A recent comprehensive US study from Standford and Chicago Universities (and published by the National Bureau of Economic Reserach) into the income earned by male versus female Uber drivers has created some interest. Specifically the study concluded that men earn some 7 percent more per hour from driving for Uber than women do.
In the heat of today's obsession with gender rights, "#MeToo" and the like, the article on Uber has interpreted by some as yet another example of women being downtrodden in the workplace. Specifically an interpretation in a Sydney newspaper concludes that there are "deeper reasons" such as unbalanced housework allocation in Uber-driving families. Wow!
I suggest a contrary interpretation. Rather than see this Uber analysis as yet more evidence for unfairness between the genders, the study actually indicates the equality of pay. The study is very useful in that the starting point for Uber drivers is that we would expect them to earn the same hourly income, unless there is discrimination. But the study found no discrimination by customers towards the gender of Uber drivers. The fact that men earn more is explained by three variables. Firstly, men stay longer as Uber drivers and so become more experienced. Secondly, men are willing to take more dangerous shifts and in more dangerous locations. And, thirdly Uber men drive faster than the Uber women. Put another way there is no difference between the 'base' income earned by a male versus a female Uber driver. It is rather the method by which those drivers go about the business of driving, and the experience they gain. As it turns out men have a tendency to take greater risks while doing their job. Risks of picking up passengers in difficult areas and risks associated with driving faster. Hence the difference in incomes between men and women is a simple reflection of a risk premium attached to the way that men go about their job and an experience premium.
The context of this discussion is that increasingly governments and pressure groups are pushing institutions and companies to force an equality between gender representation and gender pay. The new prime minister of New Zealand is the latest to join this bandwagon in her call for companies to employ more women directors.
This columnist believes that this enforcement will place those women who gained the job by their own talents into a category where they are dismissed as quota women.
And if you go down the road of quotas why is it that only gender quotas are discussed. Why not quotas to accommodate other discriminations in the workforce: bias against older workers; discrimination against 'New Australian' workers and discrimination against handicapped workers.
That said, it remains surprising that many companies do not see the natural benefit of employing women onto their boards of directors. It is difficult to understand that a board of directors of a company engaged in the retail sector or in other services would not see the added perspectives which would come from having women on the board. It is difficult to understand how companies with international dimensions or aspirations would not see the benefit of 'New Australians' on their boards, as such people would bring insights into foreign cultures, markets, languages and contacts.
However it appears to this writer that the question of pay differences in Uber pales into insignificance when compared to the more pressing problems of reduced working conditions, reduced working hours and reduced pay for those people engaged in the so-called 'gig economy'. Increasing numbers of young people are now facing lower wages, shoddy conditions, lower protections and lower dignity of work then previous generations who had full-time jobs.
One group of such vulnerable workers in retail and hospitality has recently been dealt a substantial blow to their incomes due to a decision by Parliament to wind back pay penalty rates. Politicians, the most selfish and greedy group in Australian society, did nothing to protect the pay of those vulnerable low-paid workers against this change.
A report by the Organization of Economic Cooperation and Development has just pointed out the declining capacity for wage justice for workers in the OECD, including and notably in Australia. This has been made possible by the decline in Unionism and the decline in collective bargaining. These issues are now of pressing concern. They will affect generations of workers and their families in terms of their ability to buy homes, their ability to build superannuation packages for their retirements, and their ability to feel a part of a fair society. These trends will worsen the growing inequality of income and inequality of wealth in Australia.
In sum this columnist suggests that the current obsession with gender pay equality is a luxury which younger people can no longer afford. The far bigger issues of declining pay and conditions for both genders is far more important.
Mike B. Bradshaw has been an officer of the Treasury, Canberra, an investment banker, and a consultant in Europe, the USA and Asia. He now works on project financing.