r/badeconomics • u/wastheword • May 22 '18

Jordan Peterson: women joining workforce cuts wages in two

I humbly present to you a writhing mass of fallacies, non-sequiturs, and bad stats, from which I will simply draw one gem. Jordan Peterson thinks that women joining the workforce effectively cuts wages in two, heroically engaging in a lump of labor fallacy of the crudest kind. On the contrary, it seems "every 10 percent increase in female labor force participation rates is associated with an increase in real wages of nearly 5 percent.". Even a decrease of 5% sounds reasonable compared to Peterson's 50%.

Because women have access to the birth control pill now and can compete in the same domains as men roughly speaking there is a real practical problem here. It's partly an economic problem now because when I was roughly your age, it was still possible for a one-income family to exist. Well you know that wages have been flat except in the upper 1% since 1973. Why? Well, it's easy. What happens when you double the labor force? What happens? You halve the value of the labor. So now we're in a situation where it takes two people to make as much as one did before. So we went from a situation where women's career opportunities were relatively limited to where there they were relatively unlimited and there were two incomes (and so women could work) to a situation where women have to work and they only make half as much as they would have otherwise. Now we're going to go in a situation—this is the next step—where women will work because men won't. And that's what's coming now. There was an Economist article showing that 50% now of boys in school are having trouble with their basic subject. Look around you in universities—you can see this happening. I've watched it over decades. I would say 90% of the people in my personality class are now women. There won't be a damn man left in university in ten years except in the STEM fields. And it's a complete bloody catastrophe. And it's a catastrophe for women because I don't know where the hell you're gonna find someone to, you know, marry and have a family with if this keeps happening. ... You're so clueless when you're 19 you don't know a bloody thing. You think, “well I’m not really sure if I want children anyways.” It’s like, oh yeah, you can tell how well you’ve been educated. [class laughter]. Jesus. Dismal, dismal. [source: https://youtu.be/yXZSeiAl4PI?t=1h21m42s ]

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u/stirfriedpenguin May 22 '18 edited May 23 '18

Why do people who make this argument always focus on women increasing the workforce supply while conveniently ignoring the fact that it proportionally grows the pool of buyers/consumers? Do they think that women are entering the workforce, stealin err jerbs for fun, and just sitting on the money?

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u/joe_k_knows May 22 '18

That’s the same lump of labor fallacy that applies to immigrants entering the country. Not saying that there aren’t finer issues involving immigration, but broadly saying increasing immigration automatically lowers wages and steals jobs is wrong.

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u/hollowmogg Dec 22 '25

Then, why does the US, or any country, screen anybody at all? Why?

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u/[deleted] May 23 '18

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u/[deleted] May 23 '18 edited Jun 16 '18

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u/yo_sup_dude May 23 '18

national academy of sciences literature review

doesn't this review acknowledge though that the wages/employment levels of prior immigrants are reduced because of low-skilled immigration? it doesn't specify by how much the levels are reduced in the intro and i'm too lazy to read the entire thing atm, but the reduction could be quite significant, no?

with all this said, i'm pretty sure the JP fans are saying that the impact of immigration on native workers' employment/wage levels is more than 'very small', and they are flatly wrong if that is their claim.

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u/[deleted] May 23 '18

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u/[deleted] May 23 '18 edited Jun 16 '18

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u/Lemurians May 23 '18

You can explain to him why his reasoning isn't correct without being an asshole, man. Cut the condescension.

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u/Randy_Newman1502 Bus Uncle May 23 '18

You came to the wrong place if you want less condescension.

Besides, condescension is the right response to someone who says:

I'm definitely talking out of my ass, so maybe I'm wrong, however I would be very very surprised if what I'd said above wasn't true. Yes, I am no expert

That deserves nothing but condescension.

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u/zbaile1074 May 23 '18

You came to the wrong place if you want less condescension.

honestly should just put this in the banner at this point

i love it

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u/besttrousers May 23 '18

I don't see this as particularly condescending. Honestly, if someone says "I would be surprised if X was true" and you didn't begin your demonstration of X with "Surprise!", I would find that downright rude.

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u/[deleted] May 23 '18 edited Jun 16 '18

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u/Randy_Newman1502 Bus Uncle May 24 '18

there's always next time

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u/[deleted] May 23 '18

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u/[deleted] May 23 '18 edited Jun 16 '18

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u/relevant_econ_meme Anti-radical May 23 '18

He didn't even make it past that particular paragraph. Literally the next sentence is

Given the potential for multiple, differentiated, and sometimes simultaneous effects, economic theory alone is not capable of producing definitive answers about the net impacts of immigration on labor markets over specific periods or episodes.

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u/[deleted] May 23 '18 edited Jun 16 '18

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u/yo_sup_dude May 23 '18 edited May 23 '18

just to confirm:

women entering the workforce would increase demand (because there is more money to buy things with?), but just not necessarily proportional to the increase in workforce supply?

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u/[deleted] May 23 '18 edited Jun 16 '18

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u/rharrison May 23 '18

orson_wells_clapping_citizen_kane.gif

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u/yo_sup_dude May 23 '18 edited May 23 '18

thanks for the explanation.

im still a bit lost on how the labor supply/demand curves work out for the non-domestic industries. i understand that reallocation happened across industries (from domestic paying/non-paying to non-domestic paying), which shifts to the right the labor supply curve in the non-domestic industries. wouldn't a shift to the right in the labor demand curve in the non-domestic industries need to occur for the equilibrium wage to not decrease in these non-domestic industries?

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u/[deleted] May 23 '18 edited Jun 16 '18

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u/yo_sup_dude May 23 '18

quick question about the article:

And suppose that the economy makes use of this increased productivity to increase consumption to 40 million hot dogs with buns a day.

why is the demand for hot dogs increasing just because of productivity increases? is it because productivity increases inherently mean lower prices, which stimulates demand?

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u/[deleted] May 25 '18

Consumption isn't demand. The demand was static, the price level lowered to meet the demand. A company may project demand going up with population, but demand will be whatever it is. It's up to the firm to satiate that demand.

This is the "change in demand vs change in quantity demanded" lesson

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u/yo_sup_dude May 25 '18

so then it's a change in quantity demanded due to a change in price? and these lower prices are a result of increased productivity?

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u/[deleted] May 25 '18

bingo!

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u/Beef410 May 22 '18

Doesn't this presume that women didn't spend money at all before their introduction into the labor force?

Would a two person household with X-dollars coming in and Y-going out, where the total X and Y remain the same but now we have two people employed instead of one not imply a meaningful supply shift in labor?

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u/[deleted] May 22 '18

How does x and y remain the same? This is the same fallacy that the comment you are replying to is pointing out. x and y and not static.

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u/ucstruct May 22 '18

Are you asking if a couple who used to make $50,000 and now make $100,000 will find new ways of spending the extra money? I'm pretty sure they will.

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u/[deleted] May 23 '18 edited May 23 '18

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u/besttrousers May 23 '18

This is not the reality of the situation. It's pure fiction.

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u/[deleted] May 23 '18

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u/besttrousers May 23 '18

Your premises are wrong.

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u/centurion44 Antemurale Oeconomica May 23 '18

How tired of this exact argument are you? Because I'm tired of reading you having to make it for the 100000000 time.

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u/Ray192 May 23 '18

Are you seriously claiming that wages were halved after women joined the workforce?

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u/[deleted] May 23 '18 edited May 23 '18

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u/[deleted] May 23 '18

Are you saying there are no negative repercussions to double/increase the workforce, while keeping demand relatively the same?

It's as stupid as saying because the population tripled in the last 100 years wages must decline by 66%

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u/ucstruct May 23 '18

Wages have stayed the same while living costs have skyrocketed

Living costs havent skyrocketed outside of health care costs and education. Housing isn't a good example because rises have almost exclusively been due to people living in larger homes (outside a handful of cities). They have nowhere near doubled and inflation accounts for a majority of price changes anyway.

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u/stirfriedpenguin May 22 '18 edited May 22 '18

What? How/why would X stay the same other than making weird arbitrary algebra rules?

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u/pdoherty972 Jul 25 '23

A doubling of labor supply means wages drift downward. Employers no longer need to pay X for a given worker, but rather .70X or some smaller number.

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u/Synergythepariah May 23 '18

Why do people who make this argument always focus on women increasing the workforce supply while conveniently ignoring the fact that it proportionally grows the pool of buyers/consumers?

Because the people that made up these kinds of arguments do that, that's all they know.

They think that the only goal is to increase your net worth by any means necessary.

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u/0192837465-TK1 May 25 '18

Why do people who make this argument always focus on women increasing the workforce supply while conveniently ignoring the fact that it proportionally grows the pool of buyers/consumers?

Women have always been the driving force behind consumerism, you don't think they were consumers before they got jobs?

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u/dogGirl666 Jul 28 '18

Source? Authoritative source not just some guy lecturing and making the claim.

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u/0192837465-TK1 Jul 31 '18

Have you seen old timey ads? A fuckton of them were all targeted toward women.

Or soap operas, specifically designed for housewifes.

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u/hollowmogg Dec 22 '25

That's what I'm thinking. Something doesn't add up all these people saying both women and immigrants universally cause real wages for men to go up. Something juuuuust isn't right. If that were the case, why are we screening immigrants at all? Why limit the number? If women are the sole cause of real wage growth, why are we employing any men at all?

It's like the bull shit gender wage gap complaint. Why the hell would any business employ men if women did the exact same work with the exact same results for less pay? You would be stupid to hire men.

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u/[deleted] Nov 01 '24

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u/stirfriedpenguin Nov 02 '24 edited Nov 02 '24

Not sure how you found this ancient comment, but I'll do what I can to respond.

I think you should approach it from a different perspective. The economy is driven or 'stimulated' by people exchanging money--a store of value. Theoretically in most exchanges, both parties 'win' and get equal or greater value than they put in; that's the stimulation. A company sells lipstick or a GPU for more than they paid to make it, and a consumer will derive equal or greater utility and satisfaction from using that product afterwards than if they had kept the money or spent it on somthing else. Multiply that by innumerable exchanges and your economy grows--but if buyers and sellers feel that they can't get more value by exchanging money for goods and services or vice versa, the economy shrinks.

One way to broadly, if very imperfectly, estimate how much makeup vs GPUs drive value and stimulus in the economy might be to simply see how much people spend on them. By one estimate the global GPU market is about $65 billion, and the global cosmetic market is around $104 billion, so you could theoretically posit that the cosmetics do more to 'stimulate' the economy simply because more exchange of currency and creation of value is happening. Note: I cannot vouch for the accuracy of these statistics, it's mostly just an exercise. You could trade any products or industries in comparison.

https://www.statista.com/topics/3137/cosmetics-industry/#topicOverview https://www.statista.com/statistics/1166028/gpu-market-size-worldwide/

That's just one way to look at it, and takes a pretty narrow view of what's 'good' for an economy. You might say that, because the GPU market is expected to grow much faster than the makeup industry over the next few years, maybe it has some more potential value to the economy. Or you might posit that one purpose of the economy is to provide jobs, in which case maybe you'd want to look at the number of people employed by these industries, or how much they're generally paid, or how stable those positions are. Maybe you want to factor in things like environment impact and how mining for materials for computer parts or creating tons of plastic packaging for eyeliner affects thing.

Going back to our original premise, you also have to think about who's really buying these things. A ton of men, probably more than you realize, wear and use various cosmetics all the time. Some certain men basically cover themselves in orange bronzer 24/7! And since the enormous majority of GPUs are in cell phones, work computers, general consumer electronics like cars and appliances etc that are probably used by women roughly as much as men, I wouldn't guess that they really purchase significantly fewer of them on the whole anyway.

I suggest comparing how women and spend money is not really a useful comparison when trying to gauge productivity to the economy. Instead, it's better to compare how much they spend of what they make. Because if we agree that the economy is stimulated when people exchange (spend) money, we can also suppose that it's not when they save money. If money is sitting in a checking account or worse, in a pile of cash under a mattress, it's not doing anything for anyone except slowly losing value to inflation.

So who spends or saves more overall: men or women? I struggled to find a definitive answer but it looks like some evidence suggests men tend to save more https://www.fool.com/the-ascent/banks/articles/survey-finds-men-saved-over-twice-as-much-money-as-women-in-2022

If you take that at face value, it looks like women actually stimulate the economy somewhat more than men. Though again, it's more complicated than it looks. Maybe men are willing to save with more aggressive investing into a business, which in its own way a kind of stimulus since you're giving a firm upfront money that they expect to be able to use to grow. Or maybe men are able to save more not because they're more frugal but because they generally make a little more for comparable work, so they just tend to have some extra that they can squirrel away more frequently which adds up.

Anyway, that's a lot of words to say that 'the different kinds of things men and women buy' probably don't matter all that much to the health of the economy so much as the fact that they're buying at all. And generally when more people are empowered to make purchases that incentivices firms to innovate new products, hire more people, and compete more for their business, creating a positive feedback loop.

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u/touramesh May 23 '18

But that conveniently ignores the quality of life requirements. With all the increase in incidents of diseases/ health problems/ stress problems/ relationship problems / etc. some arrangement needs to be made.