That's my take on it anyway. I thought some of you might be interested to see the archaic revived....
By Cait Murphy, Fortune assistant managing editor
June 5 2007: 7:26 AM EDT
NEW YORK (Fortune) -- It's baaaack!! Yes, "comparable worth," which faded out around the same time the Bay City Rollers were disbanding, is making a comeback, under the euphemism "pay equity". To wit: the Fair Pay Act of 2007. The Act notes the existence of wage differentials between men and women.
This is true; according to the Bureau of Labor Statistics, in 2005 female full-time wage and salary workers made 81% of what men did; (click here on "women's earnings" in PDF). What is more dubious, though, is the assumption that is the heart of the Fair Pay Act: that discrimination is the reason for all or most of the difference. And the act's remedies are absurdly misguided, injecting the federal government into the most routine pay decisions.
...The the Fair Pay Act, despite its anodyne title (who's against fair pay?) is the result of profoundly unserious economic thinking. Let's start with the dubious. To the Fair Pay Act's backers, the simple fact that women make 81% of men's full-time earnings is in and of itself proof of discrimination, past and present. Only a pig-headed sexist would argue otherwise.
Or maybe not. June O'Neill, a certifiably female economist who served as director of the Congressional Budget Office under President Clinton, wrote a peer-reviewed paper for the American Economic Review (May 2003), trying to account for the pay gap. What she found was that women are much more likely over the course of their lives to cut back their hours or quit work altogether than men.
More precisely, of women aged 25-44 with young children, more than a third were out of the labor force; of those women who did have jobs, 30% worked part-time. (The comparable numbers for men were 4% out of the labor force and 2% working part-time).
All told, women are more than twice as likely to work part-time as men and over the course of their lifetimes, work outside the home for 40% fewer years than men. That accounts for a significant chunk of the pay gap. Then there is a more subtle factor. Despite the many advances the women's movement has brought the U.S., what it hasn't done, thank heavens, is make men and women the same. The simple fact is - and there is nothing nasty or conspiratorial about it - the sexes continue to choose different avenues of study and different types of jobs.
Here's an illustrative example. The college majors with the top starting salaries, according to the National Association of Colleges and Employers, are: chemical engineering (almost $60,000), computer engineering, electrical engineering, industrial engineering, mechanical engineering. Men make up about 80% of engineering majors. Women predominate among liberal arts majors - whose salaries start at a little more than $30,000. Putting it all together, OšNeill figures that these differences - in choice of work, years in the workforce, and hours of work - could account for as much as 97.5% of the differences in pay between men and women. "The unadjusted gender gap," she concludes, "can be explained to a large extent by non-discriminatory factors."
The pay equity activists insist that O'Neill (and other economists, most of whom agree with her on the basics) miss the point, which is that the discrimination is not so much against individual women as against women's work. Women are more likely to be in jobs that are dominated by women, such as elementary school teacher and librarian; men in jobs dominated by men, such as engineers and plumbers. And men's jobs, on the whole, pay more.
As Harkin notes in his explanation of why he introduced the Act, social workers (mostly female) make less than probation officers (mostly male), "even though both jobs require similar levels of skill, effort and responsibility." The Fair Pay Act is meant to solve this. But what, exactly, is the problem? If more women than men want to become social workers, knowing full well that this is not a high-paying job - well, so be it. If they want to be paid as well as parole officers, then they should become parole officers.
Discrimination occurs when people are barred from professions for which they are qualified, or paid less for doing the same job. It is not discrimination to freely make a choice that has an undeniable economic consequence. Call me an oversensitive female, but I detect a large dollop of patronization here. The theory behind the Fair Pay Act is that the labor market intentionally sets wages in a way that is unfair to women - and apparently we are so stupid that we fall right into this trap, repeatedly making non-rational choices (not just different ones).
Again, the facts suggest otherwise. Since 1979, as more women have entered and stayed in the labor force for longer periods, the pay gap has narrowed, from 63% then to 81% now. Over the same period, according to the BLS, women's earnings have grown much faster than those of men. Women who work part-time actually make more than men who work part-time; and never-married women make almost exactly as much (96.7%) as never-married men.
If the market was so rigged against women, it's hard to see how we benighted females could have made this kind of progress. Is there such a thing as sex discrimination in the workplace? Of course; most of us have seen, heard or experienced at least one situation in which a certain odor of sexist unfairness has stunk up a personnel decision (sometimes against the male of the species). Perhaps that accounts for the couple of percentage points that OšNeill had left when she had crunched the numbers.
The American Association of University Women favors the Fair Pay Act; even so, in its recent report, "Behind the Pay Gap," it concluded that, "after accounting for all factors known to affect wages, about one-quarter of the gap remains unexplained and may be attributed to discrimination." That comes out to about five percentage points - double OšNeillšs estimate, but less than horrifying.
The Fair Pay Act takes a sledgehammer to deal with this gnat-sized differential. Under its provisions, the Equal Employment Opportunity Commission (EEOC) would create criteria determining whether a given job is dominated by one sex; employers would have to send the EEOC every year a listing of each job classification, the race and sex of those holding such jobs; how much they are paid; and how such pay was determined. The goal of all this is to ensure that people in "equivalent" jobs are paid similar wages. "The term, 'equivalent jobs', according to the legislation, "means jobs that may be dissimilar, but whose requirements are equivalent, when viewed as a composite of skills, effort, responsibility and working conditions." And who would decide what is equivalent? The federal government, of course.
