Nafta doesn’t need a chapter on gender rights

Nafta doesn’t need a chapter on gender rights, by Nathan Keeble.

Canadian Foreign Affairs Minister Chrystia Freeland gave an outline of what her country seeks to achieve in the renegotiation of Nafta. … The Canadian government wants a new chapter on what it calls gender rights. …

Prime Minister Trudeau has emphasised gender equality in his cabinet, and they have even made similar moves for gender equality when renegotiating their trade deal with Chile.

Right on! That’s what trade deals are for.

In a free market, wages are determined purely by the productivity of the employee.

Few will question that the goal of a business is to generate as much profit as possible. The purpose of hiring an employee is to aid in producing the goods which enable them to do just that. The value which hiring that employee creates for a business, and by extension its customers, is the source of that employee’s wages.

In a free market, wages are determined purely by the productivity of the employee. Basically, that statement means that a person’s labor is as valuable as the anticipated additional revenue which a firm will gain by hiring them, or conversely lose by firing them. Markets tend to keep wages at this level. Why?

If an employee’s wages are bid too low for market conditions, competing firms will happily pay more to benefit from that employee’s productivity. The original firm would likely even increase the employee’s wages by itself to avoid losing them, much like Henry Ford had to do.

Notice that nowhere in that description was gender mentioned. Little to no wiggle room exists within a free market for employers to discriminate for anything other than the economic value an individual creates.

For an employer to do so would be both self defeating and unsustainable. For instance, if employers could purchase a woman’s equally productive labour for a lesser price than a man’s, the increased demand for female labor would very quickly bid wages to the correct level. Indeed, many scholars have shown empirically that women do in fact earn equal pay for equal work, despite claims otherwise. Hiring less efficient workers based on irrelevant personal factors is self-punishing.

Oh that ‘s so yesterday. Canada and Justin Trudeau have progressed.

hat-tip Matthew