Want more women at the top? Don't overtax the ones already there
Lowering the 32.5 percent marginal tax rate to 30 percent and abolishing the 37 percent tax bracket for people earning $125,000 to $200,000 helps women. Australian Taxpayers Alliance Policy Director, Satya Marar, published an op-ed this week in the Daily Telegraph pointing out that this tax cut would not only provide Australia’s economy with a much-needed productivity boost. It would also promote women’s workforce participation and would bring more highly educated and qualified women back into the workforce, and reward them with higher paying jobs.
The government is punishing the very women who are doing the most to eradicate the gender wage gap.
It is women who have the power to take control of the gender wage gap. Not radical social engineers who think that imposing constraints on companies, or pushing unmeritocratic affirmative action policies are the answer. Women who are keen to work hard and get ahead in a competitive world such as the one we live in are best equipped to do that when the beast of burdensome regulation and excessive tax is off their backs.
Men and women are different. Smart businesses understand that women are profitable, but not because they can get away with paying women less. In reality they cannot. Rather, it is borne out by empirical evidence attesting that women have unique value to add to a management team. A study done by the London School of Business shows that women working in tandem with men brings better ideas to the table and improves the efficiency of an organisation. This is being rapidly recognised by the private sector without the need for government encroachment. As noted by Claire Shipman in her book “Womenomics”, “A McKinsey survey … determined that more than 70 percent of companies that made efforts to empower female employees in emerging markets either experienced or expected to experience increased profits as a direct result of those efforts.”
While women complain that men are getting paid more, they simultaneously surpass those men in education. In economies demanding more specialised expertise, we will soon find more women at the top of the corporate ladder.
Women need to understand their value. Only 34 percent of women ask for a better compensation package after receiving a job offer in comparison to 46 percent of men. You cannot complain about not having something which you never asked for.
That fact that women are more risk averse than men is a benefit to society. One wonders if the 2008 financial crisis would have happened if more women worked on Wall Street. However, risk aversion doesn’t pay well. There is a monetary value to risk; that is why stocks, which are usually riskier than bonds, have higher rates of return. Women cannot expect a payout for risks they don’t take anymore than I can expect to win the lottery with tickets I didn’t buy.
Women often make different choices than their male counterparts, and this unfortunately or otherwise, adds to the existence of stereotypes. And authoritarian social justice warriors as well as insecure women-hating ‘neckbeards’ may both be surprised to learn that women are rational human beings smart enough to understand the ramifications of their choices.
If a mother chooses to stay home with her child, it is because doing so increases her utility. Put in less technical terms, it brings her a greater degree of satisfaction and fulfilment than the other choices available to her. She may enjoy working at home more than in the office. That choice may be the wisest financial decision in the moment. For other women, it may be the opposite.
Only individual women know what will most effectively increase their utility.
It is not the job the government or society to impede women’s choices even in an attempt to decrease the gender wage gap. It is not the place of men or even other women to criticise and impede the rational choices made by other women.
When organisations or governments enforce quotas, good work done by women is discredited. Women’s achievements are mistaken for handouts. When the state over-regulates businesses, women entrepreneurs are harmed.
High taxes hurt high achieving women.
The argument that only men benefit from the Frydenberg tax cuts is simply false. Studies show women are more sensitive to tax incentives which affect their take-home pay, so taxes have a higher impact on the hours women choose to work.
More women in the labor force adding their voices and varying perspectives, helps society as a whole. Money in the hands of the people, instead of the government, benefits all groups.
Instead of punishing hard working women who do well; we should reward them with a flatter and fairer tax system. Instead of blaming men and society for the wage gap, women should take responsibility for their individual choices. Instead of impeding people’s freedom in the name of equality, we should accept the decisions other people make with their lives even if it alters the statistics.
This article appeared in LibertyWorks on 24 June 2019.