to do with information analysis. If they’re a librarian, or they talk about, they emphasize the security and the safety aspect of being a cabin crew member, as opposed to the sort of service side of it, which, of course, is quite appropriate. Cabin crew are at core. They’re there for safety.

Gene Tunny  31:33

Yeah, okay, we’ll take a short break here for a word from our sponsor

Female speaker  31:41

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Gene Tunny  32:10

now. Back to the show. I like to look at some of those studies. So you mentioned there are studies where they show that as you have a traditionally male dominated field, and more women enter the field of the occupation, and what the average pay goes down. The average wage was earnings, is that the is that the point you were making? Yeah, that’s right, right. Do you know any examples off the top? Yet, I can have a look at the study. I’m just, it’s just it’s just fascinating point that one. I’d just like to explore that a bit.

Cordelia Fine  32:47

I’m not gonna, I’m not gonna remember. I’m not very good

Gene Tunny  32:50

at members. We can find it after the show. Just keen to have a look at that, that study and and what professions, and just how they establish that, and what the nature of the impact is. It sounds fascinating. And

Cordelia Fine  33:04

look, I think I’m pretty sure that those studies are done in the US, and you know, have to be careful about generalizing to other labor markets. But

Gene Tunny  33:14

yeah, yeah, no problem. Okay. What about dei programs? You have some some incisive comments on or insightful comments on dei programs. What do you see as the the merits or demerits of of those programs? Please? Cordelia,

Cordelia Fine  33:35

yeah, interesting time to be discussing dei and you know, with Trump’s executive orders, and so maybe I’ll just preface my remarks by saying that I have a particular target in my book, which is, I’m not against diversity and quality and inclusion. Hopefully that goes without saying what I’m what I’m criticizing is what I call a kind of business case Dei, which is captured by kind of familiar phrases like, you know, gender diversity isn’t just the right thing to do, it’s the smart thing to do. So, you know, we can create more profit. We can take create more high performing organizations, more innovative firms, by ensuring that we ensuring that we include women, and I have a I think this is there. You know, there are certainly forms of dei that are helpful, and I don’t want to make any sweeping generalizations about the merits of dei that are going on in any particular organization. I think many of them have brought about very beneficial effects, but I think it’s also the case that some di programs are not effective, and often those are quite popular ones, like anti bias training. Yes, but they can also miss the real problems. They can overlook opportunities to genuinely enhance merit, and they’re sometimes unnecessarily divisive, which we’ve definitely seen some evidence of of late. So you know, if we think about the business case dei a lot of gender di programs, although they don’t come out and say this necessarily explicitly, they’re kind of geared around the idea that the problem to be solved by organizations, and the way that we get to gender equality is by solving a kind of under utilization or under development of female human capital. So a kind of classic example of this is Sheryl Sandberg, best selling book Lean In so she wrote that when she was CEO of Facebook. And there’s a sort of associated lean in foundation with lots of resources for for women and companies. And basically, when you look at dei programs, there are. There are basically three approaches which have been dubbed, fix the women, create equal opportunities and value the feminine. Now they all have some pros to them. They’re not sort of unambiguously, you know, ineffective or negative. But you know, they do, they do have some some problems. So maybe I’ll just give you one example, or I can give as many examples as you want, up to three. So if we start with the sort of fix the women programs, and these can be a bit divisive, right? So these are things like women’s leadership and development programs, and the idea is that you’re encouraging women to sort of lean into opportunities to grow their human capital or to be more confident about selling their assets, right? So you know, if you look at the Lean In website, you’ll see videos with titles like, you know how to use body language for power or influence, or how women can be powerful speakers and own any room. Now look, these kinds of resources can be useful. I’ve got nothing against people watching videos like this to try and be more powerful, powerful speakers and so on, and to think about how they’re using their body language. But there’s not, there’s not much evidence that these leadership and development programs are actually effective for one thing. So that’s a, you know, we have to think about the resources and women’s time that’s that’s going into that. There’s also a sort of interesting study suggesting that this kind of talk about let’s empower women to lean in, can actually allow some kind of subtle victim blaming to fly under the radar, because the idea is that you say by sort of indicating that women can solve the problem of gender equality, you’re kind of putting the responsibility on them to solve it, and also a little bit blaming them for causing the problem in the first place by not leaning in, right? But I think that you know the main, perhaps the main problem with the fix the woman approach, is that it’s a distraction from the sort of features of jobs and workplaces that need fixing. So, you know, and this is going to vary depending on, you know, what jobs we’re talking about, what industry in what country. But you know, it’s about improving the quality of part time jobs, for example, working out ways to ensure that jobs aren’t being kind of unnecessarily constructed around this expectation that we’ve just talked about, that workers will never take time for family or for any other reason ever. So it’s not really kind of scrutinizing jobs to think about ways that it might be the jobs or the organizational structures, you know, is there, is there a proper career advancement for this kind of jobs that women are clustered in and so on? Are we undervaluing what women are contributing? So if we turn now to the value the feminine approach. So, you know, we hear, we heard a lot of this following the global financial crisis, for example, this idea that women are risk averse if we have more women on Wall Street or in financial, you know, in financial leadership positions. You know, the financial crisis might not have, might not have happened. And I think the problem with this is, well, one problem is that it’s really, at least in some quarters, and I’d be very, you know, clear to say that some diversity consultants are very careful and cautious and accurate, and the way they talk about these things, other people will engage in the most sort of egregious gender stereotyping in order to sell the idea that you know you can just add women and stir and you’ll enhance your profits, right? So this idea that men and women think in such different ways that if you’ve just got men, you’re missing something really crucial. So we need to bring in, you know, we need to bring in the women. And that will, that will, you know, compliment men’s skills, Nas is insulting to women. It’s actually also insulting to men, and it’s just simply not accurate. When you look at the literature on. Are sex differences and the kinds of traits that are important in in organizations. But I think, you know, moving, you know, setting that aside, I think too often it just comes in the form of lip service, you know, we should value the feminine, as opposed to really thinking about what contributes to organizational success, what merit looks like, and ensuring that that is actually embedded in the organization. You know, is it the people who are ruthless, relentlessly self interested, taking, you know, terrible risks, engaging in misconduct, or actually getting ahead in the organization? And if so, there’s a lot of work that needs to be done within that organization to change what’s rewarded and what’s punished within that within that organization.

Gene Tunny  40:50

Yeah, can, can I ask about that? So to what extent can one organization do this, or unilaterally, given they’re in competition with other organizations and they may need to. They rely on these, you know, the some of the the men, or the or not just necessarily men, but they rely on the people doing the greedy jobs, to do the greedy jobs, to help them maintain their competitive position or get the deals done. If we’re talking about Goldman, Sachs or or JP Morgan. So how do we actually get to that position that you’re describing? Please. Cordelia,

Cordelia Fine  41:27

does that make sense? No, it makes sense, right? It’s hard to answer. So I guess one answer is, you know, this is very broadly speaking, like, you know, I don’t have, like, here’s my five point solution to the financial system. Okay, so I don’t, I don’t have that, let’s but you know, so some people might say, well, regulation can help, and regulation with teeth, because then, you know, the people who are misbehaving, you know, will actually not be rewarded from it. That might be punished. I suppose it’s worth thinking about, you know, competitive advantage in the long term. So if we think about some of the ethical scandals that we’ve seen that, have, you know, ultimately led to, you know, very large losses in share price, for example, you know, if we think about the Volkswagen diesel cheap devices or the Wells Fargo fake accounts scandal, right? You know that it didn’t end up going terribly well for those organizations in the long term, even though, in the short term that you know, it was, it was beneficial for them, or particularly for the people at the top of those organizations. So, you know, I think within organizations, it’s probably important. I, you know, I certainly acknowledge the point you’re making about industry norms, and often, like when I talk about the Volkswagen scandal in a business school environment, people who come from the auto industry, you know, say, look, a lot of this, you know, the way that you You’re kind of gaming the system in terms of emissions. You know, these are, these are industry norms. And if you, you know, if everyone else is doing it, then you know you’re at a disadvantage. If you, if you’re not doing it too. So, you know, one can recognize this thing. But I think it’s also probably important to recognize that there can be quite a lot of variation within firms, even within the same within the same industry, so that we there’s a probably limit to the extent to which we can, you know, blame sort of industry wide conditions on what’s going on, but, but I think you know, If you know, if CEOs are going to be saying that they are earning their very large, often very large salaries, then if they’re just, you know, doing what everyone else is doing, and there isn’t much scope to do things differently, then that, then that seems, that seems a bit that does seem A bit strange. And I think you know, particularly when we’re talking about these kinds of they’ve been described as Hobbesian environments, where you do have people behaving in ways that benefit themselves, but are not necessarily benefiting the organization. It does seem to me that there is scope to think about what’s actually being rewarded and who’s advancing in those organizations. I mean, one really nice example of that. It wasn’t a it wasn’t so much a gender equality example, but it was to do with a cultural change on deep sea oil rigs and. And it was the impetus was to increase safety, because it was a sort of new oil rig. There were, you know, it was becoming even riskier, even more dangerous. And there was this concerted effort. It was called safety 2000 strategy, and it involved doing like thinking about what is being defined as competence here? Is it? Is it genuine competence, or is it just performances of masculinity? Are we making people behave as if they always know what they’re doing, or are we creating an environment where people say, I don’t feel safe, or I don’t know how to do this? Do people on the you know? Are we creating environment where it’s just produce as much oil as you can, regardless of other considerations. Or, you know, is safety a little bit, you know, more of a more of a concern, and this, this strategy was remarkably successful in reducing the safety rate, but it also increased productivity and efficiency of of oil production. And the other thing that it did, and this wasn’t that they weren’t looking for this as an outcome, but it really changed the almost all men who are working on these rigs in those kinds of roles, they became to understand themselves quite differently as men. So they used to be sort of hyper masculine environments, and the researchers found that they become quite different. They were, they were safety conscious, they were quite compassionate. They might be, they might be like sending baby tapes of Mozart, you know, for for colleagues who just had a new baby. It, you know, it actually had, as you would expect, these these efforts to change the culture, changed the way that men behaved, how they interact with each other, and even how they understood what it meant to be, what it meant to be a man, and their kind of understandings when they’re asked of what it meant to be a man were quite sort of gender neutral, or even sort of even feminine. So I think, you know, that’s a really good example of where you originally had a situation in which, you know, competence was aligned with masculinity. And when they actually made the effort to they didn’t have a gender hat on, but when they actually thought, you know, what’s going on here? How can we create a safer environment? It not only did create a safe environment, but it also didn’t have a detrimental effect on the kinds of things that affect the affect the Bottom. Bottom line,

Gene Tunny  47:29

yeah, that’s a good example. I think that’s in your book, isn’t it? If I remember that correctly, yeah, yeah, very good. Okay, excellent. Now there are a couple of things I wanted to cover just before we we wrap up, you make a comparison between market thinking and relations thinking, and you see that as a you see this market thinking as a concern. Could you just explain briefly what you mean by market thinking versus relations thinking, please? Cordelia, yeah,

Cordelia Fine  48:00

so market thinking, I’m kind of referring to the sort of, you know, classic approach that mainstream economists might take towards understanding these kinds of phenomena like the gender wage gap, and we’ve talked a little bit about that already. Relations thinking is, I was really drawing, you know, to give it some more formal academic title, I was drawing on a sociological theory which is called relational, uh, relational inequality theory, which is developed by sociologists called Donald Thomas COVID, Stevie and Dustin Abbott, Holt. And it’s quite a mouthful. I hope I pronounced the names correctly. But just to take a step back, and I think, you know, it’s important to be clear that I’m not, you know, I think the way that economists, the information that economists have produced about the gender pay gap, for example, using their sort of typical decomposition analysis like this, is really useful information, you know, it’s helping us see what are the different parts that are contributing to the gender pay gap. So one thing we can see is it’s not just employers paying women less for the same work, right? Okay, so we can there’s still, there’s still a gap which, which might is a candidate for discrimination and underpayment. But we can also see that there are contributions from factors like, you know, what kind of firms or organizations people are working in, you know, the human human capital variables and so on. So, you know, this is useful. This is useful information. But sort of to take a step back a bit social scientists when they are trying to understand complex phenomena like the gender pay gap, they’re always operating within frameworks that have, you know, favored theories, particular key concepts, important variables that tend to get included or excluded and often particularly. The kinds of methods that are used to investigate their questions. And so in sort of what I call market thinking, when economists are trying to understand inequalities between women and men, such as in the gender pay gap, the key concepts do tend to be focused on individuals. So we might talk about the, you know, the differences between women and men in how they develop and use their human capital. So, you know what, as we’ve just been talking about, and then once we’ve controlled that, we can, we can infer that the gap that’s unexplained, so to speak, you know, maybe that’s discrimination. Maybe it’s something else that we haven’t measured yet. We don’t, we don’t know. Okay, so as I said, I said, I think this can be useful, but it only goes so far. And it, you know, and we’ve already talked about lots of the different ways in which, you know, even when we take a single number, like the percentage of the gender pay gap that can be attributed to overwork, for example, there’s a lot more going on around and I think there we need different frameworks and different conceptual theories and conceptual resources and variables and methods to understand what’s going on. And that’s where I draw on what I call relations thinking. And so in this particular theory, the way they distinguish themselves, you know, from the from the economists, if they’re thinking about the gender pay gap, for example, is that for economists, the kind of assumption is that wages are determined by the labor market. In the labor market through the sort of laws of supply and demand, but they say, Well, look, it’s not the labor market that’s actually determining wages, but organizations so managers aren’t kind of just rubber stamping the wage that comes down from the invisible hand, but that these wages are the result of people negotiating in organizational life. And so yes, of course, human capital variables are important. Of course, supply and demand is important, but they’re really focused on how, how people are relating to each other and making demands on organizational resources. So whether that’s particular industries asking for support from governments in the form of subsidies or tax breaks or regulatory environments that are beneficial for them, whether that’s particular groups of people making claims on wages or conditions or other kinds of benefits. Um, it’s all to do with these negotiations between groups of people who are in sustained relationships with with with each other. And you know, some some people play with more hands in their cards, in their deck, in their hand, then, yeah, then others and stronger and stronger ones. So what they argue is that part of that has to do with the kinds of, you know, the status of the kind of occupation that you might be in, or the human capital variables that you have. But it also has to do with what sociologists call status characteristics, which to do with, you know, gender, race and class or education level. And so, you know, one example of this, which I think is really interesting, kind of really interesting test of relations inequality theory, is that they say that, you know, this link between wages and productivity. Okay, they say, look, managers aren’t, you know, super accurate calculators of individual merit and productivity. There’s this loose coupling between productivity and market forces, and that leaves plenty of scope for bias to creep in. And one of those forms of bias can be gender bias. You know, we’ve already talked about this idea that, you know, caring professions are undervalued because it’s seen as not really skilled work, but just, you know, what comes naturally to women, or what they find, what they find rewarding. And so what they’ve argued is, if this is right, then when we see positions that are being dominated by high status groups, like white men, those kinds of groups are going to have a better, easier time of making demands on organizational resources than occupations that tend to be dominated by lower status groups, so women and members of ethnic minorities, for example, or people don’t have particular educational credentials, and a really example, interesting example of a study that that was supportive of this idea was an analysis of both us and Australian workplaces. And what they found was that in more most of these workplaces, unsurprisingly, the managers were earning more than the core production workers, which isn’t which isn’t very surprising, but what they found was that this kind of, what they call class inequality was bigger when the workers were primarily women and the managers were primarily men, and they found a sort of similar result when managers were primarily white in the US. Or a native language speaker in Australia, and this is, you know, controlling for, you know, things like education and experience. And so the idea here is that that kind of gender biases and other kinds of biases can become embedded in jobs themselves over time, in ways that are shaped by the demographics of who’s doing those jobs, you know. And that takes us back to this conversation about when, when jobs become feminized, they have a harder time making claims on these organizational resources, which helps to explain why we sometimes see the wages, the wages going down. And of course, there’s a there’s a history to jobs, you know, and in some cases, this history will go right back to a time when it was sort of enshrined in policy that certain jobs were for men and they needed to be paid more because they were the breadwinners and they had a wife and to keep of course, that seems Like a very alien idea now, but those kinds of assumptions about the value of a particular job, can you know, can can follow, can follow those jobs? Yeah, it’s not like we start the Monopoly board all over again at the start of each year or each each decade. There are these kind of legacies that that, that linger on.

Gene Tunny  56:19

Yeah. Yeah. I mean, that sort of situation. I mean, it’s still in the I mean, there’d still be people alive today who would have experienced that or, I mean, they’d be very old now, but I know that my my great aunt, when she was a teacher, she had, I think the teachers have to resign when they had a baby, when they had a child, and, yeah, yeah, yeah, extraordinary. And then she needed to get special approval to go back to work, because she had to for financial reasons from the Education Department. When she was a and she had young children, it was, you know, and that’s suddenly the, I mean, that was the 1960s right? I think still early 60s, maybe

Cordelia Fine  57:02

it changes the rule within at least some of our lifetimes,

Gene Tunny  57:06

right? Yeah. I mean, there’s Yes, so, yeah, it’s just extraordinary to think like we have come. We have come a long way. But I take your point that there could, there’s still these. It sounds like there is your hypothesis that these norms, they’re so biases, they’re so widespread across industries, that the normal sort of market operations that economists would talk about forces of supply and demand, the ability of say you’re being undervalued in one job, so you’re a female working in a job where you’re not being valued. Well, what the economist would say is, well, then there’s an opportunity for you to move to another job. Well, an employer who recognizes your value should be able to offer you a job, a higher paying job, and you can take that job at another, at another workplace. Now, I know that’s sort of an idealized, abstract sort of model, but that’s, I think that’s how a lot of economists thinking are thinking about it. But is the hypothesis that because these, there are these biases, these are norms that sort of, that type of thing can’t happen.

Cordelia Fine  58:10

Yeah, it’s, I think it’s that the that this, this idea of the the mechanisms of supply and demand acting as a correction on overpayment or underpayment. You know, it is an idealization, and it’s not clear that there is sort of distortion of it, distortion of it in practice, to the extent that you know, is it? Is it a helpful to what extent is that a helpful assumption when we’re trying to understand, when we’re trying to stand understand gender equality? I mean, you know, one example, I think, is when we think about aged care workers, for example. So not that long ago, there was a Fair Work Commission that ultimately resulted in pay rises for certain people working in the aged care industry. But you know, that didn’t happen kind of necessarily organically, through processes of supply and demand, even though, you know, often in these care sector areas, we do have a supply a supply issue. It had to sort of be forced through unions, right? I mean, Another example might come from analyzes of CEO pay. So there’ll be some arguments that would say, Look, we’re not, we’re not really seeing, you know, neutral market forces here measuring genuine productivity and contribution to the to the firm, we’re seeing a kind of expensive game of executive leapfrog, where one CEO uses the best paid CEO as a kind of a standard for, usually, his own salary, right? You know? So these, obviously, these are complicated issues, and people can people. Can argue about it, but yes, the the sort of relations thinking would be much more skeptical about how powerful this market mechanism of supply and demand is in actually, kind of determining wages and ensuring that there’s this close coupling between productivity and wages.

Gene Tunny  1:00:22

Gotcha. I think I’ll have a closer look at that literature. It sounds fascinating. I think economists, we it’s it’s incumbent upon us. We need to think about just how applicable our abstract models are to the real world, where we’re making certain assumptions about how things work. And I think it’s important to then confront those with actual well data or experiences or just understanding what’s happening out there. Okay, so, yeah, we’ve had a Oh, two in depth conversation. This is really interesting. It’s, you know, really important issues, really fascinating. I love, you know, I like thinking about how the labor market works, learning about, you know, all of these studies I haven’t heard of before. I’d like to end with this question good early, just to give you another opportunity, I’m keen to understand what your recommendations are. I think we sort of started talking about that when I asked that, that question that maybe was a bit that I wasn’t very well expressed on my part. But how could we fix the problems that you see? Do you think that the market outcomes we’re experiencing, are they? They’re unfair, they’re significantly unfair. Do they require significant government interventions to fix Can you give us a sense of that your thinking there, please.

Cordelia Fine  1:01:38

Yeah. So this is you know, for me, these, these are, I think this is a hard question to answer in the abstract, because so my, you know, my book isn’t focused on any particular country, and partly that’s just because, you know, often the interesting studies that have been done, you know, have been done in all different countries, depending on which data sets the researchers happened, happened to use. And then even you know, so there’s a huge amount of variation in the situation. You know, the US context is very different to the Swedish context, for instance. And then even within countries, you know, it depends on the industry, you know, in some in some industries or organizations like I think, there are continuing issues of, you know, straightforward agenda bias in terms of how people are being evaluated, whereas in other industries or in other firms, Actually, organizations have done a really good job of ensuring that women and men are being evaluated fairly. And, you know, the research supports the fact that, you know, sometimes things aren’t fair, and sometimes things things are. And there’s, there’s some examples of that in the book. So you know, if you’re if your organization is already doing a really good job of making sure that job applicants are being evaluated fairly. Then, you know, that’s not going to be a priority for you. Whereas, if, if you’re in one of the organizations that doesn’t, that’s, that’s pretty low, that’s pretty low hanging fruit. So again, that’s that. It’s difficult to sort of talk about that in the in the abstract, but I suppose, yeah, so one, I think one way that we can make progress, I think, is to continue to try and reorient our economy And our society away from this old fashioned breadwinner, caregiver model, which, I think, for a number of reasons, isn’t really working for anyone. And you know, some of that’s going to be about changes at the government level. Some of that’s going to be a changes in the organizational level. Sometimes that’s even going to be about decisions that people private, decisions that people make, make in their in their own homes. I think we do need to do a better job of kind of many cases, scrutinizing our concepts of merit, particularly, and I think particularly in male dominated industries or occupations where there can be a conflation of merit with just performances of masculinity. Now, you know, we it’s not, I think we have to be careful about saying like, well, anything that has a smidge of masculinity to it that must just be, you know, gender biased, you know, it’s something we have to be able to talk about and disagree and disagree on and discuss, but we do need to be, as I said before you know, thinking about who’s getting rewarded, and are they genuinely contributing to the organization, and are there contributions that people are making to the organization that are not being recognized? And not being rewarded. And we need to make sure that when we do identify where we’re going wrong, that that is reflected in both our formal systems and our informal system. So selection criteria, promotion criteria, onboarding, training, but also the sort of informal norms, the rituals, the heroes, the kind of advice that people, that people are, are, you know, giving to other people about this is how you get ahead in this organization.

Gene Tunny  1:05:28

Gotcha. So who’s your book? Just Just wondering. Just just occurred to me, then who, who are you aiming your book at? Who would you I mean, I guess you want as wide a readership as possible everyone, yeah, yeah. But I’m just wondering, I mean, it seems like it needs to be read by people in I mean, it gives people in corporates something to think about, gives policy advisors something to think about. Also gives economist something to think about too. How can we make sure that we’re analyzing these, these labor market phenomena as best we can? Are we measuring the right things, that sort of thing, are we asking the right questions, testing the right hypotheses, so that, you know, just just wondering, what’s the what would you like to see as a result of your book?

Cordelia Fine  1:06:12

Yeah, so Well, one thing I’d like to see, and we haven’t really talked about this, is, you know, in many ways, this book is a it’s a science book. So it’s, you know, a large part of it we haven’t really talked about this is talking about sex, differences in behavior, where they come from, what partly what they are, where they come from. How persistent are they, you know. So my book spends a lot of time challenging ideas that can be quite popular, including mine, economists that you know, we have these because of evolution. We have different personalities in the sense of traits, abilities, skills, values and motivations. And so even in the situation of perfect equality, we’re always going to see inequalities of outcomes. So I don’t reject that point of view out of hand. I think it’s really it’s a quite widely held point of view, roughly speaking. And you know, we are biological creatures, we have evolved. Our minds have evolved, and there are sex differences right in our in our bodies and our reproductive roles. So a lot of the book is it’s just people who are interested in these questions about how we become who we are. And in the book, I point out that there are quite different evolutionary theories on offer about the evolution of the human mind and social life, and the kind of evolutionary psychology that has a lot of currency in the popular domain, and perhaps I would say among some economists, is not the only theory on offer, and I don’t think it’s the most the most compelling. So part of it is thinking about what other evolutionary perspectives on the human mind can tell us about this issue of why the division of labor exists, why it’s so persistent, for example, so part of it’s just a kind of intellectual curiosity,

Gene Tunny  1:08:13

yeah, fair enough. I mean, maybe I should have asked you about that. So have you got time now, just to, just just keen, to understand what are those alternative perspectives. So I think the one perspective, if I’m getting this right, is it this? This view that evolution means that men are there, the hunters. They’re going to be the aggressive ones, the ones who go out and kill the beasts and bring them back, and the women are doing the work around the campfire. The doing looking after the children is so they’re more suited, like evolutionary to or they’re more predisposed to those sort of caring roles, is that the sort of synopsis of that view is that, is that wrong? And why is that wrong? Or what are the other perspectives? Yeah, um,

Cordelia Fine  1:08:56

no, that’s that’s not wrong. And the evolutionary psychologists and also we have to think about, you know, sort of reproductive success as well. Where the differences in the evolutionary accounts come from is what’s, what’s in our minds, right? That enables us to successfully survive and reproduce in these sort of demanding environments. And so for the evolutionary psychologists, you know, you often hear people talk about, oh, you know, dismissing social science as being blank slate test. So what they mean by that is a mind that has the sort of general purpose learning capacities of sort of associating stimuli with response, or, you know, stimuli with stimuli. So we have this sort of general purpose associated learning, but not much else. And the evolutionary psychologists would say, Look, we just can’t, there’s we don’t get enough information from the environment to be able to solve the kinds of challenges that we face as humans. So there must be. Some pre existing content in our minds. And in addition, that content is at least in some realms, different for women and men, because the kinds of challenges that women and men faced and the kinds of solutions that were most successful were different, okay? And that comes back to, you know, men being able to, you know, impregnate many females, females. Okay, I think people are so familiar with that I probably don’t need to ban on it. They’re quite right that, no, that a sort of completely blank slate view of the human mind is not a plausible one. But there are other evolutionary perspectives that do not that take a quite different view on what it is that we are born with that enables us to solve these problems. So one point of view is that we’re born with biases to copy certain kinds of people. So we copy people who are kind of like us. So we actually have a same sex bias. We tend to copy people who are the same sex, or we tend to copy the people who are most prestigious, because they’ve been successful. So we’re gonna, you know, we should copy, we should copy them, right? So we have these, they’re called Content biases. There’s other points of view that say, well, actually, we can actually go quite far in understanding these capacities that we have that enable us to cope in the world with even less, even less than that. So we have, if we just start off with keen interest in people, particularly faces and voices, you know, like we all know babies, you know, from an early age, they’re already kind of gazing at us, right? We were tolerant of each other in ways that other animals typically, typically aren’t. And then we do have these very powerful General, General learning abilities. And we also have this culture where we are teaching and learning and picking up information, and you can get a long way with with just that kind of starter, starter kit. So this is a kind of really live debate within evolutionary science. And what I argue in the book is that, you know, part of what makes us so successful, or maybe sort of the thing that makes us most so successful as a species, is our capacity to to cooperate, our capacity to, you know, pick up, enhance and pass on, you know, culture, you know, beliefs, technologies, ideologies, values, practices and so on. And that we can understand the gender division of labor as something that has kind of culturally evolved, because it was a because it was efficient, and then we’ve built up this sort of whole structure around it, but we have minds that are in order to enable us to cooperate. Have all these sort of capacities to enable cooperation. So we’re very good at picking up norms. You know, here we are. We’re having a conversation. You’re the interviewer. I’m the interviewee. You didn’t have to say to me at the beginning, all right now, Cordelia, I’m going to ask some questions, and you’re going to answer them, and please stay seated. You know, don’t leave, you know, right? So all these norms

Gene Tunny  1:13:07

don’t leave. What I asked really silly questions. So, yeah, go ahead, yeah.

Cordelia Fine  1:13:13

We kind of take it for granted, but we, you know, we can identify people as holding particular social roles. We have identities as particular members of particular groups. So, you know, you’re an economist, I’m a psychologist, you know, you’re a man, I’m a woman, right? And so we learn the roles. We have an identity. We know what the expectations are, you know, we’re just really, really good at that as creatures. This is something that no other animal does, and that we can understand gender and the gender division of labor as really recruiting all of all of these capacity. So it is an evolutionary account, but it’s not the evolutionary account that we think of from from evolutionary psychology. Gotcha.

Gene Tunny  1:13:56

Okay, I’m gonna have to go reread that, that section I probably focus more on the the economic sort of sections. And looking, think, reading about the gender pay gap, I should go back and read that. That’s fascinating. And it’s, it’s something that economists, yeah, definitely, probably should think more about. And, yeah, I’m gonna have to, I’m gonna have to have another look at it sounds, yeah, sounds, sounds like there’s a lot of, you know, really interesting research that you’ve that you discuss in the book. So very good. Well, anything else important that I’ve missed or I haven’t appreciated Cordelia before we wrap up?

Cordelia Fine  1:14:34

No, it’s been a great conversation. I’ve really enjoyed

Gene Tunny  1:14:36

it. Excellent. Yeah, well, well done on the book. I’ll put a link in the show notes, and definitely recommend people check it out. I think that, yeah, very, very important issues, and I mean issues we’ve been talking about for I mean, gender pay gap certainly is one of the most studied issues in economics. It’s always you. Been there. There’s lots of, lots of really fascinating research on it. And I mean, Claudia golden won the Nobel Prize a year or so ago, if I remember, yeah, not last year, the year before, and yes and yes, lots of really good, good points to think about in your book. So Professor Cordelia, fine. Thanks so much for your time. I really enjoyed the conversation.

Cordelia Fine  1:15:24

Oh, not at all. It was a pleasure. And thank you for having me on the podcast, of course. Okay,

Gene Tunny  1:15:28

thanks, Cordelia, thanks, righto. Thanks for listening to this episode of economics. Explored. If you have any questions, comments or suggestions, please get in touch. I’d love to hear from you. You can send me an email via contact at economics explore.com or a voicemail via speak pipe. You can find the link in the show notes. If you’ve enjoyed the show, I’d be grateful if you could tell anyone you think would be interested about it. Word of mouth is one of the main ways that people learn about the show. Finally, if your podcasting app lets you, then please write a review and leave writing. Thanks for listening. I hope you can join me again next week.

Obsidian  1:16:18

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Credits

Thanks to the show’s sponsor, Gene’s consultancy business, www.adepteconomics.com.au. Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts and other podcasting platforms.

Categories
Podcast episode

2024 Highlights: Reagan’s Budget Czar on Trump | Greedy Jobs | Super Abundance | Buffett in Omaha | Housing & Immigration

Host Gene Tunny discusses significant economic issues from the year. He features clips from interviews with experts on various topics, including the economic consequences of Donald Trump’s re-election, the U.S. budget deficit, the gender pay gap, and environmental impact. President Reagan’s budget director David Stockman criticizes Trump’s policies for being anti-capitalist, citing a $8 trillion increase in public debt. Fiscal policy wonk Dan Mitchell argues that higher taxes are not the solution to the U.S. budget deficit, as spending is the primary issue. Leonora Risse (Assoc. Prof., University of Canberra) explains the concept of “greedy jobs” contributing to the gender pay gap. Marion Tupy of the Cato Institute discusses the long-term decline in commodity prices, and Daniel Lawse of Verdis Group emphasizes the need for sustainable, long-term thinking in business and policy. Daniel also reflects on the modest lifestyle of Warren Buffett, another Omaha resident. John August discusses the impact of immigration on Australia’s housing crisis.

If you have any questions, comments, or suggestions for Gene, please email him at contact@economicsexplored.com.

You can listen to the episode via the embedded player below or via podcasting apps including Apple Podcast and Spotify.

Timestamps for EP265

Links relevant to the conversation

Episodes featuring the clips:

https://economicsexplored.com/2024/01/28/reagans-budget-boss-david-stockman-on-trumps-economic-policies-ep224/

https://economicsexplored.com/2024/04/17/is-uncle-sam-running-a-ponzi-scheme-with-the-national-debt-w-dr-dan-mitchell-ep235/

https://economicsexplored.com/2024/03/10/the-gender-pay-debate-understanding-the-factors-behind-the-gap-w-dr-leonora-risse-ep230/

https://economicsexplored.com/2024/10/16/abundance-mindset-exploring-the-super-abundance-thesis-w-marian-tupy-cato-institute-ep258/

https://economicsexplored.com/2024/06/01/helping-seattle-aquarium-others-go-to-net-zero-and-beyond-w-daniel-lawse-verdis-group-ep242/

https://economicsexplored.com/2024/04/17/housing-crisis-and-immigration-australias-tough-choices-w-john-august-ep236/

Leonora’s review of Career and Family: Women’s Century-Long Journey toward Equity, by Claudia Goldin

https://onlinelibrary.wiley.com/doi/abs/10.1111/1475-4932.12716?domain=author&token=UPATKK2WTIAEZ49UMRMV

Principle of Charity podcast episodes on degrowth:

https://podcasts.apple.com/au/podcast/can-degrowth-save-the-planet/id1571868650?i=1000674757240

https://podcasts.apple.com/au/podcast/can-degrowth-save-the-planet-pt-2-on-the-couch/id1571868650?i=1000675655623

Lumo Coffee promotion

10% of Lumo Coffee’s Seriously Healthy Organic Coffee.

Website: https://www.lumocoffee.com/10EXPLORED 

Promo code: 10EXPLORED 

Transcript: Is DeFi the Future of Finance? Exploring VirtuSwap’s Vision w/ Prof. Evgeny Lyandres – EP262

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Gene Tunny  00:00

Gene, welcome to the economics explored podcast, a frank and fearless exploration of important economic issues. I’m your host, Gene, Tunny, I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode. Please check out the show notes for relevant information. Now on to the show. Hello. Thanks for tuning in to the show. This is the 2024 highlights episode, and this episode, I want to play some clips from some of my favorite episodes of 2024 Okay, to start off, we probably should cover one of the biggest stories of the year, if not the biggest story, which was the re election or of Donald Trump as US President. So that is going to have some very profound economic consequences. And I chatted with my friend and colleague, Darren Brady Nelson about it days after the news on the show. So that was a few episodes ago. Darren is someone who is supportive of Trump on the show, I’ve had critics of Trump and one of those prominent critics in the States is somebody by the name of David Stockman, who was Ronald Reagan’s Director of Office, of management and budget. So he was a budget official for Ronald Reagan, who is the celebrated Republican president of the 1980s and Stockman is one of the never Trumpers, and I had a very interesting conversation with him early In the year, and I wanted to play a clip from that episode, because I think Stockman is someone who deserves to be listened to, and I think, personally, I think he makes some good points. So without further ado, let’s play the first clip, and this is David Stockman on Trump’s war on capitalism. You argue that he is a clear and present danger to capitalist prosperity. Could you explain, David? How do you How can we reconcile these things? I mean, Donald Trump does seem to be the exemplar of a capitalist, but yet he’s a threat to capitalism. How do we reconcile these facts?

David Stockman  03:05

Well, those are great questions. I don’t think really he’s an exemplar of capitalism, and we can get into that. I think he’s an exemplar of getting lucky when the Fed created so much inflation and asset prices and made debt so cheap that if you were a speculator in New York City Real Estate or elsewhere, you possibly made a lot of book wealth. But I don’t think it was capitalist genius behind it. That’s the first point. The second point is that his policies were really almost anti capitalist in some common sense. Notion of conservative economics. To have a healthy capitalist economy, you need three things. One, fiscal rectitude. You can’t be running up the public debt, spending like there’s no tomorrow, and having the government grow and mushroom and impinge in every direction on the economy. You can’t have easy money and a central bank that is flooding the system with cheap credit and excess liquidity. You can’t have a government that is really anti free market, which is what trade protectionism is all about, and he’s the biggest protectionist in the White House, you know, since, I don’t know, Hoover signed smooth Holly in 1931 so all of his policies were really in the wrong direction. Now, I do concede in the book that the one abiding virtue that Donald Trump has is he’s got all the right enemies. Okay? The establishment hates him, The New York Times, The Washington Post, CNN, The Washington what I call unit party establishment, the leadership and the long standing careerist of both parties can’t stand him, but basically, it’s because he’s an outsider. Because he’s unwilling to conform, and he’s pretty obnoxious and unpredictable. That’s why they’re against him. The point of the book, though, is none of his power his policies were wrong, even if he had the right enemies, and nothing that he did help the economy or addressed the huge long term problems we have of a runaway public debt, of a government that’s way too big and too costly and too intrusive, and especially at the heart of the matter a central bank that is out it’s a rogue central bank. It’s out of control, and yet Trump was constantly on their case, demanding even easier money, lower interest rates, even more, you know, of the same that got us into, you know, the huge bubbles and troubles that came from them. So the point of my book was to say he had a chance. He’s got a four year record, we can look at it as terrible. It offers nothing in terms of remediation of our great problems and putting us in a different direction for the future. So, you know, don’t waste the opportunity. And you know, that’s about where I come out,

Gene Tunny  06:20

right? Oh, okay, so you write about what you call the Donald’s reckless fiscal and monetary policy. So we might talk about fiscal first. Now, among other things, you talk about the most grotesque act of fiscal malfeasance in American history. So that was something that Trump was associated with you argue, are you talking about the the big tax cut, the Trump tax cut in 2017 is that? Is that something you see as as reckless? That’s

David Stockman  06:51

part of it. But I’m looking at the overall picture and the data, the big top line data on spending, and borrowing on the public debt. Now let’s just take it down to the core metric, which is the public debt. I mean, if you’re running huge deficits and spending far beyond your willingness or ability to tax, it comes out in the public debt. When Trump became president in wrong terms, the public debt was about 20 trillion. When he left, it was 28 that’s 8 trillion of growth, 8 trillion of debt, public debt in four years. You let me ask the question, when did when did we get the first 8 trillion of public debt, and how long did it take us to get there? The answer is, in 203, it took us 216 years, 43 presidents, to rack up 8 trillion of debt. He did it in four years. That’s kind of the bottom line. It puts it in perspective, in terms of how big the error was. If we look at other more conventional measures, you get the same picture.

Gene Tunny  08:01

Okay, so that was David Stockman, who was President Reagan’s Director of Office of Management and Budget, and he’s certainly no fan of President Trump, certainly, I mean, Trump is going to have big consequences for the economy. There’s a lot of concern about a global trade war. There’s concerns about, I mean, really, will he be able to get the the budget into shape he has Elon Musk and Vivek Ramaswamy at the Department of government efficiency. It remains to be seen how much real influence they will have and to what extent they’ll be able to to get the budget under control. One of the challenges, of course, is the the role of the entitlement program, Social Security and Medicare, which are such big parts of the budget, and just they’re on autopilot. Really, they’re, they’re demand driven. They respond to people’s needs that the entitlements are dictated by the acts of Congress, so they’re very hard to change, right? Oh, so on the the issue of getting the budget under control, I’d like to play a clip from my interview with Dan Mitchell. So I spoke to Dan in episode 235 in April, and it was about his new book, The Greatest Ponzi scheme on Earth. So it’s about us, government debt. So Dan is one of my favorite commentators. He’s got a really great blog called International liberty. If you’re not subscribed to that, definitely check it out. I mean, Dan’s coming from a libertarian perspective, someone who’s skeptical of. Of big government. So I’m generally sympathetic with with with that. So yes, I think it’s a it’s a good, good blog. So yeah, regardless of your views. So it’s definitely worth checking out because it’s Dan has a lot of good facts and talks about empirical work, empirical studies. So definitely worth, worth checking out. Even if you’re you think you’re unlikely to to agree with Dan. Okay, so let’s, let’s play a clip from my conversation with Dan, the way I set up this. This part of it was, I asked Dan about why he thinks higher taxes aren’t the solution to the US budget deficit, this large structural budget deficit they have. I made the point that, look, you’ve got these entitlement programs that the government doesn’t want to reform, so maybe the government, I mean, I was implying that maybe the there’s no choice but to increase taxes. Not that I’d necessarily recommend that. But how are they going to repair the budget? So that’s the that was the setup. So let’s hear what Dan has to say? Well, I

Dan Mitchell  11:24

guess there are two things that are important to understand. The Congressional Budget Office, every year publishes a long run forecast. And by long run that they’re looking out 30 years, they publish this long run forecast of the US economy, and in that document, the most recent one came out just last month. I think it was maybe two months ago, but it showed that revenues are above their long run average, spending is also above the long run average. And if you look at the forecast, 30 years out, the revenue burden is going to climb to record levels because, mostly because of real bracket creep. In other words, as you know, even in a sluggish growth economy, you know, people are going to sort of, their incomes are going to increase, they’re going to go into higher tax brackets. So the government winds up getting bonus tax payments with even modest levels of economic growth. So the tax burden is heading to be at an all time high, but because government spending is projected to grow much faster than the private sector, it means that that that we’re falling farther and farther behind. So just as a matter of pure math, our problem is more than 100% on the spending side of the budget. Again, revenue is climbing as a share of GDP, but because spending is climbing much, much faster. Why on earth would we want to increase taxes on the American people for a problem that is more than 100% on the spending side of the budget? But that’s just a math argument. Now let’s look at what I call the public choice, slash economic issue, which is that if you put taxes on the table. What are politicians going to do? They’re going to increase spending. And not only that, if they get the taxes through, the economy is going to suffer. Now, I’m never one to say, Oh, you raised this tax or that tax, there’s going to be a recession. I worry more about if you raise this tax or that tax, the long run, growth rate will decline, and even if it only declines a small amount, maybe two tenths of 1% a year, that has massive long run implications because of the wedge effect over time and then. And I think that even left wing economists, the honest ones, are going to admit that higher marginal tax rates and work saving and investing are not good for growth. So as GDP gets smaller and smaller over time, at least in terms of compared to some baseline projection, that means work on tax revenue, because there’s less national income to tax. So what’s the bottom line? Politicians will spend more money because of the higher taxes, and the higher taxes won’t generate as much revenue. And you don’t want to know what the most powerful evidence for this is. I think I did the data for the for the 15 countries of the old European Union. Other words, the core Western European countries that would be most analogous to the United States, or, for that matter, Australia, you know, relatively rich by world standards, Western oriented nations, and what did I show in the European Union? You go back and I did a five year average. So nobody could accuse me of cherry picking just one year that was favorable to my analysis. I did a five year average for the last half of the 1960s and I looked at government spending as a share of GDP, taxes of the share of GDP, and government debt as a share of GDP and taxes. Between the end of the 1960s and the most recent five years, the tax burden in Western Europe increased by 10 percentage points of GDP. Now politicians in Western Europe, in these various countries, Germany, France, Belgium, Netherlands, et cetera, et cetera, they. Said, Well, we have to raise taxes, because we have red ink, we have deficits in debt. So I said, Okay, taxes went up by an enormous amount as a share of GDP between the late 60s and today. What happened to government debt? Did they use this massive increase in the tax burden to lower government debt? No government debt during that period doubled as a share of GDP. In other words, politicians spent every single penny of that new revenue, plus some. So when I debate some of my left wing friends, I tell them, show me an example anywhere in the world where we’re giving politicians more money to spend has resulted in better long run fiscal performance. It just doesn’t happen. By contrast, I’ve gone through the IMS World Economic Outlook Database, and I have found not a lot, unfortunately, but I found many examples of countries that, for multi year periods, had government spending growing at 2% a year or less. And what do you find in those cases when they’re spending restraint? And we talked about this, by the way, we have an entire chapter in the book where I cite some of these good examples. When you have spending restraint, deficits go down, the burden of government spending as a share of GDP goes down. You have success. Yeah, I couldn’t. We could have had some blank pages in the book and lift and entitled that chapter success stories of higher taxes, because there wouldn’t be anything to write.

Gene Tunny  16:33

Okay, that’s good stuff from Dan Mitchell, from Center for freedom and prosperity. I think it is He? He was, once upon a time, he was at the Cato Institute. He’s a well known commentator in the US on fiscal policy issues. He’s on CNBC, Fox Business, etc. And yep, he’s a he’s a good economist, and he’s a terrific commentator. And I’m really grateful that I’ve been able to have him on the show as frequently as he’s been on the show. So I’ll put a link in the show notes to to that episode and to the others that I play clips from. So yep, if you if you liked what you heard from Dan there, then definitely, definitely check out that episode. What I liked about that? I think he made a really good point about how politicians will, they will find a way to spend any additional revenue. I think we all know that’s that’s generally true. I mean, I suppose not always. There are times when politicians act responsibly, say, in Australia, from about the late 80s through to maybe yeah, I guess the Yeah, essentially, until the late 2000s we had very responsible Treasurers and governments, and then we seem to have abandoned that since then, unfortunately, and in the US, we had the period when you had Bill Clinton and the House GOP led by Newt Gingrich, they were cooperating on the budget and managed to repair the US budget. So there are times when politicians have been, have been, have done the right thing, but I think generally, they can find ways to spend any additional tax revenue, as as Dan Mitchell is pointing out. And I mean, they all the politicians. I mean, one thing you notice is that they love going to the openings of the the movies, hanging out with Chris Hemsworth and all of the the Hollywood stars. That’s something that we see here in Australia, where there’s very substantial subsidies to the film industry. Okay, so that was Dan Mitchell, thought that was a great clip. I think I’ve played parts of that in other episodes through the year on tax and government versus the private sector. I think I may have played a bit of Dan in that, but it’s good stuff. So it’s, it’s worth, it’s worth replaying every now and then. Right? Oh, let’s move on to another clip. And this is about another issue that I come back to every now and again on the show. It’s this issue of the gender pay gap. And, you know, this is a very, you know, it’s very political this issue. And there are a lot of people who say, Oh, well, it’s, you know, this is terrible, and it’s an example of discrimination, is exploitation. Then other people say, Well, hang on, it’s, this is a multivariate, uh, phenomenon, and it’s, it’s due to the the industries that. Women work in, or the occupations that they choose, but then you get the counter argument. Well, hang on, those industries and occupations, they were imposed upon women, in some cases, or women by the, you know, the patriarchy, or gender norms, etc. So there’s a big debate about the gender pay gap that I’ve tried to cover on the show in an objective way. So just hearing all of the arguments and just thinking critically about what the data, what the evidence tell us, and one of the people that I’ve really valued talking to about the gender pay gap, is Leonora Reese, and she is a an associate professor at University of Canberra. She’s also an expert panel member for the Fair Work Commission, and that’s the federal body that regulates industrial relations in Australia, and earlier this year, in March, I interviewed Leonora about a new gender pay gap report that the federal government released, and that generated a lot of debate within Australia. And I was just alluding, well, I was just going through what some aspects of that debate are, the the question of whether you’re comparing like with like, etc. There was a criticism of the report that was very strident by the well known economics commentator for the Australian, very good economist, Judith Sloan. And that is, that was, that was how I set up this part of the conversation with Leonora. I mentioned that that article by by Judith, which was critical of that report. So that is the context for this. This part, this clip in which Leonora and I talk about this notion of greedy jobs. So greedy jobs, this is one possible explanation for part of the gender pay gap. So let’s hear from Leonora. I want to ask about Claudia golden because Claudia golden, she won the Nobel Prize for Economics last year. Judith Sloan quoted her work in so in Judas article and Judith because Judith is saying, Well, this is all nonsense, because this is just all Yes. You’re not comparing like with like. It’s it’s all just explained by difference, differences in composition, different choices people make, and she was interpreting Claudia golden. So this Judith is interpreting Claudia golden as saying that the gender pay gap, it’s mostly due to the fact that there’s this premium for long and unpredictable hours, and men are more likely to work those jobs, pursue that pursue those jobs because women are more likely to be carers and they don’t have the Yeah, they they’re more Yeah, they’re less likely to want to pursue those jobs like as males, pursue them so disproportionately. So what do you think about that as a theory. I mean, what? And because I only were chatted about Claudia Golden’s work before or since the Nobel Prize was announced. So would you be able to comment on that? Please?

Leonora Risse  23:51

Sure, absolutely. So Claudia Golden’s the concept that she’s coined here is greedy jobs to reflect these particular jobs in the workforce that demand a lot of you as a worker to work long hours, to be on call, on weekends, on late shifts, and to be rewarded for that. That’s the important part. So to be paid overtime rates, to be fast tracked your promotion, to get bonuses in reward for for being, I guess, more available to your employer. I think it’s partly a symptom of capitalist society as well. You know, to really, to really draw as much of the worker that you can out in terms of their time, their loyalty, their commitment. And so Claudia Golden’s work brings the gender dynamic into that. This concept brings the gender dynamic into that, because the way that society and policy is structured is that it forces couples, if we’re looking at a male and female couple, to make a choice. Services with as a household as to which of them are going to be that particular worker and be on call, and which of them are going to attend to caring responsibilities, to household tasks at home. So collectively, they’re maximizing or optimizing their total income and trying to balance, you know, both both spectrums. So the way that gender norms give rise is that it tends to be, on average, the male partner who will put their hand up for those greedy jobs, and females who who would opt to, you know, be on call at home, basically. And so the gender pay gap widens, even on an hourly basis, because this, there’s this premium attached with those types of jobs, and they’re rewarded, you know, it’s, it’s seen as a positive thing in workplace culture. And so the my, you know, the way that I interpret Claudia Golden’s work, and she articulates this, I think, pretty clearly in her book, career and family, is that unless you have gender equity at home, it’s very hard to achieve gender equity in the paid workforce. So as long as there’s some sort of gender division at home, you just don’t have that time availability in the paid workforce. So she’s actually advocating for for gender equality. She’s not saying this rationalizes or legitimizes the existence of the gender pay gap. She says it’s a an explanation that needs attention and that we should be looking at. How do we look for ways to reduce this culture of expecting workers to be working such extensive hours and to be on call? How can they be more substitutable with each other? So you know, if you’re not available, it doesn’t matter, because your colleague can step in, and she gives examples from the industry of pharmacy, the pharmacy industry, where that that is, is a change in cultural practice, and that allowed more women actually to advance in that industry. So her, you know, the action or the policies that emerge from that are ones that start to address that existing inequity in the system and steer us towards something that’s more equitable, and I would say, also healthier as well. Now, other people might interpret that differently, but I think that’s a very, very firm and widespread way of expressing Claudia Golden’s work. I did write a book review of her book, and it’s published in the economic records. Yeah, I’d be very pleased for people to have a read of that and see what, see what they think of the points that Claudia golden has expressed. And of course, yes, she did. She was awarded the Nobel Prize in Economics in recognition of decades and decades of work looking at women’s participation in in the workforce, and how that has changed over time from an historical perspective right up to contemporary time. So she is a big advocate and champion for working towards a more gender equitable economy.

Gene Tunny  28:35

Okay, so that really gives you something to think about, doesn’t it? Least, that’s what I thought. I thought that Leonora is explanation of the concept of greedy jobs and how you interpret that in a policy sense. So Leonora summary of what Claudia Golden’s position is. I thought that was, I thought that was very good. So I will put a link in the show notes to that episode. I’ll put a link to that, that book review of Golden’s book that Leonora wrote, and it was in the economic record. Hopefully it’s not pay wall, but it may well be which you would be disappointing. But anyway, I’ll look into that, right? Oh, we should move on the next two clips for this highlights episode, they relate to the theme of the environmental impact of economic activity, so we’re looking at environmental issues. And you know that if you’re a regular listener, you you’ll know that I speak with a wide variety of guests on the show, with a wide variety of opinions. I mean, often in stark COVID. Contrast in opposition, and this is certainly the case on environmental issues, or at least the issue of how much we should be concerned, how much we should sacrifice the economy, economic growth for protecting the environment. Of course, I think we all want to have a clean environment, and we want to protect the environment as much as we can. At the same time, we want to make sure we have a thriving, prosperous economy that keeps people employed, that provides high living standards. So there certainly is some trade off. So I’ve had, I had two really good conversations about this trade off, as I see it, this this year, at least two really good conversations. One of them was with Marion tupy, who’s a, he’s a senior fellow at the Cato Institute. So that’s a a leading economic think tank in the US. It’s, it’s on the well, you’d say it’s a libertarian or classically liberal. And Marion co wrote a very interesting book that came out last year called super abundance, and he has a very optimistic view regarding our impact on the planet. So I’m going to play a clip from my discussion with Marion earlier this year. Okay, so let’s listen to that. I’m very sympathetic to the argument about about super abundance. Can I ask? Is this a continuation of the work that Julian Simon has done is this because I see on your CV or your buyer, you’re part of something called the Simon project. Could you tell us what that is and whether this is continuing his work? Yes,

Marian Tupy  32:15

yes. Yes, absolutely. So Julian was a, obviously, a huge inspiration, but so he was actually a senior fellow at Cato before I joined the Cato Institute. He died in 1998 but he was senior fellow there, so we never met. But what I wanted to do back in 2017 is to look at his work and update it, you know, to the present and I found that his bet with with Ehrlich, he would still win. In other words, commodities continued to get cheaper, at least the ones that Julian looked at. But I was using the old methodology. I was just looking at real prices of commodities. And my co author, Gail Pooley, got in touch with me, and he says, well, let’s turn them into time prices. Let’s look, let’s look at the price of commodities relative to wages, how much more you can buy for an hour of work than your ancestors could. And then we published a paper in 2018 with this new methodology. And indeed, we found, once again, that Julian was right. And then we decided to turn into a book which goes back to 1850 and basically what we find is that commodities, relative to wages, are constantly getting cheaper. If it’s a long enough period, everything is getting cheaper, including gold. The only thing that continues to become more and more expensive over the centuries is human labor, essentially the human input, and we might as well talk about Simon and early quag, yes,

Gene Tunny  33:46

yes, yes, yeah, please.

Marian Tupy  33:48

So Julian Simon, since we mentioned him, he was an economist at the University of Maryland, here in the United States, and he was basically looking at the data, and he was noticing that things were getting cheaper, even though population was expanding whilst over in California, at Stanford University, Paul Ehrlich, who is still alive, he’s 93 years old now, was predicting doom and gloom. He was basically saying, you know, as population increases, we are going to run out of everything, and there’s going to be mass famine. And, you know, starvation of hundreds of millions of people. And so they had a bet between 1980 and 1990 on the price of five commodities, nickel, tungsten, tin, chromium and copper. And basically they made a futures contract for $1,000 and when the period came to an end in 1990 Ehrlich had to send a check for $576 to Simon, because commodities became 36% cheaper. Had Simon implemented our methodology, he would have won even bigger. He would have won by about 40, 42% rather than 36

Gene Tunny  34:55

very good. Okay, so. I must say, always do enjoy hearing or reading about that Simon Ehrlich wager, because it’s a reminder that we should generally be skeptical about predictions of doomsday. I mean, you know, certainly it could occur. I’m not going to be naive, but generally, I think, you know, we’ve got, you know, multiple predictions of of Doomsday, and maybe we should just think more rationally about these things than we are or than we have been. So I thought that was a very good clip. So really grateful for Marion his appearance on the show. I think Darren Brady Nelson connected me with him. So thanks to Darren. And yes, I’ll put a link in the show notes for that episode too. Also, having listened to that, I was reminded, I’ve been reminded that I did a podcast episode, or I recall I was on the principle of charity podcast, which is hosted by Emile Sherman, who is a very distinguished film producer. He produced The King’s Speech and lion. And also, I was surprised to see the other day, I was watching one of my favorite new shows, which is on Apple TV, slow horses, the show about MI, five agents in in London with Gary Oldman, love that show, and Emile is one of the executive producers I was on his podcast. So Emil hosts that and also Lloyd vogelman. They have a really interesting show. They like to have guests with opposing point of views, points of view, and the idea of the principle of charities you’re supposed to, you know, steel man, the opponent’s argument, or under try to understand where they’re coming from. So have a good, you know, think that have the go into the conversation, assuming they’re acting in good faith and give them the respect that they deserve. And so look, I think it’s a, it’s a novel concept for a podcast, given how most podcasts are, so I think it’s, it’s interesting. I’ll put a link in the show notes so that that that was a conversation on degrowth. And, yeah, that was something that, yeah, that yeah, that was an interesting experience that I had earlier in the year. So I’ll put a link in the show notes to that, right? Oh, now for someone with a different take on how we’re we’re going environmentally and going to Well, the the other guest I’m going to feature in this highlights episode is Daniel vert Daniel lossy from Vertis group. And Daniel is based in Omaha, Nebraska, and that becomes highly relevant, as you will notice in this in this clip that I play, and I really enjoyed talking to Daniel, his company does a lot of very interesting work. So they work with organizations such as Seattle Aquarium, and they’re helping to make those organizations more sustainable, helping them meet their or get on the path to meet their net zero goals? So he’s someone who’s a practitioner, and I thought he had a lot of really valuable insights. Okay, so now I will play a clip from Episode 242 helping Seattle Aquarium and others go to net zero and beyond. So that’s from May this year. I hope you enjoy this clip. Before we go, I’ve got to ask given you’re in Omaha, and this is a economic show. Do you ever see Mr. Buffett around town? Have

Daniel Lawse  39:25

I seen him? Personally, I don’t think I have, but I’ve been in one of his favorite restaurants before, where he eats pretty regularly. And you know, we host the Berkshire Hathaway every single year. So see all of the the tourists who come in for that, the shareholders who come in, and my wife owns a little tea shop, so that always gets a little bit more business during those Berkshire days. But I’ve not bumped into Warren myself. Personally, that’s

Gene Tunny  39:53

okay. I just Just thought I’d ask given when, when people hear Omaha, they’ll think that, you know, that’s often the. First thing, rightly or wrongly, people, people, people think of in their minds, particularly if they’re in economics or finance. So just sort of ask,

Daniel Lawse  40:08

well, on some levels, I think Warren’s actually a pretty sustainably minded person. We can argue lots of other things, but here’s the example. I drive past his house on a regular basis, right? He does not live in a gated community mansion. He’s lived in the same house, I think, for over 50 years, and he’s done some upgrades to it and at a few additions, but it is a very what I would call a modest house in a nice neighborhood of Omaha, but like probably hundreds of 1000s of people drive past this house and would never know it’s even his.

Gene Tunny  40:42

Wow. So the fact that

Daniel Lawse  40:44

he doesn’t go and just consume and build a big house because he has the money and he could, and I don’t, I don’t believe he owns that many homes, or second homes or third homes. He owns a couple different locations. But there are some people who have a lot of wealth, who own a lot of homes that they travel and vacation to. So in that regard, he’s making a sustainable choice by living in a in a modest house that he’s had for decades, and maintaining it and regenerating it. Perhaps we might, if we want to throw that in there, instead of tearing it down and creating something new and bigger.

Gene Tunny  41:18

Oh, it’s, that’s a good story. I mean, he’s embodying the, you know, the virtues, or the the the high point, or what’s the right word to describe it. He’s in, he’s embodied. He’s embodying those, the real great values of capitalism, or where it’s about saving and investing. So, so that’s terrific. Good last. Yeah, make it last. Good on Warren Buffett, very good. Okay. Daniel Lawson, this has been a great conversation. Any final points before we close?

Daniel Lawse  41:49

I love your questions. Gene, I think it’s so important to be aware of how we think, because it really does matter. And there are four critical shifts that I see at play, and all the sustainability work that we do, and I’ve talked about, probably all of them, but shifting our mindset from a closed system to an open system, right? We’re not alone in this world, and so let’s acknowledge the impact that other organizations and communities and businesses have on us, the shift from like this mechanistic worldview to a living and dynamic world, view like Change is the only constant thing in life, and when we recognize that I’m a living being, and organizations are made up of humans, so we’re more living. We’re more like a garden that needs nurturing and tending than a business as a machine that you just take a part out and replace it, right? Let’s, let’s humanize our organizations instead of dehumanize them. The third is the shift from really feeling like and thinking like we’re separate from everybody else, and shifting more to this interconnected way of being, recognizing that my actions have impacts on you, whether intentionally or not. When we do an organizational policy, it can shift things in good ways, unknown ways and unknown ways. And then the last one is the short term thinking, the long term thinking. I’ll end with this. The seventh generation principle comes from the Iroquois nation, the first peoples of the US or of North America. I apologize, and they said the decisions that we make for our community, we need to think about, what is the impact going to be on seven generations, which, you know, it’s about 150 years. You can’t even predict that far out, but it forced them to think about, what’s the long term impact of the decisions they made at Council. And I, I challenge your listeners to imagine a world where their elected presidents, council members, representatives, didn’t think about the next election cycle and being re elected, but thought in seven generations, what would be different? Yeah, and what would be different if our business leaders weren’t thinking about quarterly profits, short term feedback loops, and instead thought forward seven generations, what? How different would our businesses look, and how different would our communities be if we had leaders who were thinking in seven generations, changes everything in, I think, pretty good ways.

Gene Tunny  44:10

Okay, so that was Daniel lossy, who is the Chief century thinker at Virtus group in Omaha, Nebraska. So they do environmental consulting work all over the US. So yep, I’ll put a link in the show notes to that episode. I think it’s definitely worth a listen. And I think Daniel has some Yeah, really interesting. And yeah, really interesting, interesting perspectives that make me think and Yeah, certainly saying things that that are challenging to economists. Okay, final clip, this episode and this. This clip is from the episode that a. According to Spotify wrapped. So Spotify wrapped is the summary that Spotify puts out every year, and it’s actually what inspired me, in a way, to do this episode. According to Spotify rap, the most listened to episode of my show in 2024 at least on Spotify, was episode 236 the housing crisis in and immigration Australia’s tough choices with John August. So it, it may well have been the most listened to episode because John’s very good at sharing and, you know, material, and he’s got a good network. John has a radio we had a radio show in Sydney on radio Skid Row in Marrickville, and he’s heavily involved in the Pirate Party. And I’ve had John on the show several times, and if you’re a regular listener, you’ll probably appreciate that he always has very interesting and well thought out things to say. So he no longer has a radio show. He’s had to step back from that and but, but he’s will still be able to hear from him. Next year, he’s going to be putting out a podcast, and I look forward to catching up with him, either on this show or on his new podcast. So once I find out more about that, I’ll, I’ll pass on the details. Right? Oh, the clip I’m going to play is, again, it’s from this episode that on housing and immigration. And these are really big issues in Australia at the moment. I mean, we had that huge surge in immigration post COVID And there’s a lot of debate about, to what extent is immigration driving the housing crisis that we’ve had? To what extent is immigration behind the the economic challenges we face? And there’s a lot of talk about the per capita recession, the decline in household living standards. So yep, if you’re in Australia, you’ll you’ll be well aware of this debate. And I suppose it’s a debate that is occurring in in many, in many economies around the world. And certainly immigration was was one of the issues that that swung the election in Trump’s favor. That was the view that Darren expressed on my show, and I’ve heard others express that too. Okay, so let’s play the final clip, and this is from my conversation with John August on housing and immigration.

John August  48:06

Well, keep in mind, I think I’ve already said this, that I do not believe that, you know, just reducing immigration is going to be a magic one. We have to, in some sense, aggressively pay catch up on our infrastructure. And another thing I’ll point out is, I don’t know what it’s like in Brisbane, but certainly in Sydney, you’ve got the issue where you’ve got the rich suburbs, and the people who are like the nurses, the fire is the police officers, the people doing cleaning, the people doing whatever. Can’t afford to live there, so they’ve got to basically travel all the way across Sydney, and they’re putting a needless load on the road network that doesn’t really need to be there. And for the rest of us that are not in that situation, we’re obviously coping with congested roads. So you know, for me, that’s a side effect of that sort of asymmetric wealth distribution. And one of the things that may be happening in Brisbane, I know some councils in Sydney are looking at getting into public housing, not in a grand sweeping way, but key worker accommodation. This is, this is accommodation that will be there for the police officers and their families, for the nurses and their families, for the fireies and their families, and perhaps for the cleaners and their families that are actually servicing that area. And, you know, you’ll basically have to say, look, either I have a job or I will be getting a job in the area, and I’m in one of these professions, so the council will then give you some subsidized place to live. And, you know, that’s interesting, that councils are even contemplating doing that. I mean, I mean, I guess this is a, this is sort of a guess. It’s a bit of an issue around infrastructure and housing. I guess a few steps from New from your original question. But never mind. Can’t help myself.

Gene Tunny  49:49

I can understand the logic of it. So I’ve seen that in in rural towns in particular. So you’ve got a visited a potato process. Facility in one of the Riverina towns, and they actually own some houses in the local town, so that they’ve got places for the I think, you know, the migrant workers who come in to work at their processing facility, so they’ve got somewhere to live when they’re when they’re in the area. So I can see the logic of that and why it might make sense for some councils to look at that awesome. Well,

John August  50:24

I know that, you know, just traveling around country towns, it’s interesting when there’s some sort of development, and all the tradies have taken all the motels or or there’s some sort of running festival or something like that. You by golly, you know, you notice it when you, when you go to a country town thinking, Oh, this is just a quiet, sleepy country town. There’ll be lots of vacancies at the motel and, well, there aren’t anyway.

Gene Tunny  50:49

That’s very true. Okay, I want to go back to those numbers. So migration program. So there are in the permanent migration program. So remember I talked about how our net migration has been running at about 550,000 Okay, the permanent Migration Program, which is what you’re talking about, which is refugees, or the family reunions and skilled migration, that’s set at 190,000 places. So that’s just a fraction of the total net overseas migration, and a big part of it are students over foreign students come in universities. And also the, you know, students who stay on, they get an extension, so they do a degree, and then they stay here for a couple of years after that. And you know, some of them will have work rights, and they’ll be, they’ll be in our labor force. So I’ll end you know, a lot of it is that, and so we’ve got this big temporary migration number. So I’ll put a link to Leith post in the show notes, because I think it’s a nice summary of all of the relevant data. We’ve got around 700,000 student visa holders in Australia, but in terms of temporary visa holders. So that could be students, their families, people who are who did a degree, and then they’re still staying here. That’s at, is it 2.2 to 2.4 million people? So depending on whether you use the so there’s a quarterly, seasonally adjusted number, that’s about 2.3 million. It looks like. And I’ll put that in the show notes. So is

John August  52:23

that that at the moment, or per quarter, or per year, or what do we what are we saying here? Yeah,

Gene Tunny  52:28

that’d be at the moment. So that’d be the stock of them, yeah, at a point in time, yeah, yeah. And so we’re well above where we were at COVID, and you could argue that we’ve actually, you know, so some of the people will say, Oh, actually, it’s just catch up and we’re just on the same trajectory. Okay, maybe so. And this is something that Leith addresses here, and his his point is that, well, okay, this, this argument. The he refers to a tweet from a bull. Is it a bull Rizvi, who was a former immigration bureaucrat, where he was saying, Oh, look, we’re just we’re actually where we would have been if we were on the same trajectory pre pandemic. And then so Leith goes risby arguments ridiculous, because the pandemic completely constipated the supply side of the housing market by sending material costs through the roof, sending builders bus so you were talking about this before John and reducing building capacity by months of lockdowns, deliberately engineering a record immigration rebound into a supply restricted market was the height of idiocy, and is why we are suffering from the worst rental crisis in living members.

John August  53:37

Well articulated position, I suppose I’d have to think about it much more carefully to say, look, is it right or is it wrong? But it sounds very reasonable on the face of it. You know, prima faci is the legal people would say. But my broad position would be, look, we were playing catch up on infrastructure before, if we’re actually going to get some breathing space, we’ve got to have a commitment to catch up on infrastructure at the same time as we limit immigration, so we can actually get ahead of the curve. Because I think a lot of this, this silly bugger games of like, here’s a development will divert some of the benefits from that to building infrastructure that’s not getting ahead of the curve. And like, look just a bit of an anecdote from like, history of Sydney is way back when our first rail lines went out of Sydney to service the farmers, okay? And that was why they were built. So if you wanted to build a settlement, you know, 10 or 20k is out of out of the city center, or what would have then been the city center, you just build a railway station on some part of the railway track, and boom, boom, there’s the start of your community, your infrastructure has led your community, rather than the infrastructure coming sometime later, based on some deferred payment schedule, you know? So you know where, where? Yeah. I mean, Lisa van Olson may well have a good point. I’m not going to disagree with it, but my position is we were paying catch up. Four, and if we’re going to be serious about playing doing actual, proper catch up, then we can’t just do business as usual like it was however many years ago. So, but, but, yeah, he may well have a good point there.

Gene Tunny  55:13

Okay, so that was John August from my episode on housing and immigration. So yep, if you liked what John or I had to say in that clip, then Yep, and you haven’t listened to that episode, then please check it out. Okay, so as you’ll as you’ll gather. I mean, we cover some fairly controversial issues on this show, and I appreciate that you know these are issues that people may well have different views from me on, and I’m happy to hear other opinions. Happy to hear your perspectives on these issues. So yep, if you’ve got any any thoughts positive or negative, or get in touch. Let me know whether you agree, whether you disagree. What do you think about these important issues that we’ve covered today, so issues or about the environment, about housing, immigration, the gender pay gap and the US budget and what the return of President Trump means for the US and for the rest of the world. Please feel free to get in touch. You can email me at contact, at economics, explored. I’d definitely love to hear from you. I want to know what you’re interested in. I want to know how I can improve the show so I can continue this go. I can continue the show. I can make it even better and make it make it a really strong show. In 2025 so we’re, we’re getting very close to the new year, right? Oh, again. Thanks for listening. I hope you enjoy it, and I hope to catch up with you in a future episode. Thanks you.

Credits

Thanks to the show’s sponsor, Gene’s consultancy business, www.adepteconomics.com.au. Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts and other podcasting platforms.

Categories
Podcast episode

The Gender Pay Debate: Understanding the Factors Behind the Gap w/ Dr Leonora Risse – EP230

This episode of Economics Explored analyzes Australia’s new gender pay gap data reported by large companies. Are the data useful or are they nonsense, as some critics have alleged? Host Gene Tunny interviews Dr Leonora Risse to discuss the methodology, findings, and criticisms of the report. Risse provides context on factors influencing the gender pay gap, like occupational segregation. Tunny and Risse also debate the impact of societal norms and long work hours or ‘greedy jobs’. While acknowledging limitations, Risse argues the data highlights the need to address remaining gender inequities. 

Please get in touch with us with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored

You can listen to the episode via the embedded player below or via podcasting apps including Google PodcastsApple Podcast and Spotify.

About this episode’s guest Dr Leonora Risse

Dr Leonora Risse is an Associate Professor in Economics at the University of Canberra and a Research Fellow with the Women’s Leadership Institute Australia and serves as an Expert Panel Member on gender pay equity for the Fair Work Commission. She formerly held roles with the Women and Public Policy Program at Harvard University, the Australian Government Productivity Commission, and RMIT University. She earned her PhD in Economics from the University of Queensland. Leonora is a co-founder and former National Chair of the Women in Economics Network (WEN) in Australia.

What’s covered in EP230

  • Introduction to the Episode and Topic (00:36)
  • Overview of Gender Pay Gap Data Reporting (02:59)
  • Calculation and Implications of Gender Pay Gap Data (04:48)
  • Insights on Compositional Factors and Industry Dynamics (16:28 & 16:41)
  • Critical Analysis of Gender Pay Gap Reporting (33:29)
  • Claudia Goldin’s Work and Nobel Prize Discussion (41:02)

Takeaways

  1. The new gender pay gap data reveal significant disparities across companies in male and female median earnings, with factors like occupation and industry composition playing crucial roles.
  2. In Leonora’s view, transparency in reporting pay gaps is crucial for raising awareness but also poses some risks of normalization and misinterpretation.
  3. Leonora argues societal norms and gender biases significantly influence occupational choices and bargaining power, contributing to the gender pay gap.
  4. Future research and data analysis are essential for understanding the drivers of the gender pay gap. 

Links relevant to the conversation

Link to WGEA Data Explorer (can look up each company’s pay gap and other gender equality statistics)

https://www.wgea.gov.au/data-statistics/data-explorer

Leonora’s Twitter exchange with Senator Matt Canavan:

https://twitter.com/leonora_risse/status/1762395543366717877?s=20

Gender wage transparency and the gender pay gap: A survey

https://onlinelibrary.wiley.com/doi/full/10.1111/joes.12545

Do Firms Respond to Gender Pay Gap Transparency?

https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.13136

Pay Transparency and Gender Equality

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3584259

Claudia Goldin

“Career and Family: Women’s Century-Long Journey toward Equity”

https://press.princeton.edu/books/hardcover/9780691201788/career-and-family

Leonora’s book review in Economic Record (copy attached)

https://onlinelibrary.wiley.com/doi/epdf/10.1111/1475-4932.12716

 Leonora’s Conversation article on WGEA pay gap data

https://theconversation.com/qantas-pays-women-37-less-telstra-and-bhp-20-fifty-years-after-equal-pay-laws-we-still-have-a-long-way-to-go-223870

Transcript: The Gender Pay Debate: Understanding the Factors Behind the Gap w/ Dr Leonora Risse – EP230

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Leonora Risse  00:04

The risks and opportunities of publishing pay gaps transparently. It does come with potential risk of misinterpretation. It even comes with the risk that some people some employers might look at this list and go you know what? Yes, our gender pay gap is pretty bad but so are all the other companies in our industry and it normalises it and it legitimises going, you know what we’re not that out of step as it is?

Gene Tunny  00:36

Welcome to the economics explored podcast, a frank and fearless exploration of important economic issues. I’m your host gene Tunny. I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode, please check out the show notes for relevant information. Now on to the show. Hello, thanks for tuning into the show. In Australia, big companies have been forced to disclose differences between male and female median earnings. The Australian Workplace Gender Equality agency published its first set of gender pay data in late February 2024. And these data have prompted a fierce discussion. Do they show a real gender pay gap that we should be concerned about? Or are the figures nonsense as some prominent critics argue? Joining me to discuss the data is returning guest Dr. Leonora Reese, Associate Professor in Economics at the University of Canberra. She’s a research fellow with the Women’s Leadership Institute Australia, and she serves as an expert panel member on gender pay equity for the Fair Work Commission. Previously, Leonora has held roles with the women and public policy programme at Harvard University, the Australian Government Productivity Commission, and RMIT University. Leonora is co founder and former national chair of the women in economics network in Australia. As always, please let me know what you think about what you hear on the show and about ways that I can improve it, including suggested topics and guests. Right? Oh, we’d better get into it. I hope you enjoy my conversation with Dr. Leonora Reese on the gender pay gap. Leonora thanks for joining me again on the programme. Thank you, Jane for having me. Oh, of course, it’s a big week in your field of research, which broadly is, am I correct in calling agenda economics? Right. Okay, great. Because there’s been a really interesting report that’s been published by the Workplace Gender Equality agency, which is an Australian government agency, and it’s on the gender pay gap. And what it does, it reports the gender pay gaps for one of the largest companies in Australia. Can you tell us a bit about it, please?

Leonora Risse  02:59

That’s right. So this is new data that’s now been publicly released. It’s the gender pay gap for all private companies in Australia that have at least 100 staff. So this is not just a sample, this is every large company. And they have to report this data to the agency to Weijia. Anyway, and this is the first year that this data is now publicly available. Previously, companies could voluntarily share this data, they could share the size of the gender pay gap. Now it’s mandated and that came about through reforms to the Workplace Gender Equality Act. And the idea is that this transparency, this openness of information, is designed number one, to raise awareness and attention and get people talking about the existence of the gender pay gap, which I think has achieved, we’ve ticked that box. And then secondly, to really focus attention on what do we need to do to narrow this gender gap? And how do we understand the drivers behind it? Yeah,

Gene Tunny  04:10

look at certainly started a conversation and in terms of reports of data, so economic or financial data, I can’t think of many others that have generated so much discussion and debate and, and controversy and really strong opinions as this one. So it’s, it’s been quite extraordinary. I must say that. So you, you mentioned private companies. Do you mean companies in the private sector? Is it publicly listed companies traded on the stock market as well? Or is it

Leonora Risse  04:41

I think it’s to the exclusion of the public sector that doesn’t include the government but they have other reporting? Right?

Gene Tunny  04:48

Okay. So it’s the largest companies in Australia and they’re required to disclose this gender pay gap and how do they calculate this gender pay gap? Yeah, so

Leonora Risse  04:59

there are various Ways to calculate the gender pay gap, although most, most of them you still see this, in fact, all of them, you still see a gender pay gap. What this particular data is based on is what we call the median. So like the midpoint of salaries that men are earning in a company, compare that to the midpoint, the median of what all women are earning in a particular company. So within the company comparison, if people are curious to know, what is the median compared to the average, the median is a way of controlling for some of those really extreme values, like very, very large values that can skew or distort the data. So we control for that. So you can’t say all this data is being pushed off or distorted by some extreme values, because statistically, we try to control for that this data also does not include remuneration of CEOs. That will be coming in future years. So it’s not being skewed by say, an over representation of men at CEO level. And it is disaggregated or so according to male concentrated industries, and female concentrated industries, and more what we would call more gender balanced industries. And what we see is that it’s in the male concentrated industries, where this overall gender pay gap seems to be the widest, you asked also how its measured. So this is annual salaries. And it’s includes full time workers, of course, but it also factors in, say, part time workers by working out what would be the annualised equivalent of those work. So it’s not skewed towards, you know, still just a segment of the of the workforce and excluding part time workers as well. Yeah. So

Gene Tunny  07:00

if you’ve got somebody who’s working for simplicity, they’re working half time, they’re only working two and a half days a week, then you would double their, what their earnings are to get a full time equivalent earnings. So

Leonora Risse  07:15

effectively, yes, yeah. And also a real added bonus to this data is that you, you have base salary, so you know what your standard salary would be for the year. And then it also includes a calculation which they’re calling total remuneration. And that’s where you factor in overtime payments, bonuses. Extra commission, for example. And when we factor that in, that’s when the pay gap tends to the gender pay gap widens even further, that extra layer of information. And

Gene Tunny  07:49

so it’s reported as a percentage. So one one that stood out to me is and was widely reported Jetstar, so the budget airline carrier in Australia, that makes huge amounts of money flying Australians to barley, among other places, 53.5% pay gap or something like that, if I got that right. Now, this is where I want to get into a bit of, you know, we, it’d be good to sort of ask, I’d like to ask you about the methodology and to what extent is, is giving us reliable estimates. Because like, that must be, that must be because pilots are disproportionately male, and the cabin crew is disproportionately female. So there are compositional issues there that will make it you know, when we interpret this data, we have to consider those sort of things. So yeah, I’m keen to get your thoughts on that. And also what really stood out to with this data, what do you think it really tells us? What are the highlights? What can we read into it?

Leonora Risse  08:51

You’re exactly right, Jane, that this number, this percentage, reflects a combination of different factors that feed into that. And one of those factors is the composition of the workforce within a company. So I’ve heard many people give the example that the aviation and airline industries tend to be characterised by on average, having more men in the roles of pilots or engineers, which tend to be higher paying roles, and proportionately more women, say in the administration or flight attendant roles, which tend to be relatively lower. So I think that’s great that people have picked up on that because yes, that’s one of the reasons there’s different composition. And instead of saying, well, then there’s no such thing as the gender pay gap that gives us reason to pause and think, Well, hang on, why do we see such stark gender patterns exist? Why aren’t more women being attracted into or working their way into into pilot roles? Why aren’t more men attracted to being a flight attendant so that already starts prompt us to think how are those factors conditioned by societal norms, gender biases, gender stereotypes, gender barriers to women going into fields that are traditionally male and vice versa as well. But then that compositional effect we know from other research, academic research that people like myself and many other economists in the field have carried out is that that’s not your complete explanation. So we use other data sets. And I think, over time, we’ll be able to dig deeper into this big data set, because the beauty of it is that he collects a whole bunch of other information about all these companies where we can plug that into our models and start to decompose, we’ll unpack and use decomposition analysis to figure out what are the contributing factors. So you might still see that even in the same sort of occupation, where you have men and women, so for example, say university lecturers, we know there are still pay scales, we know there’s still opportunity for some university lecturers to negotiate for a slightly higher pay, very high pay, then, then others. Because there’s still room for bargaining, there’s still room for negotiation, even if your job description on paper is the same. Often that’s perpetuating an existing salary that someone brings from a previous employer. So they say, This is what I was paid at my previous organisation or my, my previous company, someone might put that forward as that their their case for saying, This is why I should be paid more than my colleague, because this is, this is what I’m worth, if you need to attract me to this role, this is what you’re going to have to pay me not saying that’s valid or legitimate. But that’s some of the everyday realities of how these these gender nuances factor in. And it also speaks to the cultural norm or the societal expectation that it’s more legitimate for men to be more assertive in bargaining more so than women. And it’s very well to say, women, you just need to be more confident when you when you bargain, or, you know, put your facts on the table and say, I deserve a pay rise. But what’s really fascinating is that the research, including behavioural research in this space suggests that that can still be a really risky approach for women, because it’s not a society as societal norm that women demonstrate that behaviour. So it’s it doesn’t always work. It can backfire. Yeah,

Gene Tunny  12:43

I think we chatted about that in a previous episode. I might link to that because I thought that was a good conversation where we went over some of those factors. Can I ask you about some particular companies now? Hopefully, I got Jetstar. Right. Look at what please do just in case, because I don’t want to accidentally defame Jetstar and then have them sue me. But yeah, but I guess this does raise public relations issues for companies and some companies must be pretty annoyed at what the findings are. So that’s a median gender pay gap on base salary for Jetstar group are 53 and a half percent. And now we’ve got a median gender pay gap for total remuneration of 43.7%. So that’s when they factor in is that bonuses or overtime, then that narrows a little bit? Not, you know, it’s still it’s still significant. And it’s got to do with those compositional issues? Or, you know, that’ll that’ll be a big part of it. What are some of the other companies that stood out to you, Leonora?

Leonora Risse  13:41

Oh, I think you’ve got to have good reason to pick on one company than another. But I look at one observation, I think, is that there weren’t there weren’t really big surprises. For me, I have to say in this data, like we’re aware that there are some quite extreme gender pay gaps amongst some of these companies. I think it was to be expected that in some of these traditionally, male companies like transport and Postal Service’s warehousing, that suppose some of those gender pay gaps are quite stark, because it’s, it’s, it’s harder for women to work their way up the ranks in those companies. But then you also see these gender pay gaps still exist across even female concentrated fields like health care, social assistance. So it’s still it’s still pervasive across all of these, all of these industries. I do see some commentary. I think Dan zippers article on the ABC pointed out that some of these companies that have very large gender pay gaps are companies that perform ought to be being supported or catering to the female client group. You know, they they gave the example of some fashion retailers that, you know, really specialised in producing products for women, and yet they have this big gender pay gap. So that’s goes to show I think that some companies, it’s not all what it seems to be. And especially with the International Women’s Day coming up, I think what would be great is if you see companies that are saying, Yes, we support gender equality, and we’re having an International Women’s Day event will go and check their gender pay gap and see if the rhetoric stacks up with, you know, what are some of the dynamics in their company? Again, you don’t know, we you can’t make judgments just based on that pure number, you want to sort of go under the hood and figure out what’s going on? Is that compositional effects is that is there pay inequity. But all the companies also have the opportunity to provide what’s called an employer’s statement on the Wiggio website. So they’ve got a voice to then explain. This is why we have this percentage pay gap that you see. And it’s also a platform for them to explain what actions what policies, what new strategies they’re going to implement, to do something about it.

Gene Tunny  16:28

Okay, a couple of things. I’d like to pick up on there or ask about that. Company. You. You mentioned, the athletic leisure wear company, that’s Lorna Jane. I imagine

Leonora Risse  16:41

that’s the one that was mentioned. Right? Yeah. Dan Zephyrs article. And I think

Gene Tunny  16:46

I saw they had a law firm, did they have their lawyers say, if you’re going to talk about us in this regard, you’ve got to bake, you’ve got to provide the context or whatever. I’ll try and find that article and put it in the show notes. Right, I

Leonora Risse  16:58

think, I think it’s an example of companies feeling the pressure, which is partly what the intention was of these new reforms is to put the onus on companies to at least explain what’s going on and then try to take action. The whole logic behind this pay transparency is that companies care about their public perception. They don’t want to be caught out or perceived as being inequitable, presumably. And these reforms are meant to, I guess, prompt attention, but also give them a chance to explain and an act. So it sounds like you know, some of the ways that the companies have responded is a signal that they they do feel pressure, they are worried about reputational damage. And so the thinking is that that could be an incentive, I would like to also balance that by saying you do have a fair number of companies on this list that have a really narrow gender pay gap in some, and some have ones that are reversed the other way and are in favour of women. So we have examples of companies that are achieving gender equity in PE, what can we learn from those companies? What has worked? What is it about the culture or the practice or the industry characteristics that has given rise to these narrower gender pay gaps? And can we learn something from their experience that can be transferred to some of these worst performing companies? Or is there something really unique and an ongoing and particular struggle or challenge for some of these industries that have perpetually high gender pay gaps? What extra attention or investment do we need? So that these particular companies that are struggling can can improve over time so that how do we be constructive about this rather than just treating it as naming and shaming and like a punitive measure?

Gene Tunny  19:09

Yeah. Do you remember the high level figures? I might put them in the shownotes? Because is it about is it half of the companies have a gender pay gap, favouring males and there’s a like 30% or 40% that are sort of in where there’s no real difference statistically, and then there’s 10% that are if I got that wrong, you’ve got the figures, well,

Leonora Risse  19:30

they those percentages that you’re quoting yet that they are available, the numbers we’re looking at here. For a start, let’s give people a sense of what that reference point is. So a gap of 14.5% That’s the median across all these companies based on base salary, and if we add in bonuses, etc, then it widens to 19%. What we did in This article in the conversation as we calculated how many of these particular companies were kind of in the upper range the spectrum, right, so you’ve got almost 5000 companies on this spreadsheet on this list. So almost 1000, so around 20% have a gender pay gap that exceeds 20%. If we keep going further and further to the worst end of that, that list, 350 of them have a gap of over 30% gender pay gap of over 30%. And then you’ve got 100, at the worst end, where the gender pay gap is greater than 40%. You’ve also got quite a number of companies at the other end that have gender pay gaps that come negative. Yeah, it was, that was a little surprising as well, I guess, you know, in a good way, perhaps. But what we saw is these are particularly concentrated in Health Education and Disability Services where you have proportionally more women in those industries or those companies already, and therefore, your senior roles and more likely to be women. And also they’re just generally lower paid. So you might have a gender pay gap that mathematically comes out looking like women are being paid more, or in more of the senior roles. But compared to the other industries and sectors is an absolute sense. They’re all a bit lower. Yeah. So

Gene Tunny  21:31

they’re about 1000 companies. So that’s 20% of the 5000. And what you found is that they’re mainly in health education, Disability Services. So I’ll put a link in the show notes to that. And that’s getting to that point you were making. As part of like, there is value you see value in this data, because it can allow further research into what could be driving gender pay gap. So I’ll might explore that with you a bit in a moment. Because it just seems to me this issue of the composition is it’s a big deal, the, you know, the importance of the composition of the workforce. And I wonder if have they got enough warnings on this data? Do you think that they explained the data well enough? Do we shoot should this be up in lights, this is just, we’ve got a really simple, straightforward way of calculating this. There are all these other factors that are involved. So just be careful interpreting this data, give the maybe give the don’t sort of jumped to the conclusion that this company is discriminating against women. Is that clear enough? Or does that need to be clear? Look,

Leonora Risse  22:39

I think people’s reaction is a sign that they’re curious to know those answers. So companies can publish their their workforce profile, you know, in their annual reports, you know, they can publish this is this is the gender composition of, you know, our pilots or flight attendants, nothing stopping them from publishing that type of information either. And, indeed, Weijia does collect a lot of other data and statistics from companies that also reflect gender equality indicators, not just just pay. So it is in that data set, and I think, which is very research oriented and evidence based. So they will be looking to dig deep into that data through an analytical lens to you know, make sense of this. It means some of the policy implications could be okay, what are we doing in schools, and training to encourage more women will not just encouraged but support more women into aviation and airlines, and to ensure they thrive and succeed and feel respected and don’t don’t encounter sexism, which is, you know, currently still still an issue. So that in the future for these companies, they can say these compositional effects. We are acting on that, in terms of this, this pipeline, and also retention and career advancement. Of course, once once people are in the company. I think one one big takeaway, a positive takeaway from having this data out there is that we know that there’s a lot of backlash and resistance and scepticism, there’s no such thing as the gender pay gap. As someone working in this field. I hear that all the time. People feel like it’s not justified. It’s not it’s not warranted that you know, it’s against the law to pay women less than men. So really, this is all just an accounting trick. I heard that response in that comment, those comments and they flared up again, obviously, I think when you look at this data, this is these companies missing, saying yes, we have a gender pay gap, but the companies themselves are reporting This number. So you can’t really dismiss an argue and saying there’s no such thing as a gender gap in earnings basically, because the companies themselves now have publicly declaring that they do. So at least that gets us, you know, one step further along in this ongoing argument or case that we, you know, up till now, a lot of our time and energy is spent just simply trying to verify that there isn’t gender passion in earnings, a gender pay gap, partly due to composition, partly due to a whole lot of other factors. At least the companies themselves now are on record is reporting publicly, yes, this is the gender pay gap in our company.

Gene Tunny  25:47

Okay, we’ll take a short break here for a word from our sponsor.

Female speaker  25:53

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Gene Tunny  26:22

Now back to the show. So in terms of the criticism, so you you mentioned this, there has been some very strong criticism. And some of that has come from economists. So well, at least one prominent economist Judith Sloan commentator at the Australian former commissioner Productivity Commission. She has been on various boards. And she said that it’s nonsense. She thinks that it’s not comparing like with like soy, because you’ve got. So I’m just wondering, is there a way that they could do this? So it’s just not this one indicator where we’ve got these compositional issues? We’re not comparing, like with like, would it make sense to, like have a narrower, like habit for specific occupations or particular types of work in the company? Would that be? I mean, that could be a better way to do it. And it could be less controversial? Because I think it’s like, I like data. And I think this is interesting in terms of public conversation. This is it’s quite extraordinary. I mean, my mother’s actually contacted me about this, with her thoughts on it. So that’s an indication of how wide the reach. I mean, not that I mean, she does follow current affairs and all that, but usually she’s not getting in touch about the latest economic report. But this time she has because it certainly has. Yeah, it’s really gripped people’s attention more than any other report in recent times. So yes, I’m just wondering about that, whether there’s a better way they could present the data, or, you know, just more just make it clear. Yep. This is just be careful. Don’t read too much into this at the moment. We need, you know, you really need more data than this to make judgments.

Leonora Risse  28:15

Yes, look, this is the first year this data has been published. And even I put in a submission to the Workplace Gender Equality Act review, highlighting what some of the overseas experiences were about the risks and opportunities of publishing. pay gaps transparently. It does come with potential risk of misinterpretation, it even comes with the risk that some people some employers might look at this list and go you know what, yes, our gender pay gaps pretty bad, but so are all the other companies in our industry and it normalises it, and it legitimises going, you know what we’re not that out of step as it is, so we’re not that different from our competitors. So you’ve got all these potential risks around this. And I think you’ve you have articulated one there as well, but just with one number, people might dismiss it because they don’t feel like it adequately explains the whole picture, and therefore they disengage, and they put down and criticise the whole effort based on that reaction, so you kind of you kind of can inflame or agitate people because they might be a bit sceptical to begin with, or quite unsure. And this can push them just to disengage and spread rumours or misinterpretations or myths about inaccuracies and how to interpret the data. So I think you are pointing towards the fact that I think what people are searching for is a more complete explanation. That takes into account some of these compositional effects. That’s where economists come into the picture. So how do we how do we communicate I hate that in a way, and how do we build trust in the public to say, look, these methodologies, these analytical processes, they might sound technical, but you, you have to trust some of the way that we do this analysis, because we have rich data sets, like the Hilda survey that I’ve used previously, ABS data, where we can unpack and we don’t want to come up with ideologically driven inaccuracies in how we interpret it, that’s not really helping, because we’re not going to solve the problem if we, you know, diagnose this incorrectly. So, in terms of our role as scientists and evidence based and data driven, professionals, we have to treat this data, right. So I think the capacity is there to unpack it and to relay that interpretation and that story, to the general public and to decision makers and employers and employees. One example could be here is that, you know, there will be some employees of these companies that look at that data. And, and want to understand why there’s a reported gender pay gap of that magnitude, and want to understand what’s driving it. So should they be entitled to more pay? Or is it because they happen to be in the occupational category that’s relatively lower pay, I think employees deserve to have that type of explanation, as well, so they don’t lose morale. So they don’t feel underappreciated. Hopefully, there is there are opportunities where employers do pick up on where there are some gaps that can be can be narrowed. So I think it’s in the interests that we get the diagnosis. Right? Look, one thing I would also say with the analysis, and when when we run these econometric models, and we plug in all this data, what we can use are these decomposition tools that will tell you this is the component of that overall percentage that can be explained by industry confidence, or occupation, composition, or can be explained by that particular industry. Or it can be explained by educational background, for example, that’s something that works in favour of women, because they have overall average higher education levels. Something that is attributed. What part is due to more experience in the workplace and women on average, having more time out, we can actually get a grip on all of those percentages. I think where there’s also controversy is where people say, well hang on, is that, is that by choice? Or is that because of societal insufficient or cultural norms that that’s happened. So that’s another point of contention, where some very liberal thinkers will say, Well, yes, that can be explained by women going into lower earning occupations are spending time out, but that’s their choice or their preference. But then I think sociologists and other types of economists will, will contend that and say, No, actually, that’s not that choice isn’t made in a vacuum, that choice is made, because the full suite of opportunities, weren’t there for that, that person. So I think that’s another point of difference of interpretation.

Gene Tunny  33:29

So just to recap, is it true that the bulk of that gender pay gap can be explained in a way statistically, by differences in occupational choice or, or the industry, they’re working in educational qualifications, and there’s a small, just a small percentage that you really can’t and it’s

Leonora Risse  33:49

unexplained. Look, most of the time, what we try to do in these models is add more and more observable data and variables into the model so that the explained portion expands and that unexplained portion gets smaller and smaller. Now, some of the explained portion can still be interpreted as discrimination, and bias. So for example, you might say, Well, women are more likely to be in some of these care oriented professions, and then lower paid. And so that is one of the explanations for the overall gender pay gap. But then you might say, Well, hang on, what are the gender biases in society that don’t value that workers as much or that that still have gender norms and stereotypes that say that’s a woman’s job, right? So even if it’s explained, it doesn’t necessarily mean it’s free from biases and inequities as well.

Gene Tunny  34:52

Right? Okay. Yeah, yeah, yeah. Yeah, I understand the role of societal norms. And yeah, I think we chatted about that before. So I might put a link back to that conversation. I thought it was a good one. I want to ask about Claudia Goldin because Claudia Goldin, she won the Nobel Prize for Economics last year. Judith Sloan quoted her work in so in Judas article and Judas, because Judas is saying, Well, this is all nonsense, because this is just all yes, you’re not comparing like with like, it’s it’s all just explained by difference differences in composition, different choices people make, and she was interpreting Claudia Goldin to the students is interpreting 40 Golden is saying that the gender pay gap, it’s mostly due to the fact that there’s this premium for long and unpredictable hours and men are more likely to to work those jobs pursue that pursue those jobs, because women are more likely to be care as in they don’t have the Yeah, they, they’re more Yeah, they’re less likely to want to pursue those jobs like as as males, pursue them. So disproportionately, so what do you think about that? As a theory? I mean, what, because I think we’ve chatted about Claudia Golden’s work before or since the Nobel Prize was announced. So would you be able to comment on that, please? Sure,

Leonora Risse  36:20

absolutely. So, Claudia Golden’s. The concept that she’s coined here is, is greedy jobs to reflect these particular jobs in the workforce that demand a lot of you as a worker, to work long hours to be on call on weekends on late shifts, and to be rewarded for that. That’s the important part. So should be paid overtime rates to be fast tracked to promotion to get bonuses in reward for, for being, I guess, more available to your employer, I think it’s partly a symptom of capitalist society as well, you know, to really, to really draw as much of the worker that you can out in terms of their time, their loyalty, their commitment. And so the Claudia Golden’s work brings the gender dynamic into that this concept brings the gender Knight dynamic into that because the way that society and policy is structured is that it forces couples, if we’re looking at a male and female couple should make a choice with as a household as to which of them are going to be that particular worker and be on call, and which of them are going to attend to carrying responsibilities to household tasks at home. So collectively, they’re maximising or optimising their total income and trying to balance, you know, both both spectrums. So the way that gender norms give rise is that it tends to be on average, the male partner who will put their hand up for those greedy jobs. And females who, who would opt to, you know, be on call at home, basically. And so the gender pay gap widens, even on an hourly basis, because this there’s this premium attached with those types of jobs. And they’re rewarded, you know, it’s it’s seen as a positive thing in workplace culture. And so the, my, you know, the way that I interpret Claudia Golden’s work, and she articulates this, I think pretty clearly in her book, career and family is that unless you have gender equity at home, it’s very hard to achieve gender equity in the paid workforce. So as long as there’s some sort of gender division at home, you just don’t have that time availability in the paid workforce. So she’s actually advocating for, for gender equality, she’s not saying this rationalises or legitimises the existence of the gender pay gap, she says it’s a an explanation that needs attention. And that we should be looking at how do we look for ways to reduce this culture of expecting workers to be working such extensive hours and to be on call? How can they be more substitutable with each other, so you know, if you’re not available, it doesn’t matter because your colleague can step in. And she gives examples from the industry of pharmacy, the pharmacy industry where that that is, is a change in cultural practice, and that allowed more women actually to advance in that industry. So that, you know, the action or the policies that emerge from that are ones that start to address that existing inequity in the city. system and steer us towards something that’s more equitable. And I would say also healthier as well. Now, other people might interpret that differently. But I think that’s a very, very, you know, firm and widespread way of expressing Cambodia Golden’s work, I did write a book review of her book, and it’s published in the economic record. Yeah, I’d be very pleased for people to have a read of that and see what see what they think of the points that Claudia Goldin has expressed. And of course, yesterday, Jean, she was awarded the Nobel Prize in Economics, in recognition of decades and decades of work, looking at women’s participation in the workforce, and how that has changed over time, from an historical perspective, right up to contemporary time, so she is a big advocate and champion for working towards a more gender equitable economy.

Gene Tunny  41:02

Yeah, I have to read that book of hers. I read your book review and then read her book. She’s at Harvard, isn’t she? Correct.

Leonora Risse  41:08

She’s in the Harvard economics department. And I believe she was the first female to be tenured as appropriate and reach a professor status at Harvard University.

Gene Tunny  41:20

And you visited Harvard a few years ago. Did you did you get to meet Claudia Goldin? Yes,

Leonora Risse  41:24

that was an absolute highlight. Yes, absolutely. This was before she won the Nobel Prize. But even then, it was a huge honour. She was also very closely involved in the American economics Association’s women’s group, which is the equivalent of our women in economics, here in Australia, so we had a great conversation about that. But what was fascinating, I think, is that she has spent so much of her time and focus, telling this story of how women’s opportunities have changed over time. But effectively, they’re still not entirely a free choice. They’re still governed by, by policy, it’s governed by or shaped by technology. A great example of her work was the economic effects of the invention of the pill, the oral contraceptive, which really, you know, liberated women from a lot of it opened up more opportunities for them to control their their family planning and participate more fully in the paid workforce. So fascinating research over time that looks at what, what factors have shaped women’s opportunities in positive as well as negative ways?

Gene Tunny  42:44

Yeah, absolutely. I’m gonna have to read your work and try to get her on the show one day, for sure. Right? Oh, well, we better start wrapping up because I’ve, I’ve taken a lot of your time. It’s been it’s been really fascinating, good, good having this conversation and sort of delving into this and what it all means. And I think the way that you’ve, you know, you’re making me go beyond what the data, what the exact, you know, the data or just arts industry, its occupation, or think about what’s the other societal factors or norms that are leading to these occupational choices. I think that’s a good point. So certainly worth considering. on that issue of, you know, this greedy jobs, and I think this gets to what, why someone like Matt Canavan, Senator Matt Canavan, an old friend of mine, he’s a Senator for the conservative LNP party, Liberal National Party here in Queensland. And he’s come out very aggressively against this report. Matt’s been on the show before we had a chat about Net Zero. I’ll put a link in the show notes to that. And I think Matt was saying, look, the problem is that you can’t just scale up these jobs, like a point eight, you can’t just multiply it by one divided by point eight to get what the equivalent salary is, and then do a comparison because there’s that premium for the long and, and predictable hours. So that was, I think that’s what his point was, wasn’t it, but that he doesn’t think this exercise is particularly valid at all. And then you had a bit of an exchange with him on Twitter. So could you tell us about what that exchange was about? Please? Leonora? Sure.

Leonora Risse  44:23

So yeah, I mean, again, this is an example of this data, getting people talking, first of all, trying to understand the methodology, how were these gender pay gaps being calculated? So we get a grip on that, and it sounded like, you know, the way you’ve described it there, I think, was a good, good example of then people prompting, or is that the appropriate way to, to analyse this, this data? So I think on Twitter, I mean, I tried to use social media very mindfully and simply really to express what could be or to offer input to correct inaccuracies of interpretation just in the interest of public knowledge and public information is there something I can add so that there there is less risk of misinformation and debunking misinterpretations. So I pointed out, you know, this is the way the data is calculated, it does account for hours worked, it is annualised to a full time equivalent. So it does include people across the different hours spectrum. And it excludes CEOs, and it is calculators, medians, as I mentioned earlier, so we don’t have those statistical effects of extreme outliers. But then I think the way you’ve articulated it was that, you know, I guess Matt Canavan response was, Well, is that really how we should be going about it? Because if you’re working full time, does that mean that your contribution, even per hour is worth more than part time? That’s effectively I guess, one way to interpret it? I guess what he’s saying then is He’s agreeing with the greedy jobs phenomenon. And then that’s a question for all of us. So what is the greedy jobs phenomenon? Actually fair? And is it? Is it also reflective of productivity? Because if you’re working very, very long hours, is your productive value chain is a marginal decline? Is it actually worth more, as well? So you’ve got these other potentially offsetting rationale to think that maybe extra long hours, additional hours? Is that actually worth more per hour? This for hours? You know, so is there a premium? Is that premium justified? If people aren’t able to work more than part time hours, because they have care responsibilities, and so they miss out on that premium for overtime? Well, that will come through in the data. But then again, we should be questioning well, is that actually fair? Is that how we want society to function? Or can we restructure our policy so that if you have predominantly women who are working part time who aspire to work more hours, that can because effective marginal tax rates mean they actually take home less or they don’t have childcare places available? Or, you know, there are other carrying demands that it basically brings up a whole lot of other gender patterned inequities? I mean, what I would also say, I think the exchange with Matt Canavan online, also revealed, I think, some level of an underlying response, which was that we’re talking about masculinity norms coming undone. That there’s another there’s a deeper narrative here that the more that we try to advance women’s opportunities in the workforce, there will be some people out there whose responses? Well, there are still jobs that require physicality that’s associated with masculinity. And that’s worth more I think, I think some of the posts that Canavan posted could have been sort of along those lines, or has made allusions to people feeling that the gender pay gap or gender equity initiatives are unfair for Superman. And therefore that can, in his eyes, rationalise why men might look for highly masculinized icons and role models to gravitate towards for a sense of identity and solidarity. I think that’s potentially one interpretation of this undercurrent of reactions that was coming through,

Gene Tunny  49:01

right. Yep. So Matt, Matt suggested that reports like this could actually widen the gender divide, could actually lead young men to embrace Andrew Tate, for example. So I think that was the example

Leonora Risse  49:13

what is the conclusion he drew, but I think that’s a very, yeah, I wouldn’t enter into Logic.

Gene Tunny  49:18

Okay, I want to just want to go back on the greedy jobs, just so I characterise what Matt was saying, but the technical point he was making, so yeah, there’s the greedy jobs aspect of it. But there’s also the fact that if you’re full time, even if you’re just working 38 hours a week, or 40 hours a week, you’re more valuable, like say, compared with someone who’s only working half time, you’re actually more than you’re more than twice as valuable than that person, because you’re there all through the week and you can respond to the issues that come up and you’ve got continuity of the work so you’re more you can fit more into the the processes that are at play. You’re more reliable, you’re more diverse. In the world to upper management, for example,

Leonora Risse  50:02

I think that’s one party can go down based on that logic. I’m not sure if that if really, he was. He was expansive on that logic or based on on the Twitter post, but I think that’s, that could be one way of some people attempting to rationalise or legitimise why workers who work more hours in absolute terms should be given a higher pay rate per hour. Now, for some employers, that might be their logic, again, I would come back to is that really a measure of your true productive contribution per hour? Or is that a sense of some strategy for some employers to? You know, to really attract and retain and, and extract excessive time and energy from their employees and potentially, in an unsustainable way over time, if you’re working very, very long hours, if you’re always on call? Is that healthy and sustainable over the long run as well?

Gene Tunny  51:25

Possibly not I mean, that was one of the things i There are a lot of good things I liked about when I was working at Treasury. But one of the downsides was that you’re often always on call, depending on the area you’re in. So when I was in budget policy, for example, you were just always on call almost. And you you’d often have to come in on weekends work late at night, if the treasurer wanted a briefing or something. Yeah, it was, it wasn’t I don’t think it was, I don’t think

Leonora Risse  51:50

and also to Gene like, you can control for that in your model as well. So I’ve done analysis using the Hilda data for the gender pay gap based on hourly wages, and I put in a variable to control for overtime, and you still see an unexplained gender pay gap. Right.

Gene Tunny  52:07

Okay. I just finally, well, over time is this. This is both paid and unpaid overtime, because a lot of overtime. Maybe we can we can I can know,

Leonora Risse  52:21

in terms of the data that I’ve been Yeah, yeah. So it does ask, do you usually work more than I think it’s 50 hours, we’ll see it’s got all these different thresholds that you can choose. So you can put that in? And then of course, if you don’t control for that, then you are diluting your hourly wage calculation because you’re dividing by a bigger number. So you really have to control for that. Okay. Yes, yeah. But basically, I’m saying that even if you were to say and accept the logic that say, with the big data where we can’t use annualised full time equivalent, because there’s a premium associated with working sets of hours and overtime being on call, okay, if you want to buy into that logic, we can kind of control for that and adjust the calculations. Okay. It doesn’t, yeah, doesn’t explain away the gender pay

Gene Tunny  53:15

gap. Right. But this is where I think, yeah, yeah. This is where we need to use data sets like Hilda household income labour dynamics Australia, ABS data, to what extent does this do you think you can use this to to help improve the analysis? Or is this just a novelty? Or is this just something that, you know, makes the news? That is that is not really valuable for research and insights? What are your thoughts on this big

Leonora Risse  53:43

data set is one of the most valuable data sets? I would say internationally, right? It is a census. It’s not even a sample. It’s a census of all these companies. And we’re GIA collects a whole bunch of other information about these companies that can be plugged into an analytical model to conduct that type of decomposition analysis. So I know they have that research orientation, and they’re looking to conduct that type of research in the future.

Gene Tunny  54:14

Okay, well, I’ll look out for I’m sure you’re going to be analysing the data, you’ll be looking at the data, that can

Leonora Risse  54:21

be one of those researchers doing that, again, just to make sense of the data. There’s a lot of explanatory power in there. We use the analytical models to get under the hood. Okay,

Gene Tunny  54:33

good. Good. Finally, should have asked, Are we the only country that’s doing this?

Leonora Risse  54:38

Oh, good question. So my understanding is, no, there are a few other countries around the world. So a lot of this was informed by international experiences as well as that sort of gave rise to why these laws changed in Australia. So in the UK, they do it in Denmark. They do it could be a few other companies, but you know what, that’s where some of these lessons learned come from? So one example that I’m aware of is in the UK in universities, they had pay gap transparency. Yes, they saw the pay gap narrower. But mainly, by virtue of senior women negotiating for higher pay or leaving to go to a high paying employer, the junior women didn’t have the same sort of capacity to leverage that data or to bargain. So not all women, for example, can use this data. In Denmark, when they had pay gap transparency, they saw a narrowing of the overall gender pay gap through a slowdown in men’s wage growth on average. So it wasn’t because women’s wages accelerated and caught up. It was because over time, men’s ongoing wage growth, it didn’t go backwards, but it just didn’t go up as much. And so it meant overall, the wage bill for companies doesn’t necessarily go up because you saving maybe there was some men that you were paying more than what they said.

Gene Tunny  56:05

There hasn’t been a causal study of that, though, has there? This is just observation. This is Oh,

Leonora Risse  56:11

no, this is this is a proper academic journal study. Really? Okay.

Gene Tunny  56:15

I have to look at that, that I’ll have to look at the methodology to see how they draw that conclusion. Because it sounds like I mean, yeah, it’d be interesting if it were true. I mean, I’d be interested in seeing the methodology to just to check that, you know, it’s just not something that, you know, happened. I mean, the whole the whole post hoc, ergo Propter. hoc, as

Leonora Risse  56:33

in there could have been some external shock. Potentially, I think you always want to ask those questions. Yeah, sure. I think what was interesting was that it was yes, it was a narrowing, but it was because of this slowdown from men’s wages rather than accelerates it. So it shouldn’t just be expecting all women’s wages are going to catch up now. Yeah. And narrowing of the gender pay gap involves two moving pieces.

Gene Tunny  56:56

Right. Yeah. Okay. Well, you know, this has been great. I’ve really grilled you over the the geo data, and you’ve been doing great in answered a lot of my questions. And yeah, it’s been great to have you on the show. I think this is a very important topic. We’ve talked about it before. Other Any other thoughts? Anything you’d like to say to wrap up?

Leonora Risse  57:23

Open question there. I think I think you’re right, we covered we covered a lot here. I think the takeaway is so how do we act on this data in a constructive way, is to make sure we don’t put the onus on individual women to now go and get this data and expect them to rock up to their employer and say, I deserve a pay rise. Really, the onus should be on employers and companies to care enough about these pay gaps to want to at least explain it and do something about it. So that fix the system rather than fix the women is a recurring piece of advice that I think applies. In this context, if companies are asking or if you’re thinking, What can I suggest to my company? What should I do? What should we recommend that our company does? One evidence based strategy is to make closing the gender pay gap, part of your KPIs, your key performance indicators for your managers and executives. And that’s an evidence based way that really seems to get the ball rolling. Yeah,

Gene Tunny  58:34

yeah, that’s a yeah, that’s, that’s one thing that certainly could motivate the executives to pay attention to it for sure. I mean, I, I expect that for some of these companies, for jet staff or others that you look at the data and like, whoa, that’s, that looks like a much higher gap than I’d expect. you’d hope or Well, I think I would expect that they would have a board paper, the next board meeting, delving into it, trying to explain why there is this gap. Okay. Well, it’s because of the composition of the workforce, right? Yeah. So I think they’ll they’ll have to do

Leonora Risse  59:09

and one, one takeaway there is like, if we are going to judge companies, perhaps one way to look at it is which companies are improving the gender pay gap over time, so not just the absolute amount now, which in some ways might be slightly outside of their control. But if you look from one year to the next, which ones are narrowing, and getting better, in addition to other indicators, we should be looking at, like, other measures of safety and other things that matter for gender equality. So yeah, this is the first of a series of data points. And I think that indication of progress over time, could emerge as a more important indicator than a simple snapshot in time. Yeah,

Gene Tunny  59:55

yeah, I think that’s good point. Okay, Leonora thanks so much for your time. I really Lily enjoy the conversation.

Leonora Risse  1:00:01

Thank you, Jane for having me likewise.

Gene Tunny  1:00:04

Right. Oh, thanks for listening to this episode of economics explored. If you have any questions, comments or suggestions, please get in touch. I’d love to hear from you. You can send me an email via contact at economics explore.com Or a voicemail via SpeakPipe. You can find the link in the show notes. If you’ve enjoyed the show, I’d be grateful if you could tell anyone you think would be interested about it. Word of mouth is one of the main ways that people learn about the show. Finally, if your podcasting app lets you then please write a review and leave a rating. Thanks for listening. I hope you can join me again next week.

1:00:51

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Podcast episode

EP107 – Gender differences in negotiation and policy for improvement

Women tend not to initiate negotiations over pay and conditions as frequently as men, and this contributes to the gender pay gap. In Economics Explored EP107, Dr Maria Recalde from University of Melbourne explains what researchers have learned about gender differences in negotiation and potential policy responses which could improve outcomes for women, such as salary history bans and increased transparency.

About this episode’s guest – Dr Maria Recalde

Dr Maria P. Recalde is a Lecturer (Assistant Professor) in the Department of Economics at the University of Melbourne, Australia. My main fields of interest are experimental and behavioral economics, public economics, and development.

Links relevant to the conversation with Dr Recalde

Gender Differences in Negotiation and Policy for Improvement

The gender pay gap with Dr Leonora Risse

Gender and the Labor Market: What Have We Learned from Field and Lab Experiments?

You can’t ask this: the spread of salary history bans and what it means for employers

Links mentioned in Gene’s introduction relating to EP106

At an Overrun ICU, ‘the Problem Is We Are Running Out of Hallways’

Heartbreaking plea from ICU nurse: ‘Bodies are piling up’

Thanks to the show’s audio engineer Josh Crotts for his assistance in producing the episode. Check out Josh’s Upwork profile.

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.

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