The gender pay gap has made its way into the headlines once again, and it is owed to the US Women’s Soccer team that brought home a world championship trophy. Upon their successful journey, not only were they greeted with applause, but also outrage. This outrage however was not directed at them, but on their behalf. It has been noted that although their efforts on the field has shown to be far more successful than the men’s, their earnings are far less than their male counterparts.
In response, the 28 women on the US national team have opted to sue the United States Soccer Federation for pay discrimination. Notably, the lawsuit states “despite the fact that these female and male players are called upon to perform the same job responsibilities on their teams and participate in international competitions for their single common employer, the USSF, the female players have been consistently paid less money than their male counterparts. This is true even though their performance has been superior to that of the male players – with the female players, in contrast to male players, becoming world champions.”
Their lawsuit is aided by the notion that women earn as little as 38 percent of what men make, which is a staggering $164,320 gap. Although they concede they are paid more through salary and bonuses, they respond this is simply due to the fact that they play more games, therefore expend greater amounts of labor. We will address that shortly.
Additionally, research from the Wall Street Journal shows that “from 2016 to 2018, women’s games generated about $50.8 million in revenue compared with $49.9 million for the men, according to U.S. soccer’s audited financial statements. In 2016, the year after the World Cup, the women generated $1.9 million more than the men. Game revenues are made up mostly of ticket sales. In the last two years, at least, the men’s tally includes appearance fees that opposing teams pay the U.S. for games.” However, note the second to last sentence. This statistic only shows game revenue, negating other sources of revenue such as jersey sales, broadcasting, sponsorships (which account for nearly $100 million in USSF revenue), and so forth.
The fundamental issue driving the outrage is that the women’s teams puts just as much effort into the game, if not more, and are more successful in their win ratio. In other words, the women’s team performs more labor and actually wins championships. This statement reflects what is known as the labor theory of value. This theory argues that the economic value of a good or service is determined by the amount of labor required to produce it. Therefore, the greater number of marginal labor inputs directed into a good or service, increases its value. Unfortunately for those propagating this concept which was introduced by Adam Smith and adopted by Karl Marx, it was debunked when the subjective theory of value was introduced during the Marginal Revolution. Instead of value being derived from labor inputs, value is rather determined by the subjective tastes of the consumer. In other words, demand.
For example, lets say that Artist A creates a piece of art that required 36 hours of labor to create, while Artist B created a different piece of art that only took 8 hours. Both artists introduce their work to the public with the intention to sell them. Artist A finds that he can only sell his design for $50, while Artist B is able to sell his for $100. What conclusions may we draw from the provided scenario?
We can’t say the labor theory of value holds water, as more labor inputs were required for Artist A’s art yet its market price was half of Artist B’s. One can only assume that consumers simply preferred Artist B’s art more than A’s, and were willing to pay a higher price for it. For the sake of relevancy, let’s say Artist A is a female and Artist B is a male, and although a ludicrous suggestion, let’s theoretically assume that many consumers are sexist and simply prefer the male’s art rather than the female’s, exclusively because of gender. If we are to give this notion validation, it still does not negate the underlying economic laws. There was simply more demand for the male’s artwork, therefore granting him the ability to charge a higher price, and frankly consumers simply prefer the male’s art more.
All economic actors have individual preferences that are driven by various factors regarding all goods and services. Whether gender plays a role in the transaction between producer and consumer or not, the market prices are determined by demand for the particular good. This concept of preferential value being driven by demand is the most illuminating factor that steers the wage gap in this particular scenario. Are fans in the wrong for preferring male soccer over female soccer? How can one make a valid argument about the incorrectness of the subjective tastes of an individual?
Like the other scenarios that pertain to the gender wage gap, rather than the conspiracy that misogynist and sexist corporate male executives are purposefully depressing female wages to maintain our patriarchal society, there are factors and economic concepts that provide logical answers. In this case, it is demand driven by consumer preference. Sure, they can compensate the female soccer players at a higher percentage than what they brought in, therefore granting them an even higher percentage of income from total revenue than men. Perhaps lower men soccer players’ income to mirror their female counterparts. However, both of these actions are in themselves discriminatory towards men, which isn’t necessarily promoting genuine equality. This is aided by the fact that the men’s world cup generated $6 billion in revenue, with participants splitting $400 million, or 7% of total revenue, while the women’s world cup is expected to generate $131 million, splitting $30 million. Therefore, 23% of total revenue. Or another option would be to naturally increase the demand for goods and services related to women’s soccer by following what US women’s champion Megan Rapinoe suggested:
“Come to games, buy jerseys, become season ticket holders, tell your friends about it.”
If FIFA and USSF want to engage in collective bargaining with their employees, that is completely acceptable and more power to them. In fact, their consistent success understandably grants them grounds to ask for a raise in wages from their employer if their achievements bring in further revenue, which is expected. However, the myth that women are paid less exclusively because of their gender instead of outlying factors that characterize their gender must be dispelled for the sake of an honest discussion.
Latest posts by Logan Davies (see all)
- House Passes Federal Minimum Wage Increase – Eccentric Economics - July 21, 2019
- Economic Laws are Apparently Sexist – Eccentric Economics - July 14, 2019
- The Petrodollar’s Influence on US Foreign Policy – Eccentric Economics - June 30, 2019