The Free Market
The "Pay Equity" Racket
The Free Market 19, no. 11 (November 2001)
Most of us probably thought the feminist demand for so-called "comparable worth" legislation had died out sometime in the 1980s. The idea was that occupations traditionally held by women should have wage rates raised by government fiat in order to correspond with those of "comparable" male-dominated jobs. Surely no one is advancing this idea any longer. Surely!
But on June 22 of this year, Maine became the first state in the Union to promulgate rules requiring both public- and private-sector employers to pay a comparable rate to men and women who work at what the government determines to be "comparable" jobs.
This year alone, 67 similar bills have been introduced in 30 different states. In addition, the Fair Pay Act, which is pending in the US Congress, would criminalize differential wage rates in non-identical jobs that the government deems "equivalent."
The endlessly repeated claim, which has helped give rise to all this legislation, is that women are paid 72 cents for every dollar paid to men. Now it obviously cannot be the case that women are paid 72 percent of what men are for doing the same work, not only because that violates the Equal Pay Act of 1963, but also because in that case any employer in his right mind would simply fire all his male employees and hire women at the lower wage rate.
There is no need to assume anything sinister is at work in the fact that women's incomes are lower than those of men.
Many women who enter the labor force are aware that at some point they will have to interrupt their careers, probably for a matter of years, to take care of their children. Naturally, then, women are more likely than men to seek jobs with slow obsolescence rates that allow them to take time off without finding that their skill or knowledge has become outdated by the time they resume their careers. Married women tend to seek flexible working hours to accommodate their schedules. Many work only part time. Many would like to work near their homes. And so on.
These requirements place some restraints on what women are likely to earn vis-à-vis men. For one thing, such highly paid occupations as law and medicine are extremely difficult to leave and re-enter after a multi-year absence. Second, since many women seek the job criteria listed above, the result is a great many women competing for the narrow range of jobs that fit these criteria. Somewhat lower wages in these jobs are merely a reflection of supply and demand--the only rational way of allocating labor efficiently.
It turns out, incidentally, that single, never-married women of comparable education and experience and who work full time have the same incomes as their male counterparts. The so-called wage gap completely disappears once we stop comparing apples and oranges. Diana Furchtgott-Roth, President Bush's chief of staff for his Council of Economic Advisors, makes this point in Women's Figures: An Illustrated Guide to the Economic Progress of Women in America. So have many, many other economists who have bothered to study the data (and use common sense).
Even some feminists and labor leaders, apparently, realize this. But Karen Nussbaum of the AFL_CIO's Working Women Department, when presented with these figures, simply replied: "Great. OK. If you live a pristine life where nothing interferes, then you can have equal pay. We thought it might be better if it had a more broad definition." A fanatic has sometimes been described as someone who, once his goal has been reached, redoubles his efforts. What Nussbaum is saying, in effect, is that now that unmarried women of comparable background have reached effective pay equality with men, it's time to expand the concept into cases where it makes no sense.
The basic premise behind "comparable worth," the centerpiece of the Maine legislation, is that jobs done primarily and historically by women are systematically "undervalued" by the market. Presumably with a straight face, the US Civil Rights Commission once determined that librarians and chemists were of equal "value" to society, since both earned 493 points on the Commission's rating scale, and thus it was unjust for the former (mostly women) to be paid less than the latter (mostly men).
But the implementation of comparable worth, by raising the salaries of jobs traditionally occupied by women, will make it more difficult for women interested in these occupations to find employment at all. Artificial increases in wage rates (that is, increases not justified by increased productivity) in, say, secretarial work will simply translate into fewer secretaries hired.
Economist Anita U. Hattiangadi, author of A Closer Look at Comparable Worth, found that the unemployment rate for women jumped nearly 5 percent after Minnesota initiated an equal pay system for state government workers--an increase more than four times as great as that for men. There have also been cases in Minnesota's experiment with comparable worth in which women have actually tried to overturn the state's mandated wage increases because they feared unemployment.
According to the Maine law, if employees who are being paid less than another group believe they are being discriminated against because their work is of equal "value," they can file class action lawsuits seeking unlimited damages. Before year's end, quite literally every Maine businessman will be subject to ruinous legal action based on a completely arbitrary standard. It is hard to overstate how ill-considered, irrational, and potentially destructive this plan is.
And the idea is only gaining momentum. "I think that equal pay is probably the most potent and underrated political issue out there," Nussbaum said in a recent interview. "It comes out right at the top of every poll that gets taken. We're beginning to see it at the state level. In New York, there are about 20 bills; every legislator out there wants to get his or her name on this thing."
Naturally, under such a scenario, since everyone would be well aware of the arbitrary nature of comparable worth rulings, the result would be a mad frenzy of appeals to the state authority as to why this or that profession deserves higher wages. Wage rates would begin to reflect not worker productivity, but rather the skill at political jockeying and maneuvering on the part of lawyers and other representatives of various professions--not a particularly sanguine development for a free society.
There is an obvious irony in all this, one that reveals the sheer irrationality of feminist "economics." Why do feminists support comparable worth, whose higher wages for traditionally female occupations would encourage women to remain in such occupations, when feminists claim to want to see women break through barriers and compete with men for traditionally male-dominated work?
Of course, the notion of "pay equity," of state bureaucrats assigning points to various occupations, is the kind of absurdity we would have laughed at had it been done by Soviet commissars. But if the feminists and their allies in the labor movement continue to register these successes, no one will be laughing.
Thomas E. Woods, Jr., teaches history at Suffolk Community College (email@example.com).
Cite This Article
Woods, Thomas E. "The "Pay Equity" Racket." The Free Market 19, no. 11 (November 2001).