Wed 25 Apr 2007
Too Expensive to Hire Women?
Posted by RichSlick under Watch Out
[5] Comments
I had lunch with an old friend yesterday and we talked about how well his business was doing these days. My friend owns a small consulting firm and has about six people working for him. The topic of conversation eventually turned to the gripes he had about running a business.
The main gripe was the high cost of labor. It seems he’s been having a difficult time finding qualified people to fill some of his positions. He said many kids out of school today all want to start out at 60k or better. Worse yet, however, was the cost of health insurance he has to subsidize to get “bodies†thru the door.
What really struck me odd though was the fact that right off the bat; he has to pay $150 more a month to provide the same coverage of health insurance for a female than a male employee.
If I had to run a small business, I might think twice about hiring a woman if this is true. I never really thought about the disparity in health insurance between men and women until he mentioned it to me.
If I ran a company and I had 10 open positions and the choice was between paying $3000/month to cover all male employees or $4500/month to cover all female employees, the business decision starts to become pretty clear: $18,000 more to pay for women employees. That’s a big bite into profits right off the bat.
Rich,your the first I’ve seen to talk about this taboo subject.I wasn’t even aware of the insurance price gap.
The case could also be easily made that obesity and smoking are also very expensive for companies to deal with.
c, I always thought there was some law mandating insurance cost the same for everyone because when I ask around the only difference in what people pay seems to be for those that are single or those who are married.
it turns out the employer has been picking up the tab on the back side probably to avoid the blatant disparity with the employees.
I could only imagine the fiasco if a female employee found out she was paying $150 more than her male counterpart for the same health insurance plan.
Perhaps this helps explain why women supposedly earn $0.76 for every $1.00 a man earns; the employer is subsidizing the health insurance and there’s no such thing as a free ride!
Interesting, I never knew. On the tobbaco and obesity bit there was businessweek cover story talking about companies trying to control their health care costs by basically incentivizing people to lose weight and or quit smoking. I think that’s smart. Gender, not sure how or if you should control for that cut costs…
Being fat is not a protected class. Being female is.
Perhaps the issue is who is paying for the insurance, i.e. not having a single payer system. Do that and you’ve just eliminiated the cost disparity.
I guess the question then becomes, why isn’t ALL insurance based on “equal” payer system?
Why do some people pay more for life insurance than others? Why do some drivers pay more than others? It seems we have rational thinking plans for insurance but when it comes to health insurance we impose all sorts of crazy rules.
If a drunk driver frequently crashes his vehicle it makes sense that he should pay more for insurance.
If a person who is a drug addict and has a history of disease (hepatitis, aids, etc) it makes sense that he/she should pay more for life insurance than someone else.
If a woman ends up going to the doctor more frequently (for whatever reason) or has higher cost treatments (for whatever reason) why shouldn’t they pay more for insurance?
People will quickly cry “discrimination” but never bother looking into the real reason why disparities exist in the first place.