Question

Women Bouncers Rapidly Grow in Numbers, Earn More than Male Counterparts Women bouncers have not just broken the proverbial glass ceiling in the country but also rapidly grown in numbers as concerned parents, cautious event managers, and pub and restaurant owners all seek their services. Security agents estimate that in just the past one-anda-half years, the number of women bouncers in India has grown fourfold to about 5,000 Unlike most other jobs, where gender disparity is prevalent to the disadvantage of women, in this profession women often get paid more than men- their wages range from Rs 1,500 2,000 per shift along with conveyance compared with \(\mathrm{Rs} 800-1,200\) offered to men. Source: The Economic Times, March 14,2015 a. Draw a graph to illustrate why discrimination could result in female bouncers getting paid more than male bouncers. b. Explain how market competition could potentially eliminate this wage differential. c. If customers "prefer dealing with women bouncers", how might that lead to a persistent wage differential between men and women bouncers? Use the following data to work Problems 16 and 17 In 2010,828,000 Americans had full-time management jobs that paid an average of \(\$ 96,450\) a year while 4.3 million Americans had full-time retail sales jobs that paid an average of \(\$ 20,670\) a year. Managers require a high school certificate while retail sales people don't but they undergo training. Source: Bureau of Labor Statistics

Short answer

Discrimination and customer preference can cause female bouncers to earn more. Market competition can reduce but not entirely eliminate this wage gap.

Step-by-step solution

- Understanding Wage Discrimination

Discrimination occurs when workers of equal productivity are paid differently based on characteristics such as gender. Women's wages in the bouncer profession being higher suggest a form of discrimination that favors them.

- Drawing the Graph

Draw a supply and demand graph. On the x-axis, plot the quantity of bouncers, and on the y-axis, plot the wage rate. Show two demand curves, one for male bouncers (D_m) and one for female bouncers (D_f). The demand curve for female bouncers should be higher to reflect a greater preference for their services. The supply curves (S_m and S_f) can be shown as well, but less significant in this context.

- Market Competition and Wage Elimination

Market competition can potentially eliminate this wage differential. If female bouncers are initially paid more, more women may join the profession, increasing the supply (S_f). This reduces female wages. Concurrently, fewer men may enter or more men leave, reducing male bouncer supply (S_m), which increases male wages, thus reducing wage disparity.

- Persistent Wage Differential Due to Preference

When customers prefer dealing with female bouncers, the higher demand (D_f) for their services can maintain a higher equilibrium wage for female bouncers. The demand curve for female bouncers stays higher, which causes their wages to remain persistently higher than those of their male counterparts.

- Comparing Manager and Retail Sales Person Jobs

Analyzing the provided labor data: managers require a high school diploma and have higher average wages (\text{829,000} managers at \(\text{96,450}\)), while retail salespersons do not require formal qualifications but are trained on the job (\text{4.3 million} at \(\text{20,670}\)). Different qualifications and job tasks partially explain wage disparities between the two.

Key concepts

Gender Wage Gap

Wage discrimination occurs when individuals of similar productivity receive different pay based on characteristics such as gender. In the case of women bouncers, they earn more than men, which is an unusual scenario compared to most other professions where women tend to earn less than their male counterparts. The gender wage gap here is reversed due to higher demand for female bouncers, resulting from preferences of customers and employers. These higher wages indicate a positive discrimination favoring female bouncers.

Labor Supply and Demand

The labor market for bouncers can be depicted using supply and demand curves. On a graph with quantity of bouncers on the x-axis and wage rate on the y-axis, we can draw two demand curves: one for male bouncers (D_m) and one for female bouncers (D_f). The D_f curve is positioned higher than D_m to show the greater preference for female bouncers. If the supply of female bouncers (S_f) grows as more women join the profession, their wages can decrease due to increased supply. Conversely, a smaller supply of male bouncers (S_m) can lead to higher wages for men. This interplay between supply and demand helps illustrate wage disparities.

Market Competition

Market competition affects wage disparities. If women bouncers are initially paid more, more women may be attracted to the field, boosting the supply of female bouncers (S_f). This increased supply can lead to lower wages for female bouncers over time. At the same time, fewer men may choose the profession due to lower pay, reducing the supply of male bouncers (S_m) and pushing their wages up. Thus, competition in the labor market has the potential to narrow or even eliminate the wage differential between male and female bouncers.

Equilibrium Wage

The concept of equilibrium wage is vital in understanding wage determination. The equilibrium wage is where the supply and demand for labor intersect. In the case of female bouncers, a higher demand for their services shifts their demand curve (D_f) upwards, resulting in a higher equilibrium wage compared to their male counterparts. If customers continue to prefer female bouncers, this higher demand can maintain a higher equilibrium wage. Therefore, despite more women entering the profession and increasing supply, the sustained higher demand can keep their wages persistently above those of male bouncers.