One of Democratic presidential candidate Hillary Clinton’s flagship economic ambitions for getting more women in the workforce could have the opposite effect of widening the very gender pay she has campaigned so hard to narrow.
Hillary Monday urged employers in an economic speech to step up to the plate and provide a raft of benefits to their workers. “Fair pay and fair scheduling, paid family leave and earned sick days, childcare are essential to our competitiveness and our growth,” Hillary said in New York City.
A key ambition of the Democratic front-runner is to raise the female labor force participation rate after stagnating for close to two decades. To that end, Hillary trumpeted the virtues of paid family leave as well as the reform of sick days.
Data from the Organisation for Economic Cooperation and Development (OECD), however, shows there could be a link between more liberal parental leave policies and a higher gender wage gap.
The Pew Research Center reported in 2012 that “the OECD analysis showed that some countries that offer more liberal parental leave policies have higher pay gaps among men and women ages 30 to 34.” The OECD examined 16 countries and found that the U.S. had a lower gender wage gap among 30-34 than eight other countries that had more liberal parental leave policies.
According to economist at the Manhattan Institute and former Chief Economist at the U.S. Department of Labor Diana Furchtgott-Roth there are two major reasons why more paid leave could hike the gender wage gap.
“Someone has to pay for the paid parental leave,” Roth told The Daily Caller News Foundation. “If women pay for it, then it comes out of their cash wages, leading to a larger pay gap. If the taxpayer funds it, then taxes are higher, discouraging women from entering the labor force.”
Secondly, Roth argues that “more paid parental leave encourages women to stay out of the labor force for a longer period of time, so they lose their skills. As they lose skills, their wage declines relative to men.”
Since Hillary’s speech Monday, analysts have warned of the potential unintended consequences of using policy tools to hike the female labor participation rate. “Once again, we find examples of government overreach into wages and labor markets backfiring on the very people it is trying to protect,” Adam Smith Institute Research Associate Kate Andrews told TheDCNF.
“The gender pay gap has been debunked for the myth that it is; women are not earning less than their male counterparts on the whole because of employer discrimination, but rather because many women make different lifestyle choices that do not value a high salary above all else,” she added.
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