The reason economists have trouble with the idea of rampant pay discrimination is that it defies common sense. Let's say I own a company
and I am employing only men. Is it really true that I could fire all
the men, replace them with women and lower my cost of labor by 23%? If I
could do that why wouldn't I? If I were stupid enough not to do it,
wouldn't a competitor of mine do it and drive me out of business?
via Professor Mark Perry at Carpe Diem.
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