Now that we’ve established that labor markets aren’t special, it’s time to extend this reasoning to the “equal pay for equal work” discussion.
If labor is a good that is exchanged just like any other, than we can easily make an analogy to the terms of exchange for labor and the terms of exchange for a good, say, tires. As we know, Chinese-made tires are much cheaper than American-made tires, a fact which greatly upsets Barack Obama. It upsets him so much that he had to impose draconian tariffs on Chinese tires, in a vain effort to “save American jobs.”
But wait a second… why should Chinese tires cost less than American tires? Isn’t that discrimination? Isn’t it wrong that Chinese tires aren’t paid as much for their services as American tires are? Shouldn’t we punish people who arbitrarily pay less for Chinese tires solely because they know that the Chinese tire will accept these lower wages?
The absurdity of this comparison reflects the absurdity of the “equal pay” mindset. Of course employers will pay as little for labor as they possibly can, just like how consumers will obviously pay as little for tires as they possibly can. This is how the market works.
Of course, some employers will choose to pay everyone equally, even if they could get away with not doing so, because such a decision profits them in other ways. It may create good publicity, or it may merely create a psychic profit in the sense that the employer will feel better about himself for not discriminating. This also happens with consumers. Some hyper-nationalists, presumably, are willing to pay more for American-made tires because it makes them feel good too (I assume Obama is in this category).
But that doesn’t change the fact that the actions are morally equivalent. Any time you pay less money for Chinese-made goods, you are discriminating against those goods solely based on their nationality. How despicable of you!
err, I would like to point out that some products are NOT the same when they are made elsewhere, and sometimes the quality differences will not affect you immediately. Market forces have trouble working on situations that will occur twenty or more years in the future.
Take American e-liquid versus chinese e-liquid, for example… american e-liquid nicotine tests at nearly completely pure nicotine and liquid suspension, with less than 1% contaminants… generally, american e-liquid is no more harmful than a daily cup of coffee.
Chinese e-liquid tests at between 26% and 34% contaminants, depending on the brand. this makes chinese e-liquid far worse for you, in terms of carcinogens, than actually smoking cigarettes.
The problem is that without extensive research, your average e-cig consumer DOES NOT KNOW this. chinese liquid is far cheaper than american liquid, even with shipping costs. How are market forces supposed to compete effectively when the average consumer simply has no way of knowing that ten years down the road the cheaper, and thus superior, product is going to KILL them?