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Why Pay Equity Is A Bad Idea

Author: Mark Milke 2001/01/29
Get ready to shell out more money for the public sector under the lofty justification of what sounds like a fair reason - "pay equity." Recent musings from some cabinet ministers are a tip-off that the provincial government will continue to adjust salaries based on social engineering concepts as opposed to what the market and taxpayers can bear.

For starters, it is crucial to understand what pay equity is not. It is not about equal pay for equal work, i.e., the exact same job, irrespective of whether the employee is male or female. Discriminating on the basis of gender for the exact same job has been illegal in Canada for three decades, as is right.
In contrast, pay equity is about equal pay for work of equal value, and that word - "value"- is a nebulous concept, anchored in social engineering, not a proper reading of statistics. (Note: Watch for a cabinet minister to twist my words and argue I'm against equal pay for men and women for the exact same job.)

Pay equity advocates argue that in general, male-dominated professions pay more on average than female-dominated professions, and that the reason is hidden or "systemic:" discrimination. Thus, if truck drivers (mostly male) are paid more on average than clerical workers - a yet mostly female-dominated profession, the reason must be discrimination. Also trotted out is the statistic about the average earnings of men and women, as in women on average earn 73 cents for every dollar men earn. This, it is asserted, is proof of discrimination, either active or hidden.

The problem with such figures is that they do not take into account the fact that women working full-time punch out less hours per week on average than men - 38.7 vs. 43.8 - nor do such comparisons measure work experience, historical trends, or career breaks.

To put it in perspective, if one were to compare the average aggregate earnings of female lawyers with their male counterparts, the wage gap might be even more pronounced. As women have only recently flocked into law school at the same rate as men, a majority of the most senior lawyers, judges, and law professors -where the money is - are male.
Because it takes several decades to reach the top rung of any profession, it will take that long for the per capita wages of women in that profession to equal that of their male counterparts. And that assumes that one day women lawyers will work the same number of hours as men, both annually and over the course of their careers, and that they will be in law firms or in government that bill equally on an per hour basis.
Point being, any decision to stall one's career climb, whether it be to raise children or to backpack around Europe, will affect one's future earnings in relation to those who opt not to make similar choices. That is not discrimination - it is the result of choices.

That is why the most important statistic in the pay equity debate is the one that compares apples with apples - never-married female university graduates working full time with never-married male graduates. In that case, Statistics Canada shows women earn $40,024 while the men lag behind at $39,342.

As it concerns the public service though, Canada's Armed Forces are male-dominated and are underpaid. It is doubtful that pay equity proponents would argue that is proof of discrimination against males. As it is, public sector salaries are a combination of what taxpayers can afford as well as supply and demand.

Public or private, that secretaries earn less than truck drivers or computer consultants is a result of individual choices and the marketplace. And public pay "equity" settlements are nothing more than a transfer of wealth from private sector secretaries to public sector secretaries. Taxpayers should pay public servants comparable to the private sector, not nebulous social engineering "value" comparisons.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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