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The $5 Billion Mugging: Pay Equity and Taxpayers

October 24, 1999
The $5 Billion Mugging: Pay Equity and Taxpayers
Canada's taxpayers are now closer than ever to being accosted for a $5 billion shakedown from federal civil servants. The latest battle in the pay equity war between the federal government and its largest union (the Public Service Alliance of Canada) occurred recently when the Federal Court of Canada dismissed the government's attempt to argue that, yes - federal civil servants had been historically underpaid, but just not quite as underpaid as their union claimed. As is usual in wars between Ottawa and powerful federal unions, the first casualties are always taxpayers.

Unless the federal government appeals this case - which it should - taxpayers will soon face a bill that results from a conspiratorial view of discrimination, rotten logic, and a federal government that - if it were a lawyer - couldn't get a conviction in a murder case if the crime happened while witnesses videotaped it and took notes.

It's understandable that pay equity gets some public sympathy (though less as more Canadians understand the concept) because it appeals to our basic sense of fairness. After all, who would oppose equality?

Problem is, pay equity is not about equality, i.e., paying men and women the same wage for the exact same job. Pay equity is about the far more nebulous concept of equal pay for work of equal ‘value'. (And it is the word ‘value' that causes the current fights between governments and civil servants that figure they're owed the cash equivalent of a new Land Rover.)

Pay equity advocates assume that where the average wage in a female-dominated profession, say clerical work, is lower than the average wage in a mainly male occupation, say trucking, hidden discrimination against women is the reason.

But that assumption ignores supply and demand, hours worked, and a multitude of personal lifestyle choices that influence why some professions pay various salaries. That women are dominant in the field of clerical work, and that that field pays less on average than trucking where males dominate, is not in itself proof of discrimination - hidden or otherwise. Just because the rooster crows and the sun rises, does not mean the first event caused the second.

Fact is, where apple-to-apple comparisons are available, the wage gap between men and women disappears. StatsCan data shows that university-educated single women earned $40,787 in 1996, almost $600 more on average that university-educated single men who received $40,182. (Unlike married men to married women comparisons, where on average, more women than men take time out of the workforce to raise children, thus affecting their career experience and future average earnings vis-à-vis men, the above statistic compares apple to apple choices and qualifications: singleness and a university degree.)

But Ottawa, by writing in a vaguely-worded commitment to "pay equity" in 1978 human rights legislation, invited human rights tribunals and courts to interpret it in as generous a manner that a clever lawyer could argue for. Now Ottawa worries that the taxpayer treasure chest the federal government opened up 21 years ago might be more abused by federal unions than originally expected - yet it still wants to argue for the bogus pay equity concept as legitimate.

Add to that high-risk "strategy," the fact that the government has poorly argued this case before both the Canadian Human Rights Tribunal last year and Federal Court this year, and one has to wonder if they're trying to blow this case on purpose.

Still, the government should appeal this ruling. Taxpayers are owed that. Then, the law should be changed to reflect exact job to exact job comparisons only, not easily abused, conspiratorial, and imprecise notions of "value." That would prevent future fights, since the core problem is the concept of pay equity itself. Everything else is a question of how many angels dance on the head of a pin.
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