Fair Pay & Senators MIA

In addition to being Earth Day today also serves as Equal Pay Day. Senate challenger Rick Dollinger is taking the opportunity to challenge local Senate incumbent Joe Robach (R,C,I,WF) on his stance over the New York state Fair Pay Act legislation that has been debated in the legislature recently via a public demonstration at Robach’s district office:

“Joe’s flip-flopping is both condescending and wrong – it’s classic Albany politics,” said Rick Dollinger. “It takes a lot of nerve to duck an issue by passing a study bill and then claim to be a champion, but it’s hardly surprising.”

Below is a repost of my article from last week which includes an overview of the Senate debate, Robach’s alternative bill and the truth about pay gaps between men and women. Reposted for Equal Pay Day and all you knuckleheads who did not read it the first time.

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My wife is pregnant with our second son and is due end of May/early June and she still, bless her, is working four days a week despite the fact she’s as large as a house.

She makes less money than I do despite the fact that I could not even fathom working, much less actually doing so effectively, in her current condition.

A strange, and as of yet unexplained, introduction I know. I swear it will pay off in the end.

Much ballyhoo recently around debate in the New York state legislature over Senate bill 3936, the so-titled New York state Fair Pay Act. The legislation is at first a noble and wholly right bill seeking to bring the pay scale for men and women in the workplace into equity with one another.

Capitol Confidential had a nice little series starting on Monday when Irene Jay Liu was hassled as she attempted to take video of the Senate floor debate as local Senator Joe Robach (R,C,I,WF), that’s WF as in Working Families, argued for S.7521 – the GOP counterpart to 3936.

CapCon returned to the Chamber on Tuesday to film the beauty of our legislature in action:

I came and taped what is a time-honored tactic used by Senators who don’t want to go on record as voting against something: leaving the chamber when another lawmaker calls for a motion to petition, which if approved, would move a bill out of committee to the floor for a vote.

The catch is, it takes a simple majority of the 62 senators in what is essentially a non-role call vote to move to petition. So if lawmakers don’t like the measure being petitioned, but fear it may look bad to oppose it, they can simply leave the chamber when the motion comes for a vote. Thus Tuesday’s near-empty chamber.

The strangeness continues as Robach’s opponent bill passed the Senate by a unanimous vote. And this is where I saw the first hint of that ugly beast known as politicization of an issue for personal gain in an election.

I battled the monster during the SCHIP debate and it appeared the Beast had again returned to feed.

The reason the Dems had to vote for Robach’s bill was the same reason the GOP could not be seen voting against bringing 3936 out of committee. Imagine the following two scenarios if the opposite had occured in the aforementioned instances:

1. GOP Senate candidate X: “My opponent did not vote to increase penalties on companies who discriminate against women/minorities in the workplace. Vote for me and I will fight for equitable wages!”

2. Dem Senate candidate (say Rick Dollinger): “Joe Robach did not vote for equitable pay between men and women/minorities in the workplace!”

When a bill becomes so political I have found it is likely a stinker so I began to dig.

S.3936 seeks to pay women, men and minorities equally:

IN JOBS THAT ARE DISSIMILAR BUT THAT REQUIRE EQUIVALENT COMPOSITES OF SKILL, EFFORT, RESPONSIBILITY AND WORKING CONDITIONS

All right. Basically, paying a woman the same wage for a job as a man who does a different and likely completely unrelated job and using the government to establish a scale for how this should then be done while administering and enforcing the legislation.

Now even if I agreed with this illogical and socialist idea, and giving the government arbitrary control over wage scales is socialist, my first question would be who is going to decide what job is equal to another and how would he or she do that? Don’t look to the bill for answers to that question, it doesn’t have any.

However, as an issue that has been beaten around since the mid-80’s, models from so-called comparable wage advocates have included a point system where different values are assigned to aspects of one’s job like the amount of education needed for the position, the degree of hazard or risk of injury faced, managerial duties and so on.

Despite the fact that such a point system would be completely subjective, imagine the hostility created in our society.

Successful white male: “Hey (insert minority or female name here), what’d you get for a Life Score (see, the company that New York state would outsource the scoring system to would call it Life Score)? Oh, only a 47? Too bad you didn’t go to a four year college and now oversee a staff of 23 people like I do, you would’ve scored much higher! Later (insert minority or female name here)!

See? Kind of just beating the proverbial dead horse.

However, advocates of this system say this is not a debate about paying secretaries the same as truck drivers; but, one of the few case studies for such a program in the United States begs to differ. Minnesota state government actually embarked on a journey down the path of pay equity and found it to be by all means be a matter of truck drivers and secretaries:

A policy to establish pay equity usually means: 1) that all jobs will be evaluated and given points according to the level of knowledge and responsibility required to do the job; and 2) that salary adjustments will be made if it is discovered that women are consistently paid less then men for jobs with similar points. The following example from a 1982 evaluation of state government jobs shows a typical sex-based wage disparity.

Job	Job Evaluation Score
Delivery Van Driver (mostly men)	117 points	$1900 per month
Clerk Typist (mostly women)	117 points	$1400 per month

Under this same system in St. Paul, MN the city’s librarians were scored the same as the firefighters:

St. Paul is a city whose experience with the law typifies that of local government across the state: $32 million in additional salary expense between 1985 and 1992, endless disputes about who is comparable to whom, and lingering uncertainty if the city is even in compliance with the law at all.

But maybe this debate is not about secretaries and truck drivers, it is more likely about the magic number that serves as the rallying cry in this discussion: women make 81 cents for every dollar earned by men.

There is one reason given by comparable worth advocates for the above figure: discrimination. Advocates overlook the fact that women work fewer hours a week on average and fewer weeks a year because apparently the vast majority of business owners and those doing government hiring are just sexist bigots. Which I guess makes more sense than the figure being a reflection of free market factors, the employment patterns for females and the simple biological differences between men and women.

But let’s just pretend my latter statement, as whacky as it sounds that this would be natural rather than the result of white male cheuvisnism, were correct. If I were to actually believe that statement, I know it is crazy, I wouldn’t be alone.

Linda Chavez, who was head of the U.S. Civil Rights Commission when such a plan was considered on the federal level in 1985, had the following to say about comparable worth legislation:

Under comparable worth, employers would be required to rate jobs according to abstract notions of intrinsic value based on years of education required for a given job, the level of responsibility it entailed, and working conditions involved. In a free market, however, wages–like prices–are set primarily by supply and demand. Diamonds are not intrinsically more valuable than water (which is necessary to sustain life). But diamonds are in short supply relative to demand, which is why a one-carat solitaire costs a whole lot more than a bottle of Evian. Similarly, it may seem “unfair” that tree-trimmers earn more than day-care workers, but the relative supply of the former compared with the latter explains the differential.

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The “remedy” is not to pay less for jobs that are dominated by men but to encourage more women to become electricians or tree-trimmers. This was the conclusion of the U.S. Commission on Civil Rights after extensive research and public hearings in 1985 when I directed the agency. We opposed comparable-worth legislation and lawsuits, arguing that such efforts would actually discourage women from breaking out of sex-stereotyped roles and undermine the free market system.

Chavez noted in another article on pay equity the effects such a system had when implemented in Australia:

Australia has had a variation of comparable worth in both the public and private sectors since 1972. Within five years of enactment of its law, female unemployment in Australia rose, the number of women working part time increased, and the growth of female participation in the labor force slowed.

Do I believe the Australia figures? Yes. If faced with such a directive do you think the normal business would pay full-time employees more for the same job or find a way to control costs through temp-hires and automation? If we are to believe that said owner is evil enough to discriminate in the first place certainly we cannot expect that same owner to then pay his minority employees more simply because it is directed.

But hell, let’s throw that argument out too since Chavez is nothing but a stinking Regan Republican and Australia is lame.

Let’s ask Greg Mankiw, professor of economics at Harvard (Harvard people!) University, what he thinks:

Most economists are critical of comparable-worth proposals. They argue that a competitive market is the best mechanism for setting wages. It would be nearly impossible, they claim, to measure all of the factors that are relevant for determining the right wage for any job. Moreover, the fact that traditionally female occupations pay less than traditionally male occupations is not by itself evidence of discrimination. Women have in the past spent more time than men raising children. Women are, therefore, more likely to choose occupations that offer flexible hours and other working conditions compatible with childrearing. To some extent, the gender gap in wages is a compensating differential.

Economists also point out that comparable-worth proposals would have an important unintended side effect. Comparable-worth advocates want the wages in traditionally female occupations to be raised by legal decree. Such a policy would have many of the effects of a minimum wage . . . In particular, when the wage is forced to rise above the equilibrium level, the quantity of labor supplied to these occupations would rise, and the quantity demanded would fall. The result would be higher unemployment in traditionally female occupations. In this way, a comparable-worth law could adversely affect some members of groups that the policy is aimed at helping.

Gee, just like we saw in the Australian real world application of the policy.

But hell, let’s just throw out Mankiw’s argument as well since he’s a stinking man and, let’s be honest, Harvard is really more of a party school anyway. We are big fans of numbers here at the WBP so we’ll take a look at those.

The numbers seem to bring me back to my earlier statement about wage differences being a reflection of free market factors, the employment patterns for females and the simple biological differences between men and women:

…the foregoing nondiscriminatory explanations clearly explain most of the differential; an estimate by a member of the U.S. Commission on Civil Rights is that all but eleven percent of the differentials can be explained this way.^{1, 2} If discrimination against females accounted for the entire remaining differentials–an outcome which is very unlikely–it would still account for only 11 percent of the differential at most.

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In January 1983, men working full-time had been on the job an average of 5.1 years; the average for full-time female workers was 3.3 years.⁴ Obviously, these figures reflect the fact that women are less attached than men to labor force participation. In light of this fact, it is not surprising that women choose to interrupt their employment more often. They invest less in education and training, because their payback is less. They are less likely to undergo long periods of training and hence to reap the rewards thereof. A 1977 study concluded that differences in turnover and job-specific training accounted for 67-100 percent of the overall male/female wage differentials within occupations. Not surprisingly, the proportion of women employed in an occupation varies inversely with the amount of the on-the-job training required.⁵ Much as some may lament the fact, women are predominant in occupations where quitting and entry are easy.

Another factor widely ignored in comparing male/female wage differentials is the number of hours worked. Bureau of Labor Statistics data usually refer to wages received by “full-time” workers. “Full-time” is defined as thirty-five hours or more per week. This definition leaves considerable room for sex differentials in the amount of time worked. Consider that in one year (1982), 24.0 percent of male workers, but only 10.0 percent of female workers, worked over forty hours a week. Indeed, differences in hours worked accounted for 9.2 percent of the overall male/female wage gap in 1982.⁶

Additional numbers indicate that in younger generations the wage difference between men and women shrinks showing (Egad!) corrections in pay inequities through the natural workings of the free market system:

In 1988 the ratio of women’s to men’s hourly earnings in the United States was around 70 percent. This ratio was close to 90 percent at 20 to 24 years of age and 80 percent at 25 to 34 years, but it was only 63 percent at 45 years of age and older.

June Ellenoff O’Neill (don’t tell anyone but she’s a woman), who provides us the above numbers, also has her doubts about a comparable worth system:

The imposition of comparable worth would likely raise pay in traditionally female jobs; appointing persons favorable to the concept to conduct the job evaluation would all but guarantee that result. But because the higher pay in female jobs would raise costs, employers would reduce the number of such jobs, by automating or by reducing the scale of operations, for example. Workers with the most skills would be more likely to keep their jobs, while those without the skills or experience to merit the higher pay would be let go. The ironic result is that fewer workers would be employed in traditionally female jobs. While the higher pay might induce more workers to seek these jobs, the reduced demand could not accommodate them. Less skilled women would lose out to more skilled women and, quite possibly, to men who would be attracted by the higher pay. What’s more, some employers would respond to the higher wages by providing fewer of the nonmonetary benefits (like flexible hours) that help accommodate the needs of someone who dovetails home responsibilities and a job.

The few instances where comparable worth has been implemented in the United States tend to support those conclusions. Thus far, comparable worth has been almost entirely confined to the civil service systems of about twenty state governments and a number of local governments. When Washington State implemented comparable worth, according to one study, the share of state government employment fell in those jobs that received comparable worth pay adjustments. The largest relative declines in employment were in the occupations that received the largest comparable worth pay boosts. Other studies have found that Minnesota’s well-known comparable worth plan has reduced employment growth in female jobs relative to male jobs.

But hell, let’s throw out all these arguments.

Which brings me back to my wife. I told you we would get there.

Under the theoretical comparable worth system my wife and I would not likely have the same score, but would she be given extra points for working while pregnant?

That question is the sticking point for me. Even if I forgot about the ludicrous nature of the proposal and the likelihood that such a system would be grossly inaccurate and subjective I would still be left with the uncomfortable prospect of government passing legislation in the realm of biological foundations which dictate who and what we are as men and women.

I would no more want government telling my wife how much money she should make because she is pregnant than I would it telling her whether or not she could terminate that pregnancy.