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Gender Matters

Mar 31, 2011 • Behavioral Economics, Businesses, Gender gap, Labor • 117 Views    No Comments

For years, female musicians said that they were being treated unfairly. The problem, they claimed, was audition bias. Many more men were selected for orchestras than women. The response was that the men were better. A Harvard and Princeton study found, though, that when an audition was gender blind, many more women were selected.

This takes us to Wal-Mart. Currently being heard by the Supreme Court, Wal-Mart v. Dukes involves a class-action suit in which Wal-Mart is accused of over-promoting men and underpaying women. However, before a trial court can decide whether discrimination occurred, the Supreme Court has to say whether a class-action suit can represent the 1.6 million women who have worked for Wal-Mart since 1998.

Commenting in Court, Justice Ruth Bader Ginsburg said that it was not “at all complicated…Most people prefer themselves. And so a decision-maker, all other things being equal, would prefer someone who looked like him.” The result? “Gender bias could ‘creep’ into the workplace.”

The Economic Lesson

For us, the key here is human capital. For an economy to grow and thrive optimally, the factors of production, land, labor, and capital, need to be appropriately allocated. When there is gender bias, women’s talents are underutilized and the entire economy suffers.

For an orchestra, we need the best musicians. Now, our court system needs to decide whether Wal-Mart promoted and paid its best people.

 

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