Low Gender-Pay Complaints Are An Admission of Subpar Talent

Real Clear Markets ^ | September 23, 2016 | John Tamny

[expat_panama]

"Yeah, you're a genius, everyone knows it, a goddamn genius, but that's why you failed as a head coach - that's why you'll never be a head coach ... some genius." Those were the words of head NFL coach Bill Parcells to then assistant, and at the time once-failed (with the Cleveland Browns) head coach, Bill Belechick. During a game Belechick had suggested a defensive scheme that Parcells rejected, only for Belechick to be proven correct. Parcells' irritated reply revealed a now dated view among some football types about Belechick; that while he was in possession of a brilliant defensive mind, he didn't have the skills to run a team.

Parcells' dismissal of Belechick came to mind recently with the release of a video by actress Kristen Bell in which she complained about the alleged "gender pay" gap between men and women. Much ink has subsequently been spilled about how Bell unwittingly exposed a huge profit opportunity for self-interested business owners: if in fact women are underpaid relative to their skills just because they're women, smart owners will snap them up only to reveal through success in the marketplace why women are underpaid.

Of course, that almost misses the point. While it's certainly true that discrimination in a meritocracy is expensive, the latter was proven won long ago. There are so many examples, but in 1970 a racially integrated USC Trojan football team traveled to Birmingham, AL to play the then all-while Alabama Crimson Tide. USC walked all over the Tide, and in doing so, forced a much more rapid integration of SEC football, and sports in general. Those that hire or promote based on gender or race, or who fail to do so based on same, will pay a high price for discriminating.

Seemingly the bigger story about Bell's mindless video has to do with the unspoken truth that those who complain about gender-pay discrimination are unwittingly admitting that they don't rate the supposedly equal - or greater - pay that they desire in the first place. In the real world, no truly talented person would seek coerced higher pay; instead, the skilled would reveal in the marketplace just why their pay isn't high enough through performance proving just that. In short, if women really feel they're underpaid relative to their male peers, they should express this truth in the free market.

A reply to the above view may well be that talented women lack the opportunities to prove their equal or greater worth. But if that's the reply, it can't be stressed enough yet again that such a retort blaming gender discrimination for supposedly slim compensation opportunities is an explicit admission of subpar talent.

Indeed, what's seemingly forgotten by the gender-pay gap crowd is that many of the highest paid males in the U.S. marketplace were similarly long discriminated against before ultimately proving their naysayers wrong. What's forever been proven true in the meritocratic markets is that really good commercial ideas, and really innovative processes, are frequently met with great skepticism - as in discrimination - in the initial stages. More specifically, the talented who ultimately rate enormous pay packages alongside great wealth usually only reach that point after being dismissed and discriminated against by the existing powers that be. Low pay and low treatment is not a gender thing.

Jeff Bezos founded Amazon.com back in 1994 at a time when there existed great skepticism about the commercial worth of the internet. Had the established powers of the business world taken this maverick seriously, it's a near certainty that business behemoths of the Wal-Mart variety would have quickly paid Bezos billions for his innovation; that or they would have feverishly begun copying him right away. In reality, Bezos pursued a retail empire rooted in online sales that was ignored for quite a while. Even though Wal-Mart had much greater resources at its disposal, it didn't use them to vanquish Amazon as a competitor. To this day Wal-Mart is still striving to equal or exceed Bezos on the e-commerce front; it's recent acquisition of Jet.com for $3 billion yet another admission from the big box retail giant that its early dismissal of Bezos (now one of the five richest men in the world) has proven quite costly.

Not too long after Amazon entered the marketplace, now bankrupt Blockbuster Video had the opportunity to acquire Reed Hasting's struggling online DVD rental service NetFlix for a tiny fraction of its present worth. Blockbuster's dismissal of NetFlix proved costly too; so costly that Blockbuster no longer exists. And rather than sit back and wait for another competitor to compete away its DVD rental profits, NetFlix proceeded to essentially put its initial source of great profits out of business in favor of movie and television-show streaming.

The late Steve Jobs introduced an Apple iPhone at a time when Palm and Blackberry were the undisputed powers in the smartphone market. The very notion of a $500+ device that lacked Blackberry's then advanced keyboard was mocked by smartphone experts, including management at then-powerful Blackberry itself. Jobs died after adding many billions to his net worth, but only after being dismissed by a company - Blackberry - whose products are presently vanishing before our eyes thanks to it ignoring a market evolution that Jobs plainly saw.

Back to Belichick, readers might stop for a second and imagine what the outcry would have been had Parcells - or any other male CEO - insulted a woman or minority employee in the same way that he did Belichick. Given the hyper-litigious society in which we live Parcells would have been fired, and the New York Jets would have paid big fines for his discouraging words.

What would have been missed is that the commercial present rarely predicts the future. While Parcells viewed Belichick as a career assistant, others (most notably New England Patriots owner Bob Kraft) thankfully didn't. Four Super Bowl victories later, it's increasingly said that Belechick is the greatest NFL coach ever. So rabid are sports fans that other NFL owners (and college ADs) are constantly in search of the next Belichick, or Nick Saban. Rest assured that if an individual possesses the genius of either, gender or color won't prove a barrier to employment forever.

What this hopefully reminds us is that whether in sports, or the traditional world of business, the path to higher pay for the super-talented is often paved with discrimination. Almost as a rule. Figure that those who truly rate higher pay than their peers usually only do because they have ideas about how to do things that have so far not been tried, and because they haven't been, they're regularly the source of early-stage ridicule. In commerce, if you have a great idea you almost literally have to force it on people.

As evidenced by his unrivaled success in the present, the formerly $25/week assistant in Bill Belichick was once underpaid. So were Steve Jobs, Jeff Bezos and Reed Hastings similarly underpaid. Visionaries are discriminated against more than anyone.

Applied to females, rather than decry a supposed gender wage gap rooted in discrimination, they should simply prove it as the discriminated against long have. If not, as in if they intend to produce videos or pursue legislation to air their grievances, they're merely admitting for all to see that their level of talent doesn't rate equal or greater pay to begin with.

John Tamny is editor of RealClearMarkets, Political Economy editor at Forbes, a Senior Fellow in Economics at Reason Foundation, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). He's the author of Who Needs the Fed?: What Taylor Swift, Uber and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank (Encounter Books, 2016), along with Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You About Economics (Regnery, 2015).

[Alberta's Child]

The author would have more credibility if had spelled "Belichick" correctly throughout the article.

Having said that, he makes great points but really misses a key point. If women are really paid substantially less than men, then any employer with an IQ over 70 would lay off all their men and replace them with women. They could do that without even facing gender-discrimination lawsuits in this political/cultural climate.

That hasn't happened, so the obvious question should be: Why aren't employers across the board willing to take advantage of a 30% labor cost savings?

The answer is obvious.

[PapaBear3625]

The main “source” for the “gender pay gap” is to look at the national average pay for women versus men. This ignores the fact that men and women tend to work in different areas.

If you look at jobs that are dangerous, dirty, uncomfortable, involve being on the road a lot, or have odd hours, they are predominantly done by men. It’s men who go down in the mines, mostly drive the trucks, clean out sewage pipes, fix roofs in the summer heat, etc. Of course, these jobs pay more than safe, comfortable, indoor jobs.

[kearnyirish2]

I see it also in something as simple as hours worked; some female co-workers work the minimum hours so they can raise families, other females without families imitate them because they feel it is unfair, and now I see men doing the same. Female whiners/underperformers have significantly shortened my workweek; I can’t thank them enough.

[expat_panama]

Happy end'o'week!  Stocks have soared almost a %,  the Nasdaq to a new high and the S&P finally above its 50-day moving average; volume's easing back down as fewer traders are willing to believe there's a 'there' there.   Current prices for precios metals also show caution as gold/silver ($1,338.49/$19.90) wind back a tad.  Futures contracts suggest we got more upside ahead w/ stock indexes going at +0.88% and metals +1.17%.  We'll see.

No econ stats today, yesterday's ended w/ Existing-Home Sales Unexpectedly Fall In August To 5.33 Million Rate.

New econ threads galore:

• Economy A Hoax & House Of Cards-Paul Craig Roberts
• The number of new businesses in the US is collapsing — and that's disastrous news for the economy
• Obama Boom Builds Obamatowns
• The global economy The low-rate world Central banks have been doing their best to...
• Fed “forward guidance” blows too much smoke
• Donald Trump, in Pittsburgh, Pledges to Boost Both Coal and Gas

[RoosterRedux]

A long time ago, when I was first starting out in business, there was an old saying...”you’ll never be paid what you’re worth until you are your own boss” (i.e. start your own business or shut-up).

[SamAdams76]

I’m a hiring manager and my male and female employees are on the same pay scales and compete for the same positions. In my 30 years of managing I’ve never seen a situation where a woman was paid less on account of being a woman. It’s time they cast aside their silly victim culture.

As for Belichick, I remember when he was Bill Parcells understudy. Parcells never won a Super Bowl without Belichick running his defense. It was a smart and gutsy move for Belichick to get out from under Parcells. I didn’t see the game last night but I see that Belichick continues to win with second and third string quarterbacks. Good for him. I haven’t watched a game yet this season however. The showboating of the American-hating punks sicken and disgust me. The NFL needs a new commissioner to clean this mess up.

[Dr. Bogus Pachysandra]

“”Belichick” was really disliked by Browns fans. He was a grumpy, unpleasant guy, bedside manner like Kevorkian,

[cgbg]

I did start my own business years ago and lost my shirt.

So, I guess I failed at being my own boss!

(Currently paid well by someone else...as to what I am really worth, that remains a mystery :-) )

[xrmusn]

you’ll never be paid what you’re worth until you are your own boss” (i.e. start your own business or shut-up).
= = = = = = = = = = = = = = = = =

On the same line as

“Buy ‘him’ for what ‘he’ is worth and sell ‘him’ for what ‘he’ thinks ‘he’ is worth.

Till this ‘gender pay gap’ was revealed, I never realized how ‘stoooopid’ I was in business for not hiring ALL females & minorities and just pocketing the (name an amount) per hour and getting on with it.

[castlegreyskull]

When Parcells said all this, Belichick probably didn’t start his cheating techniques. He wasn’t a very good coach in Cleveland.

[RoosterRedux]

I have also heard that entrepreneurs on average fail 16+- times before getting it right (which is why franchises are so popular).

I don't know if that is true. I have failed before also and suggest you do as I do...just consider your failures learning experiences.

[cgbg]

My failure _was_ a learning experience, no doubt about that! ;-)

[Alberta's Child]

Interesting. My company is similar, but I don't necessarily see the same level of performance. Women have to sacrifice a lot more on the personal side to advance, and I respect the ones who decide it simply isn't worth it. I've had a couple of great female employees who could have moved elsewhere for better pay, but they stayed in my firm because we were willing to be very flexible with work hours, work arrangements, etc. while they have young kids at home.

As far as Belichick is concerned, I think he was a great defensive coordinator. It's a bit unfair to link Parcells' success too closely to Belichick. One thing that has changed dramatically since Parcells' last Super Bowl win was that the NFL now has a salary cap and lots of players moving around with free agency. You will never see an NFL team with the collection of talent that those Giants teams of the late 1980s had, as long as this is the case. I've said for years that Belichick's success is largely driven by the fact that you can win a Super Bowl in the NFL today with a roster of players who would have been no better than 6-10 in the 1975-1995 period.

[Purdue77]

Clyde Cessna, founder of Cessna Aircraft, crashed 13 times before he learned how to turn his aircraft without crashing. By surviving, he was able to incorporate what he learned into his aircraft and never crashed again. And the rest became history.

[Alberta's Child]

I think he was really disliked by Browns fans because he was a combined 36-44 in five years there, with only one winning season. LOL.

[Alberta's Child]

Good post!

[Gen.Blather]

During my MBA economy class the discussion of wages came up. A student had a friend in some tiny town in Iowa who had a four year degree but could only find employment in Walmart at $12/hr. She thought that Walmart should pay her friend more because she had a college degree. I said that Walmart had a job it thought was worth 12/hr and had advertised for somebody to fill that job. It is not Walmart’s concern that the friend had a degree that was not required. If the friend wanted to use her degree then the friend needed to move to someplace where her degree was in demand.

The class went to pieces. Nobody should have to move to get employment. (That was just one of the ludicrous arguments.) My defense of Walmart made the professor take me aside and threaten me that if I didn’t leave my “radical right wing” attitude at home he would suspend me from the class.

I have worked in several union shops. When pay is decided on seniority, you lose the really good people who could grow the business. They go elsewhere to market their skills.

I have had to work with women and blacks who were promoted based on being female or black. They find themselves over their heads and really screw up the organization. Women and blacks who got there on their own because they could do the job are a real pleasure to work with.

[RoosterRedux]

I only trust what I learn in hard times. Good times can be misleading.;-)

[9YearLurker]

He’s still a grumpy, unpleasant guy with a bedside manner like Kevorkian—but New England fans love him.

Did you happen to catch the Pats’ 27-0 drubbing of the Texans last night in a game starting their rookie, third-string QB? Take that, Roger Goodell!