'Comparable Worth' Rears Ugly Head in the Age of Obama
There are some public policy ideas that won't die -- no matter how bad they are. One of these is "comparable worth." It is built on the misguided policy notion that there is a gap in pay between men and women that cannot be accounted for except by subtle gender discrimination. And it survives by confusing the public that the only goal is to assure men and women performing the same work are paid "equally."
The basic idea behind comparable worth is that the government will determine which jobs are "comparable" -- a truck driver and a school teacher, a welder and a nurse -- and mandate that they should be paid equally. The theory is that those sneaky schools and hospitals evade the free marketplace in determining wages, taking advantage and "undervaluing" those jobs with higher percentages of female employees. Government will sort all that out and restore "gender fairness." The CEO of the Center for Equal Opportunity, Roger Clegg, writing in 2008 reminds us:
President Ronald Reagan correctly called comparable worth "a cockamamie idea." A great lesson of economic theory, not to mention historical experience, is that government-set wages and prices not only curtail freedom, but lead to shortages, surpluses and market disruptions.
The goal is a government-controlled system of wage controls which mandates which jobs have the same intrinsic value as others and requires employers to rework their wage scales or face unrelenting litigation. What administration could be in favor of such pervasive meddling in the private sector? Well, this bad idea may have found a home in the Obama administration, which has no problem directing private firms' compensation and determining which employees are receiving "excessive" payment for their labor.
Federal law since passage of the Equal Pay Act of 1963 has prohibited employers from paying men more than women for doing the same job. (And women more than men.) But liberal women's rights activists have persisted in claiming that women still face wage discrimination against men. We heard in the Obama campaign the claim that women are only paid 77% of what men receive. But that figure is highly suspect. As the Wall Street Journal reported, the actual figure for all women's median pay is 80.2% of men.
But even that may be wrong. In their study Women's Figures: An Illustrated Guide to the Economic Progress of Women in America, Diana-Furchott Roth and Christine Stolba determined that when a variety of factors are accounted for, including experience, part time work, skill level, etc., the wage differential is virtually nonexistent. They point to women between 16 and 24 who earn on average 92% of men. Another study by June O'Neill of the American Economic Review puts that figure at 98%. Moreover, without any massive government intervention into the economy, the "problem" over time is steadily correcting itself.
Proponents of female victimhood, of course, do not mention that men in the current recession are being laid off in numbers that vastly exceed women. This report notes:
Since the recession began in December 2007, more than 80 percent of those laid off have been men, thanks to their disproportionate slice of jobs in hard-hit fields such as construction and manufacturing, according to government data. In November, women held more than 49 percent of jobs in the country. And since many are with more stable employers such as schools and hospitals, the U.S. Bureau of Labor Statistics suggests women soon could outnumber men in the workplace for the first time in the nation's history.
No men's movement has yet arisen for "gender equality in layoffs."
Nevertheless, the comparable worth movement marches on. Comparable worth, as Clegg explained in a recent AEI publication, is not really about actual data, but about subjective views of those who contend certain jobs should be paid more. He wrote:
[W]hat comparable worth is about is the government requiring that a man doing one job and a woman doing another, different jobs be paid the same amount, on the grounds that, in someone's opinion, the two different jobs have "comparable worth."
Two versions of comparable worth that been rattling around Congress for some time would impose this arcane system of government-controlled wage "fairness" on employers: the Fair Pay Act and the Paycheck Fairness Act. The latter passed the House earlier this year. It drew criticism even from the Washington Post, which explained:
The Paycheck Fairness Act contains some reasonable measures, such as protecting workers from retaliation if they question pay structures. But it also potentially invites too much intrusion and interference with core business decisions. For example, the new bill allows employers to defend against lawsuits by proving that pay disparities between men and women were based on "bona fide" factors, such as experience or education, and that these factors are tied to business necessities. Fair enough. But the bill also says that this defense "shall not apply" when the employee "demonstrates that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice." But what if the employer has refused because it has concluded that the alternative is, indeed, more costly or less efficient? What if the employee and employer disagree on what the "business purpose" is or should be?
The idea behind the Paycheck Fairness Act is to tangle employers in endless rounds of litigation. Each and every employee would have a ready-made lawsuit if she could identify some job -- even one in a different field or held by more experienced workers -- which paid more than hers.
The bill is now sitting in the Senate. Some speculate that with the passage of the Lilly Ledbetter Fair Pay Act, which reversed a recent Supreme Court case and in essence abolished any meaningful statute of limitations on claims under the Equal Pay Act, the heat will be off to move forward on comparable worth.
But that may be wishful thinking by those who underestimate the Obama administration's desire to manipulate the free market system for its desired social ends. After all, if the government can decide which cars GM will build, which bank CEOs can keep their jobs, and what bonus is "too excessive," there is little to prevent it from reaching into the workplace in the name of "gender equality."
And liberal women's groups are already agitating for more action from the Obama administration. So it would be quite understandable if the president would take up this cause, particularly as other agenda items stall and his special interest supporters lament the lack of progress on everything from card check to cap-and-trade.
The Obama administration is certainly sympathetic to the notion that the free market is "broken" and that compensation is somehow not subject to competitive forces. So it would, in some ways, be entirely natural for them to take up the cause of "finally fixing" gender inequality in the U.S. The result would be a gift to the trial lawyers -- but, come to think of it, rewarding a favorite Democratic political ally would only add to its allure.
Those who fear further politicization of the economy and the spread of rampant litigation should remain vigilant. Comparable worth is a bad idea which may find a willing advocate in the current administration. It is a bad idea that might just have found its time.