* pay equity is not

Topics: Regulation
05 Feb 2009

From: Ervan Darnell

Obama signed the "Lilly Ledbetter Fair Pay Act", which extends the conditions under which an employee has standing to sue the employer for discrimination [1]. Proper standing is a tricky issue, but what's disconcerting is that they did this not out of any sense of tort fairness, but as an effort to fix a non-problem of presumed gender discrimination in pay. While Obama didn't say that exactly, the fact that only this one aspect of tort was addressed makes it clear that was the reason.

Liberals (e.g. [2][3]) are disappointed this wasn't full "pay equity", and clearly that's where they are trying to go. I have yet to read anything that says "useful tort reform for clarifying standing."

"pay equity" for women, especially, is an idea so foolish I take it as evidence that liberals do not understand economics. It's not merely that they want more welfare, they just don't understand how anything works. I mention all of this because I saw the following editorial this morning from a Berkeley professor and "senior fellow with the Center for American Progress":

It's a familiar fact that women working full time earn 78 cents for every $1 earned by men. But this wage differential looks very different for women with and without children.

Single women with no children working full time make 96 cents for every $1 earned by a similarly situated man. [4]

In other words, there is no problem! Women who work as much as men get paid as much as men. Even "full time" is a misnomer here, it doesn't mean the same amount of time, it means the same number of hours on some given day. But, what does the author conclude? Just the opposite of course: that women should be paid for not working and then be paid the same as men despite less experience:

While some women choose to leave the workforce when a child comes along or a parent is ill, too many are forced to leave because they do not have the right to take time off from work for family

They absolutely have the right to take time off from work. It's called quitting.

The whole "78 cents" argument is just an unnormalized statistical factoid proving nothing. How about the discrimination against women of Norwegian descent who make less on average than Asian women? Is it because of discrimination? No, it's because they are more likely to live in rural areas where incomes are lower and women are more likely to be housewives. Better yet about the "safety equity". Men are far more likely to be killed on the job than women. The "pay equity" logic says that's because men are discriminated against when it comes to safety. The real reason is that men are far more likely to prefer (and be able to perform) dangerous jobs such as soldier, construction worker, and recreational drug merchant. Their getting killed more often on the job proves nothing about discrimination. Nor does pay inequity for women. The list of bogus statistical correlations is endl
ess. Liberals have no sane principle for choosing which ones matter and which ones don't. It's only a matter of which groups become politically visible, not any meaningful argument. The consequence of this reasoning is price controls that will mis-allocate labor and leave everyone poorer.


[1] http://money.cnn.com/2009/02/02/smallbusiness/fair_pay_act.smb/?postversion 09020212
[2] http://www.freep.com/article/20090201/BUSINESS07/902010372/1020/BUSINESS/Fair+pay+act+may+not+close+gap+soon
[3] http://site.pfaw.org/site/PageServer?pagename=media_2009_01_president_signs_lilly_ledbetter_fair_pay_act

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