Equal Pay

The latest Washington kerfluffle is the argument over the relationship between mens and woman’s pay. The progressive side is arguing that a large difference still exists while conservatives are employing a “global warming” approach (the data is still in dispute).

Fortunately the question is not before the Supreme Court. Their judgement was completely discredited when the ruled that Lilly Leadbetter did not have an otherwise slam dunk case on the grounds her suit was not filed within the six months allowed. It just depended upon which six months one considered, from her first paycheck or from her last. Her former employer had been under paying her the entire time.

Pay discrimination is an issue we must be careful with. Clearly there should be equal pay for equal work. It is less clear whether everyone does the same amount of work in the same job description.

Consider two food service employees (like a waiter and waitress). One of them is super efficient and meets every need of their customer’s. In a setting where the wait staff are paid the same amount, the waiter and the waitress would earn the same pay from the employer. In total, however, one (for argument sake, the waiter) earned more from tips and so in total earned more. This is how the real world works.

So now consider an employer who decides to pool all tips and share them equally amongst both the kitchen and the wait staff. The employer recognizes the better performance of the waiter (it could be just as easily the other way around) and provides a “bonus” to the waiter who would have earned more in tips. The “bonus” would in fact be aimed at retaining this high performing waiter.

Paying for performance is as American as apple pie.

The hidden problem is how do we judge superior performance? A second hidden problem is how do we separate our judgement from our prejudices?

To the extent that it is difficult to judge performance, it should be no surprise that historically men have in general been paid more than women. So what should we do about this? Litigation is probably not the answer. But sunlight is another option.

Companies could post once a year their pay rolls for everyone to see. Alternatively, companies could be neutral on whether their employees discussed their pay with other employees. In either case one should expect that employees will have a lot of questions if their pay was less than a peers.

Disclosure has other advantages. It could motivate. An employee might say, “wow, if I worked in Department B and work overtime, I could earn a lot more than I make now.”

Disclosure might also lead to a company’s HR department having to answer tough questions when the facts do indicate a disparity between sex. HR should be ready for the question why do the men in engineering make so much more than the women in shipping. Assuming the company has no overt policy about hiring only men in engineering, HR could show national averages for engineering positions and regional averages for shipping positions. There should be nothing to be ashamed about unless there were gender differences in engineering or in shipping.

It is somewhat laughable that Congress has inherited this hot potato. While equal pay for equal work would seem a subject Congress would seek to enforce, today’s Congress seems far more interested in themselves and not the slightest bit interested in drafting sound social policy.

Maybe the GOP is correct that this issue is coming out now because there are mid-term elections ahead. The electorate, however, will judge whether the GOP is interested in equal pay or favors only what business owners think proper. Hmmm.

We shall see.

Explore posts in the same categories: Barack Obama, Democratic Party, Politics, Republican Party

Tags: , ,

You can comment below, or link to this permanent URL from your own site.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: