Women’s Work

A federal judge has ruled that a sex-discrimination suit against Wal-Mart Stores can proceed as a class action, which could lead to a huge loss for the megastore. Up to 1.6 million women could join the class action, and at a few thousand apiece it could cost Wal-Mart billions.
Baltimore trial lawyer Peter Angelos made enough from his asbestos lawsuit work to buy the Orioles. Lawyers’ fees in this case could buy the entire American League.
This is not the first big case involving women’s wages. Coke, Home Depot, and Texaco have paid more than $100 million each in such lawsuits.
Now I don’t want to quarrel with any of these decisions. Who knows what went on? How could American courts be wrong? But I call your attention to a larger version of this alleged discrimination, the oft heard claim that women earn, on average, 70 percent of men’s salaries. NBC News this evening cited this figure as a virtual national scandal. Should an Equal Rights Amendment pass, you can bet that lawsuits would follow gigantic enough to make Senator John Edwards dance with anticipation
Any economist worth his or her salt will immediately wonder where this 70 percent number came from and how it would be changed if it accounted for differences in experience, education, difficulty of jobs, and the other factors that affect the demand for a person’s labor. This requires rigorous analysis, not just quoting some data.
But where do you find such analysis? Well, you go to one of my favorite websites, www.iwf.org, the home page of the Independent Women’s Forum. This organization published a report called “Women’s Figures” that challenges the 70 percent shibboleth, and they keep up to date on other such issues, presenting a clear, market oriented analysis in a lively format. Yes, they are conservative women!
Maybe women economists should get a raise!

Reel Money: Should Taxpayers Finance Movies?

The State Investment Council has just agreed to lend $7.5 million at zero interest for three years to finance the production of a movie to be filmed in New Mexico. The film will tell the inspiring story of a man and his grandson who drift into Mexico and both fall in love with the same prostitute.
The opportunity cost of making such a loan is around $1 million, that being the returns that could be had by investing the money elsewhere. There is also an element of risk to be considered: presumably the loan is unsecured by property, and who knows how the production company figures its profits and hence its ability to repay the loan.
It’s said that 97 film jobs will be brought into the state, but only for the duration of shooting. That figures out to about $10,000 per job, some or perhaps most of which will go to movie makers brought in from Hollywood.
Is this a good deal for New Mexican taxpayers? Probably not. But as usual, we aren’t given enough information by the state to make a reliable calculation.
But one thing is for sure: No one will ever make a film in New Mexico without first paying a visit to Santa Fe to pick up some free money.