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.