3 ms·

Greenspan didn't need to hold any belief about market behavior; all he needed to do was hire without discriminating himself. I'm not sure how you reach that hy

Greenspan didn't need to hold any belief about market behavior; all he needed to do was hire without discriminating himself. I'm not sure how you reach that hypothesis, primarily because there's no evidence that Greenspan's approach to hiring lessened inequality... Of course it did; every person he hired got a higher wage than they would elsewhere.

geofft 11y ago
> Of course it did; every person he hired got a higher wage than they would elsewhere. If you increase men's and women's wages proportionally, but are still underpaying women per unit work compared to men per unit work, I don't think you're lessening inequality. If you're increasing women's wages disproportionally, you're sabotaging your own arbitrage opportunity. (Maybe Greenspan thought there were more important things in the world than arbitrage.)
- yummyfajitas 11y ago
  Hardly - if women's prevailing wage is $80 and men's is $100 (for men and women of equal ability), and you offer $85 but don't discriminate, you'll disproportionately hire women and you'll reduce inequality by $5 x # of women hired. You can safely do this without holding any beliefs about ability distributions.
  - geofft 11y ago
    But isn't that strictly financially worse for you than hiring women at $80 + epsilon, unless you have an expectation that the prevailing wage for women will soon increase? That is - if your primary motivation is doing what is economically rational (e.g. arbitrage), not reducing inequality, why would you ever do this, unless you have a strong belief that the market is undervaluing women?
    - yummyfajitas 11y ago
      Because in the real world there are transaction costs and people don't shift jobs over epsilon=$1. See also efficiency wages; for a couple of extra grand you can get a lot of extra loyalty and goodwill.

3 ms·

Greenspan didn't need to hold any belief about market behavior; all he needed to do was hire without discriminating himself. I'm not sure how you reach that hy

by yummyfajitas 11y ago

geofft 11y ago
> Of course it did; every person he hired got a higher wage than they would elsewhere. If you increase men's and women's wages proportionally, but are still underpaying women per unit work compared to men per unit work, I don't think you're lessening inequality. If you're increasing women's wages disproportionally, you're sabotaging your own arbitrage opportunity. (Maybe Greenspan thought there were more important things in the world than arbitrage.)
- yummyfajitas 11y ago
  Hardly - if women's prevailing wage is $80 and men's is $100 (for men and women of equal ability), and you offer $85 but don't discriminate, you'll disproportionately hire women and you'll reduce inequality by $5 x # of women hired. You can safely do this without holding any beliefs about ability distributions.
  - geofft 11y ago
    But isn't that strictly financially worse for you than hiring women at $80 + epsilon, unless you have an expectation that the prevailing wage for women will soon increase? That is - if your primary motivation is doing what is economically rational (e.g. arbitrage), not reducing inequality, why would you ever do this, unless you have a strong belief that the market is undervaluing women?
    - yummyfajitas 11y ago
      Because in the real world there are transaction costs and people don't shift jobs over epsilon=$1. See also efficiency wages; for a couple of extra grand you can get a lot of extra loyalty and goodwill.