Wealth Creation

By Robert Whiston  FRSA

Based on a chapter taken from “Funding Fluid Families” (2002)

 

Conflict over pay differentials has escaped from the legitimate domain of Trade Unions and into the embrace of feminism. In over 40 years of frantic work and justification by feminism the one area not addressed for fear of giving the game away is Wealth Creation.

Pay, in the form of wages or salaries, gives rise to wealth which is the surplus after meeting basic living and survival costs. Wealth takes many forms but regardless of form it is essentially something that can be ‘accumulated’ and ‘liquidated’ for a rainy day.

Pay (and wealth) is therefore very much an area that should be close to the heart of the Trade Union movement. One would have assumed that both pay and wealth would also interest feminism – but it does not. Feminism speaks only of wealth re-distribution, never wealth accumulation.

What happened in the 1970s was an abrogation – and abandonment – by the trade union movement of this central premise. From a position of defending men’s living standards and securing marginal pay increases annually to be enjoyed by his family, the trade union turned 180 degrees and ‘the working man’ was now seen as the enemy of the proletariat, the culprits of pay differentials.

Some would argue that the Trade Unions have been castrated and that it was, at least in part, self-inflicted by poor leadership. The same commentators would argue that the Trade Unions were living on borrowed time from the day Barbara Castle presented her ill-fated legislation for industrial reforms “In Place of Strife” (written in 1969).

The British Trade Union movement relinquished standard of living improvement –the bedrock of their raison d’être – for greater political power and exhibitions of that power.

Left: Barbara Castle MP, Labour Party minister, 1969  

‘Profit’, in the 1970s, was a dirty word, something to be explained away and excused for achieving.

Persistent industrial strikes liquidated the modest wealth reserves of workers, and pay increase secured thereafter never fully compensated for that loss when the strike was resolved.

By contrast, Germany’s trade unions never had anyproblem seeing their company’s profits increase and  workers wages also increase soon after.             

It was to be another 20 years (and a Conservative government under Thatcher), before Castle’s reforms were finally implemented during the 1980s. And it would be the Conservatives who were blamed for all the subsequent woes that befell Trade Unions and their declining membership.

Having lost the initiative and feeling under siege as huge swathes of highly structured traditional British manufacturing were left to go into bankruptcy, the focus shifted from wealth protection to political ambition.

Trade Unions had always represented an alternative power base to an elected government but the structure had no defence from subversion and infiltration, be it East German, Moscow, communist sympathisers, or in it latter days, feminism.

Trade Unions had already bargained with employers to remove actual or perceived differences in pay between the sexes. Now they totally abandoned political polemics over grades, demarcation and apprenticeships and allowed themselves to be submerged by a welter of new political polemics provided by radical feminists.

It was not long before a new Urban Myth was established. It stated that women were exploited by employers and deliberately paid less than men for the same work. This might have been true some decades before but since the Equal Pay Act it would be a very foolish employer that would risk the fines and sanctions it was possible to impose if they were caught operating such a regime (see Annex A). One only has to look at the scale of the issue to realise a coordinated underpayment of women would be impossible.

Table A shows the amount, in millions of people paying National Insurance Contributions (NIC) between 1991 and 1993. Women are such a large proportion of the workforce, 46% (approx 10 million), that deliberate salary rigging would be impossible.

Table A. National Insurance Contributions (in millions).Class 1 ONLY  
Year All Men Married Women Single/Div  Women TOTAL % paid by  men
1991 12.78  5.37  4.22  22.3  57.3
1992 12.29  5.36  4.07  21.7  56.6
1993 11.94  5.39  4.04  21.3  56.0
Source ONS Table 3.12 p 61 ‘Social Trends’

 

Nevertheless, to this day the myth still attracts untutored attention – usually in the form of gullible journalists who parrot government Press Releases.

The problems with government Press Releases are that they aggregate men and women as if the labour market was made up of only 2 sexes, men and women.

This has always struck an incongruous note given that feminists (who are to be found by the shed load in government departments) recognise about 6 or 7 sexes – or as they might prefer it, gender types and/or gender orientations.

Sensible people know that are not 6 types of sexes or genders. They know that men and women can either be married or unmarried, have children or not have children. They know that running a family or not having one to concern oneself about dictates choices, preferences and how money is spent. It is all about how much is needed to stay afloat. Sensible people aren’t interested in abstract political polemics.

The humdrum, actualitie of daily life revolves around income and one of the first to give this attitude a voice was George Gilder in the 1970s. He provided a scholastic reason why abstract political polemics found in government Press Releases were irrelevant. [1]

In a second book, “Men and Marriage”, [2]  which goes over much the same material found in his 1970s book “Sexual Suicide” he writes :

“Single men currently [in 1986] have median incomes less than 10% higher than those of single women, who are alleged to be hobbled by discrimination, even though single men work longer hours and in general tend to use their earning capacity more. Yet they are 30% more likely to be unemployed.

Married men, however, earn some 70% more than singles of either sex.” [Emphasis added – RW] – Gilder, p63.

It was to be another 10 years before this truism was absorbed in Britain – and then only accidentally by a left-wing think tank, the IPPR.

In diagrammatic form this is how pay differentials look:

Table B.  Earning capacities:-      Men Women
Single 1.0 (G) H1 1.0 (G) H1
Married 1.7 (G) H2 0.6 / 1.02 H2
Where G = Gilder and H = Hewitt (IPPR)

 

Gilder’s analysis is clear and sharp. Comparing women with men is fallacious. It is comparable to comparing chalk and cheese. What has to be compared is not exclusively gender but marital status of the sexes.

There are not 2 categories but 4.

The ‘earning capacities’ of single men are standardised at 1.0. Comparisons with single women’s earning capacities indicate that they are very comparable with single men, i.e. +/- 10%.

However, when the earning capacities of married men are compared with both single men and single women, it is found that they earn 70% more, on average (i.e. 1.7:1.0, married men v single persons).

Given the ‘economies of scale’ permitted by marriage, and which operate even at this micro level, e.g. shared housing costs, pooled heating and cooking costs etc, the married couple forge ahead of single persons in the accumulation of wealth.

The main differences occur between the ‘singleton’ and the married man; he out-performs, in income and wealth, both single women and single men and married women.

If we take the values shown in the diagrammatic Table B (above) at face value, we see that the sector representing the married status is more beneficial to wealth creation and a buoyant economy. The combined total of the married man plus the married woman is 2.13 or using the alternative approach 2.72. The best that combining the two single sex (unmarried) categories can achieve is 2.0.

The married man is therefore the true ‘engine of wealth generation’ in any economy (advocates of cohabitation please take note).

It is in the married women category where earnings are at their lowest. This does not have to be spelt out to the reader but to ensure clarity a few of the obvious will be mentioned; married women may be a/. stay-at-home moms, or b/. work part time or c/. take a less stressful job than previously when they were single, or d/. take a job fitting in with term time and holidays.

Married women do not have the same impetus to achieve a maximisation of income / earning capacity because they are part of a team. This is not to say it totally excludes the possibility – and we can all think of exceptions – but the figures show that on average a maximisation does not occur.

Whereas single persons have only themselves to satisfy, a married man has his family to provide for, the moral obligations that carries, and will be that much hungrier for promotion and embrace jobs that entail longer hours and/or higher risks to secure higher rates of pay.

Gilder’s work explodes the myth of female underpayment and exploitation. It is clear that long before the various Equal Pay legislation (enacted in the US and Britain), that single women were as likely as not, to be earning the same if not more than single men. US Census returns (more comprehensive than the British equivalent) have always been unambiguous and have told us for many years where the growth and wealth creation lay.

Then in 1993 Patricia Hewitt and Penelope Leach, published a pamphlet entitled Social Justice, Children and Families”. Published by the can be found this text;

“…. the pay gap between women and men is largely a result of family responsibilities. The earnings of single childless women, on average, are over 95% of those of single, childless men: but married mothers earn, on average, only 60% of the pay of married fathers.” – IPPR, page v.

Translated and put into the Gilder diagram above this 60% becomes 1.02 (ref. H2) (60% of 1.7).

The emphasis of Patricia Hewitt and Penelope Leach’s study was an analysis of the problems associated with the ‘work-life balance’ and how crippling this was for women generally. It was an argument preparing the ground for state subsidised child care / nursery care.

They were able to write of the unfairness of expecting women who were mothers to go out to work unassisted by the state.

Hewitt & Leach vainly try to equate married two parent families with ‘non-family units’ i.e. a single mother with children who has an income from work or state subsidies or a combination of both.

“ . . . Parenthood burdens fathers too, albeit less heavily. …. a … competitive society in which adults have to compete for jobs, …. wage increases …. People who are currently living with dependent children must compete with all those who are childless …. spreading their time and energy between working and caring …. They do not compete on a level playing field.”

We have to infer they are comparing spousal couples with single parents (i.e. mothers), by the remark that fathers can be ‘burdened less heavily’ because only a spousal husband would have any obligation to the family unit.

Removing marriage as the cornerstone and preferred option therefore has costs implications over which Ms Hewitt wisely draws a veil.[3]

For all their analysis and number comparisons Hewitt & Leach failed to realise (or perhaps their research did not range far enough) that their figures were almost the reciprocal of George Gilder’s – and for the same reason.

A remarkable correlation can be seen between the Gilder figures (1986 in the US) and the Hewitt’s figures (1993 in the UK), which are identical as between single men and single women. They are also identical as between married men and married women.

  • Gilder cites and cross-compares the three figures suffixed with a (G). He does not cite married women.
  • Hewitt cites the two single figures (H1) as equal. She also cites the two married figures (H2) in the same ratio as does Gilder i.e. 1.7 to 1.0 (though a reciprocal is used).

She does not compare the single row with the married row, because that would destroy her case, which is that children disadvantage the earning power of their parents.

She does not have the concept of the married man as the outstanding engine of wealth creation, generating vastly more wealth because he has children.

Hewitt’s position is that “Parenthood burdens fathers ….”  (same page) and cripples the earning power of mothers (does she mean that child care costs swallow the majority of any income earned ?). It can be argued that it is clearly the lack of children which cripples the earning power of both single men and single women.

Only mothers ignore the imperative to earn enough to support their children, leaving it to their husbands (or to the state) to provide for their children’s needs. That is why we clearly see in these figures the concept of marriage as a ‘meal ticket’ for life, and do not see an oppression of wives or women.

Blinded by ambition, one interpretation of the figures is that married mothers are not pulling their weight. This would account for the denigration flung at married women generally in the media and the current feminist initiative of down-playing their importance to society. Yet Table A shows that more married women were in work than single women, historically (5.39m v 4.04m).

Hewitt & Leach, who can be broadly termed pro-feminist, can use this apparent unwillingness or inability by married women / mothers to earn enough, as an excuse to give an unfair advantage to both single and married women. However, this Utopian equalisation this can only be achieved by the married man paying the price.

Current initiatives, such as  the ‘New Deal for Lone Parents’, can only be maintained if the implication of the figures is suppressed – or until such time as it dawns upon society that promised improvements will never be forthcoming.

It must have been gravely disappointing for feminists to read in May 2009 of the earnings analysis by the ONS (Office for National Statistics). They concluded that men and women are paid at similar rates until they reach 30 – the average age at which a mother has her first child. After that age, single women are likely to be paid more than men but most women see their earnings fall away in comparison with men [4] (see Gilder’s 1.7 above).

Realising that with or without the despised patriarchy, economic growth as feminists would want to see (wages and salaries) is never going to happen must represent a huge setback to the theocracy of feminism.

Their disillusionment must be all the greater when one takes into account Equal Pay Act introduced into Britain in 1976 – its equivalent was introduced in to the US in 1963. Indeed, the American Equal Pay Act preceded the Women’s Liberation Movement (ref. Warren Farrell).

For its part the Fawcett Society – a strident feminist organisation – has to reconcile why ggirls outperform boys at GCSE ‘A level’ (and now at degree level) yet within three years of graduating female employees are earning less than men. [5]

For reasons that are utterly selfish and mono-sexual it is worried about what it claims are 57% women are in jobs beneath their skills and qualifications. The reciprocal that men are similarly under utilised never cresses their gender-supremacist minds.

By using some form of methodological wizardry they conclude that if ‘traditionally male’ job barriers were scrapped (and presumable given over to women), GDP would rise by up to 2% or £23 billion. But as we can see from Gilder and Hewitt this is simply untrue. Any rise in GDP would best be confined to employing married men. Utilising Gilder and Hewitt’s data the increase would not be a puny 2% but in the region of a substantial 25% or greater.

From a Treasury perspective, should another 2% of men be removed from the number paying NIC and replaced by women the amount of money raised by NIC as a whole would fall because men earned more and therefore pay more in NIC and income tax (see Tables A and B).

One wonders how the Fawcett Society calculates that the pay gap which they claim was 29% in 1976 has almost halved by 2006 (The Observer, Feb 26, 2006). Which factors have altered ? Are more or less married mothers working, or are there more single women working ?

It can’t be that more married men are working because they would drive up the pay gap. So is it unemployment among married men or are married men having to take a pay cut for the sake of equality ?  Or could it be that as the number of men marrying is falling they are being replaced by less well performing single men ?

Is that the reason why we have a growth in child poverty levels ?  Married men can’t earn enough these days and single mothers have never been able to earn enough ?

Poverty for families is most acute in the lower decile of income, i.e. the bottom 10% of wage earners.

In Table C the categories are defined as Pensioners, Single person and Couples (which includes both married and cohabiting). These are further broken into those households with children and those without.

Table C.  Individuals in the Bottom Income Distribution Decile (i.e. 1/10 or 10% – after housing costs, by Family Type (% age).
   1979 *  1988 -89  1990-91
Pensioners  Couple 20 6 6
Single 11 8 5
Single persons No children 10 22 18
With children 9 10 11
Couples  No children 9 10 12
With children 41 44 49
    100% 100% 100%
Source: Dept of Social Security, Incomes and Wealth. Table 5.19. and Social Trends, Table 5.12. (see also “Farewell to the Family ?”, P. Morgan. IEA)*  post Finer Report

 

It comes as a surprise to most readers to find that it is not the Single Mother who is least well off and populates the low income category (see 11% for 1990) but couples with children at 49% (in 1990).  This means that of the minority of households who were not only on ‘low incomes’ but in the lowest 10% of incomes, almost half were families with children (49%).  The other implication is that the remaining 50% must be spread across the low (20%) to middle income (60%) bands with a small majority in the upper income band (80%+).

The situation for both categories has deteriorated from 1979 when only 41% of married couples with children filled the lowest income category and single mother’s children represented 9% of all low income households.

The Equal Pay Act, the Fawcett society, the Finer Report and innumerable subsidies and state benefits have not helped the poorest in society. The taxing of the poor working couple with children in order to subsidise SMH (single mother households) is not working. Working couples are being taxed into poverty and SMH already in poverty are not being lifted out. No one, it seems, is feeling the benefits of the tax-grab.

The good news for radical feminists is that it would appear that in some industries 1 in 14 women with the potential to reach the top are actually doing so. This is because, one suspects, they are prepared to match their male counterparts. A less favourable interpretation is that is that a hidden gender preference is at work discriminating against competent men in order to install politically correct ratios of men to women.

The road to equality has thrown up few crumbs of comfort for women save for a select few. In 1974, the year before sex discrimination was outlawed, only 1.8% of managers were women; by 2006 it had risen to 33.1% according to the Equal Opportunities Commission (but what definition of ‘a manager‘ is the EOC using ?).

Anastasia de Waal, of the Civitas think-tank summed up the pay gap issues when she said:

  • ‘It’s not so much invisible discrimination in this case, as ‘imaginary’ discrimination because it’s the parenting responsibilities gap which is the main issue.
  • ‘In this context it’s less about a gender pay gap per se, but about a childcare gap and that is not necessarily a matter for employers.
  • ‘Women do not put themselves forward for promotion or they are not able to work long hours because they are bringing up children. The reasons for that are complex.’

A study by Bradshaw & Miller showed that;

“ …. the predominant factors influencing full time working for lone parents (mothers) was predicted wage rates, not having young children and child care availability.”

While this may be true of the respondent sample, i.e. female lone parents, it may not reflect the findings of studies made of lone fathers (see Population Trends studies). Lone fathers tend to work longer hours and in more risky occupations (quarrying, hauliers, construction) than lone mothers.

In short, women’s’ biological imperatives make their presence felt over and over again in the issue of perceived pay gaps and imagined underpayments

Annex A

The Equal Pay Act 1970 came into force in Britain on 29 December 1975. It prohibited any less favourable treatment between men and women in terms of pay and conditions of employment.

For an employee to claim under this Act they must prove one of the following:

  • That the work done by the claimant is the same, or broadly the same, as the other employee.
  • That the work done by the claimant is of equal value to that of the other employee.
  • That the work done by the claimant is rated (by a job evaluation study) the same as that of the other employee.

Once the employee has established that they are employed on ‘equal work’ with their comparator then they are entitled to ‘equal pay’ unless the employer proves that the difference in pay is genuinely due to a material factor which is not the difference in gender.

END


[1]Sexual Suicide”, by George Gilder, circa 1973

[2]Men and Marriage”, by George Gilder, Pub’d. Gretna, LA: Pelican Publishing Company, 1986. p63.

[3] Abolishing the Married Man’s allowances can only result in ‘people with dependent children’ having to ‘compete with all those who are childless’. The Pink Pound is the most obvious expression of this second tier-ing of society.

[4] “Why women don’t even get close to the ‘glass ceiling’ in the workplace”, By Steve Doughty , Daily Mail, 3rd May 2009 http://www.dailymail.co.uk/news/article-1175800/Why-women-dont-close-glass-ceiling-workplace.html

[5] “Why the pay gap never went away” A lack of senior part-time jobs forces women to take lowly posts, says a report ordered by Blair, by Gaby Hinsliff, political editor, The Observer, Feb 26, 2006. http://www.guardian.co.uk/gender/story/0,,1718304,00.html

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