Today's Ledbetter Fair Pay Act and Dr. Farrell's rebuttal

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What do you guys all think of the new fair pay act just passed today?

I heard a guy interviewed who's written on the topic of pay disparity, named Dr. Warren Farrell. Dr. Farrell was even elected to the male organization of N.O.W. and earlier on even in his 20's, even being very much for pushing through equality for women, in hearing about the supposed pay discrimination he asked himself 'Wait...if they're going to pay women 30% less for the same job, wouldn't it be wise to start a company, hire nothing but women, and drive the competition right out?'. The research he was talking about in the interview though indicated that - from what he could see, a lot of the statistics on this have been very deceptive - I had a Business, Society and Government teacher who (she) told us the same thing. The overall logistics seem to be that women have a general tendency, note general, to drift toward jobs that avoid less physical risk or allow for more flexible hours - in the world of labor supply and demand every convenience tends to come at a cost regardless of what your gender is.

Dr. Warren went further and said that there is something that women can specifically do about this - mainly take the jobs that they haven't been taking on as much, but also to understand that the trade off is very definite. When women do choose jobs that fit them better, they're happier - they can make more money taking the cab driving, coal mining, Alaskan crab fishing jobs but they're trading off a job that may pay less but has a far better quality of living.

Now, regarding his rebuttal - I don't fully know what to make of it in the context of the Ledbetter Fair Pay Act. One thought is if we really are dealing with an example in a universe where everything else is truly equal - ie. hours worked, seniority, compensation, etc.; is that strictly the context of this bill? If its any broader than that, odds are it will overarch and cause all kinds of chaos. That and, regardless of all of this, in passing laws like this we'll also need vigorous tort reform to prevent trial lawyers from attempting to extort settlements out of companies over PR when the pay discrepancy is truly an apples-and-oranges scenario; otherwise there's a good chance this bill will actually end up being terrible for women.

Some of the "30%" statistic is based on the assumption that women in some jobs should be paid the same as men in other jobs. That argument is hard to fully accept. It is partly true, as women once worked in the caring professions (teaching, nursing, etc) that were seen as extensions of their unpaid roles as wives/mothers.

It's a little more complicated than that - the myth of a perfect market requires several things that are not always present. For example:

Perfect Information - many work places keep salaries 'confidential' and fire anyone who talks about what they make. Decisions on promotions and pay raises take place behind closed doors. People (including women) don't always know when they are being put on the slow track.

Ease of entry/exit People do change jobs, but they can't always do so with ease. Sometimes they 'have' to take whatever job is there to pay the bills. Sometimes they feel that sticking with a company (to get vested, etc) makes more sense - turnover creates a big penalty for both employee and employer.

Profit - If you can hire someone for significantly less than the market or 'fair' rate, that company would be more profitable (all other things being equal). Which means more investors and access to capital, more expansion, economies of scale, the ability to undercut the competition that pays its workers more, etc.



Or, the companies could be more objective and transparent in how they pay and promote people, while trying to eliminate outright gender based discrimination.