The So-Called “Fair Pay Act” — Fair for America?

25 May

The so-called Fair Pay Act, in front of the Congress now, focuses on the alleged huge difference in pay rates between women and men in the same jobs, and differences in pay rates between different jobs that seem (to somebody) to require the same types of skills (new phraseology is “equivalent jobs”).

 So I guess the new government gimmick to try to resolve what is a much smaller issue than claimed is the definition of “equivalent jobs”.  More social engineering on the part of our highly effective and efficient government.

 What do I mean by “smaller issue than claimed”?  The media screamers love to flout the statistic that pay for women lags pay for men doing the same job by 22%.  Terrible, right?  EXCEPT that, even the proponents of this Act admit (in more hushed tones) that 65-75% of this difference is accounted for by factors like education levels and experience.  So the REAL pay gap is “only” roughly 5.5–7.5%.  Still important to get at, reduce, and possibly eliminate, but not the media headline many want to make.

 Here is the explanation of the Fair Pay Act, and the need for it, given by the National Committee on Pay Equity (NCPE), a coalition of all kinds of groups striving for women’s rights:

“The Equal Pay Act [1963] essentially covers ‘equal pay for equal work’ and applies only to sex-based discrimination. The Fair Pay Act [2012] expands these protections in two ways: First, it prohibits pay discrimination on the basis of race and national origin, as well as sex; Second, it prohibits such discrimination among workers performing dissimilar work in equivalent jobs. The Equal Pay Act [1963] prohibits only sex discrimination between workers performing substantially the same jobs.”  [Bolding is mine.]

Now, I have two major problems with this Act.

1.   We are going to create a monster when we try to define and administer the concept of “equivalent jobs”.  Who is going to do this?  What guidelines are they going to use?  What sort of stupidly-designed bureaucratic processes are going to have to be enacted within corporations and government to establish, maintain, and report on “equivalent jobs”?  Will we not need a whole new government office to define “equivalent jobs”, to compare them across companies, to handle challenges, disputes, and lawsuits filed by employees who think their job is “equivalent” to that of someone receiving higher pay in a different job?

2.   The enactment of this Law completely removes the role of supply and demand in setting pay scales between jobs.  THIS IS HUGE!  Another chink in the foundation of what makes our great economy work.  If I have a great supply of applicants for an Administrative Assistant job, and only a few applicants for an “equivalent” Purchasing job, why shouldn’t I be able to pay less for a qualified Admin than for a qualified Purchase Order Clerk?

Our government will pander to this demand for “equivalent jobs” consideration, and this Act will probably get passed.  But the unintended negative consequences of this are going to be substantial.  This is a deep, and potentially very damaging, intrusion by government into the workings of the American labor force.

Your thoughts?

Advertisements

Please reply here -- I value your thoughts

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 )

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s

%d bloggers like this: