My Comments On A Clinton Ad

A TV ad for Hillary Clinton claims that far too many Americans are not getting paid what they are worth as we see her in a factory with a female worker, implying that women are not getting equal pay for equal work.

We often hear how women only make 77% as much as men. It is that type of statistic that the ad is alluding to.

But that number is misleading. Differences in pay can exist because of differences in hours worked, experience and occupation.

Harvard labor economist Claudia Goldin has said that there is not enough evidence to show systematic discrimination in pay between genders and the differences are mostly a result of choices individuals make.

Former director of the Congressional Budget Office June O'Neill said "For men and women who never marry and never have children, there is no earnings gap.”

If companies could pay women 77% of what they pay men for the same work, they would stop hiring men. They could instantly cut their labor costs by 23%.

Why don’t companies do that? Because the pay gap exists due to the other factors mentioned above and women are not getting paid less for the same work.

If that sounds unrealistic, recall that those on the left often accuse companies of outsourcing jobs to cut labor costs. In 2004, Democratic presidential candidate John Kerry talked about “Benedict Arnold CEOs.”

The ad could have also implied support for a higher federal minimum wage. But raising it to just $10.10 could cost 500,000 jobs according to the Congressional Budget Office.

On the “fight for $15” former chief economic advisor to President Obama Alan Krueger says “the push for a nationwide $15 minimum wage strikes me as a risk not worth taking” because it is far out of the range of anything economists have studied. Alan Blinder, another economic advisor to Democrats, said something similar.

Workers might not get paid what they are worth if labor markets are not competitive and we don’t have enough firms hiring. But Christina Romer, Obama’s first chief economic advisor, said in 2013 that labor markets in the U.S. are generally very competitive.

It is also impossible for any government agency to determine who is underpaid. There are 150 million workers and no one can check the productivity level of all them.

Our biggest economic problem is slow growth. The gross domestic product has risen less than 3% annually ten straight years (adjusted for inflation). That is a record.

This hurts job growth. Currently, only 77.7% of 25-54 year olds have a job, still below the 79.7% in December of 2007, when the recession started.

That means we are still down about 2 million jobs. We can get them back with higher GDP growth, as another Democratic economist from the 1960s, Arthur Okun showed.

The ad said nothing about this. It did mention that we can’t reach our full potential as a country unless all individuals can.

But that won’t happen until the job picture improves. Many economists think that too many regulations are stifling investment, which hurts growth.

The Kauffman Foundation reports that “the startup rate in the United States has roughly halved since the 1980s.” That might limit GDP and job growth, which will not be helped by more regulations.

Today25-30% of jobs require a license, while it was only 5% in the 1950s. Even a White House report issued last said that was a problem.

We need a growing, entrepreneurial economy, with fewer restrictions on workers. Not more government control as Clinton promises.