Plain Speaking About Really Bad “Fair Pay” Bill

About a month ago, I wrote a post on the gender-pay gap for the Recruiting Blogswap, which was published by CollegeRecruiter.com under the title “The Gender-Pay Gap: How Much Progress from Sixty Cents on the Dollar? Is Legal Reform Needed?”

I said I didn’t think legal reform was needed; just enforcement of existing laws.

Now along comes Cait Murphy, a female assistant managing editor at Fortune magazine, making points very similar to mine. I wouldn’t be repeating them here if I didn’t think it would be a major mistake to pass the proposed legislation.

One of the bills I discussed was the Fair Pay Act, which would prohibit wage discrimination for work in “equivalent jobs,” defined in terms of “value” rather than duties. Somehow courts would divine the “value” of functionally dissimilar jobs so as to proclaim them “equivalent.”

According to the National Committee on Pay Equity, very different jobs would be compared. For example, in an elementary school, head secretaries would be found of equal value to audiovisual technicians; in a hospital, registered nursing assistants equal to plumbers; in a retail food chain, cashiers, meat wrappers, and stock clerks all equal.

Murphy says the assumption at the heart of the Fair Pay Act — that discrimination explains all or most of the male-female average pay difference — is “dubious.” She says “the act’s remedies are absurdly misguided, injecting the federal government into the most routine pay decisions.”

She points out that Barak Obama is “the only presidential wannabe of either party” supporting this bill, questioning his judgment in this regard, titling her story: “Obama flunks Econ 101.”

My fave quotes are this one:

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).

And this one:

The labor market is not perfect, which is why there are such things as anti-discrimination laws and safety regulations. But there is nothing so wrong with it that the federal government needs to wade in, classify every single job for every company with more than 25 employees, and then assume the right to micro-manage every decision over pay.

It’s hard to overstate just how radical a policy this is: replacing a well-functioning system that is regarded as a source of U.S. competitive advantage with [a] statist, centralized, bureaucratized mechanism of a kind more familiar to, say, East Germany in the 1980s than to the 21st century American private sector.

The Fair Pay Act is, in short, madness. And it is troubling that Obama has associated himself with this kind of legislation - a position that has the feel of a pander to the feminist left. It is certainly not sound economics.

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