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Charging 'Man Tax' Is Nothing Personal, It's Just Good Business

An Australian coffee shop gives priority seating to women and charges an optional 18 per cent "man tax" to reflect the earnings gap between men and women.

08/08/2017 11:10 EDT | Updated 08/08/2017 11:15 EDT
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Handsome Her, a vegan cafe in Melbourne, has become a social media sensation due to it's philosophy. The shop gives priority seating to women and charges an optional 18 per cent "man tax" to reflect the earnings gap between men and women in Australia. The funds raised from the tax are donated to women's charities.

Owner Alex O'Brien has a concern over the earnings gap and has said that: "We're bringing it to the forefront of people's minds. I like that it is making men stop and question their privilege a little bit."

The shop has received a heaping of criticism on social media, with some calling for a boycott against the supposed inherent discrimination of treating people differently for the same product and service.

This view misunderstands the philosophy of markets.

Regardless of one's interpretation of the earnings gap and its explanation, be it: a perceived institutional discrimination, or management mechanisms which lower the earnings potential of mother's, or even if one simply believes that this is the result in the differences in preferences en aggregate between men and women, one cannot deny its existence. Differing philosophies, explanations, moral attitudes or interpretations (wage vs. earnings) reflect the complexity of analyzing the situation, but this does not prescribe a moral stance.

This is where the shop is effective in remedying perceived issues through market mechanisms. To their customers, the gap in earnings is a moral issue, and as such they want to do something to rectify this. The clientele is self-selecting, not least because it is a vegan cage which has its own customer culture, but because of the moral stance of the owners.

[Handsome Her] uses price discrimination in a way that reflects the desires of its customers, and does not cause harm to those who choose not to shop there.

It is a well-documented phenomenon that developed societies factor in morals into their consumption preferences. For example, the environmental Kuznets Curve shows that at a certain point of economic development, individuals in a society begin to factor in the environmental impacts of products into their shopping. This means they prefer the more expensive, yet otherwise identical product, because they pay for its environmental effects.

The dynamic nature of free competition is such that it reflects the preferences of consumers. This cafe has chosen to represent the philosophy of its owners, and while that may not appeal to the largest potential market, it builds a community and loyalty among the customers who share their philosophy. The owners should both have the freedom to express this philosophy and factor that into their management ideals, as well as customers having the right to shop at places that reflect their culture.

A post shared by Handsome Her (@handsomeher) on

Independent shops of all sorts are self-selecting in terms of clientele: a restaurant with a certain cuisine attracts a certain customer, a Muslim book store appeals to those who read Muslim literature, and a store with a distinctly Christian management attracts those who share those values. Nobody is compelled to shop at any of these places, and their existence to cater to certain markets does not limit the range of choices available to others.

Shops such as Handsome Her, therefore, reflect the capacity for markets to bring about social change through providing opportunities for consumers to put their moral concerns into practice.

This is much better than using political means, which both provide infrequent opportunity and are winner take all. Whereas in politics, legislating for a certain practice necessarily means others not getting what they want, market activity allows everyone to achieve what they want to achieve through their choice.

It is clear then that Handsome Her is not discriminatory in the immoral sense of the term. It uses price discrimination in a way that reflects the desires of its customers, and does not cause harm to those who choose not to shop there. Social change that comes about through these means is a positive and inclusive trend, and more shops should feel comfortable to integrate their personal philosophy into their management.

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