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Keith Ellison is wrong: There is no ‘Pink Tax’

Last Friday, Minnesota’s Attorney General Keith Ellison tweeted

Except the ‘pink tax’ doesn’t exist.

AG Ellison’s outburst was probably generated by the mysterious fuss surrounding the news that high profile Rep. Alexandria Ocasio-Cortez (D-N.Y.) spent $260 on a haircut. And, true, I doubt I spend that much on haircuts in a year. At $20 a time, I’d need thirteen trips to the barbers annually just to match Rep. Ocasio-Cortez’ bill.

But this isn’t because there is some sexist ‘pink tax’ at work. It is because I buy a very different type of haircut from Rep. Ocasio-Cortez. Indeed, if she went into Great Clips and asked for a number three on the top and number two on the back and sides, she’d pay $20 as well. And, if I got a cut, color, and lowlights, I’d expect to pay more than the $20.

There are two things to take away from this.

Stop comparing apples with oranges

As with the equally mythical ‘gender wage gap‘, the ‘pink tax’ is simply the result of comparing different things. In the case of the so-called wage gap,

there are differences in the type of work men and women do, which bears on their earnings. BLS data shows that, in 2017, 94 percent of child day care services workers were female, the highest percentage of any category, and that the mean annual wage of childcare workers was $23,760. By contrast, just 2.9 percent of workers in logging were women, the lowest share of any category, and the mean annual wage here was $42,310.

It makes no sense to compare the wages of a female childcare worker and male logger and scream ‘Sexism!’ at the difference. They are doing different jobs so of course they earn different wages. In the same way, it makes no sense to compare my basic buzz cut with a cut, color, and lowlights and say that the latter is more expensive than the former because of sexism. It is more expensive because it is a different thing.

Not every difference is the result of an ‘ism’

Rep. Ocasio-Cortez could have walked into Great Clips, asked for a number three on the top and number two on the back and sides, and saved $240. She chose not to.

This, too, is like the ‘gender wage gap’. A recent study by Valentin Bolotnyy and Natalia Emanuel of Harvard University looked

at data from the Massachusetts Bay Transportation Authority (MBTA). This is a union shop with uniform hourly wages where men and women adhere to the same rules and receive the same benefits. Workers are promoted on the basis of seniority rather than performance, and male and female workers of the same seniority have the same choices for scheduling, routes, vacation, and overtime. There is almost no scope here for a sexist boss to favor men over women.

And yet, even here, Emanuel and Bolotnyy find that female train and bus operators earn less than their male counterparts. From this observation, they go looking for possible causes, examining time cards and scheduling from 2011 to 2017 and factoring in sex, age, date of hire, tenure, and whether an employee was married or had dependents.

They find that male train and bus drivers worked about 83 percent more overtime than their female colleagues and were twice as likely to accept an overtime shift—which pays time-and-a-half—on short notice and that around twice as many women as men never took overtime. The male workers took 48 percent fewer unpaid hours off under the Family Medical Leave Act each year. Female workers were more likely to take less desirable routes if it meant working fewer nights, weekends, and holidays. Parenthood turns out to be an important factor. Fathers were more likely than childless men to want the extra cash from overtime, and mothers were more likely to want time off than childless women.

In other words, the difference in male and female earnings at the MBTA was explained by those “so-called ‘women’s choices,’” which Hartmann and Rose so easily dismissed.

“The gap of $0.89 in our setting,” the authors concluded, “can be explained entirely by the fact that, while having the same choice sets in the workplace, women and men make different choices.”

Men and women, on average, make different choices. This leads, on average, to different outcomes. AG Ellison’s ‘pink tax’ is as real as unicorns.

John Phelan is an economist at the Center of the American Experiment. 

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