- The Washington Times - Thursday, July 13, 2000

Last month, the Senate Labor Committee held a hearing to examine whether businesses deliberately discriminate

against women by paying them lower wages than men. According to left-leaning groups such as the National Organization for Women, such discrimination exists and can only be rectified by "comparable worth," a policy that would let government bureaucrats determine the "fair" wage for each job.

A closer examination of the issue, however, reveals that the entire premise behind comparable worth is absurd. In effect, feminists are arguing that businesses are deliberately willing to sacrifice profits by overpaying male workers when they could hire equally qualified female workers for less money.

Moreover, this grand conspiracy to forfeit potential earnings must extend to Wall Street as well. After all, this pro-male cartel can only be perpetuated if investors deliberately forgo the chance to create new businesses that would hire undervalued (and therefore highly profitable) female workers.

In the real world, feverish speculation and conspiracy theories like this are laughed off. Unfortunately, D.C. is not the real world, and poll-driven politicians are quite capable of enacting foolish policies regardless of the underlying merits. Indeed, there is every reason to fear comparable worth legislation could be enacted next year depending on the outcome of this fall's elections.

Allowing a bunch of paper-pushers to set the price of labor, however, would be a catastrophic mistake. It is no exaggeration to state that market-based prices are the backbone of a free market economy. In short, prices perform a critical role in the economy, signaling to savers, investors, workers and consumers how to most efficiently produce and consume.

Wishful thinking to the contrary, there is no way to replace this market mechanism with a bunch of political edicts. Even well-intentioned bureaucrats are incapable of directing resources to where they are most needed without a functioning price system. One need only review the tragic performance of the old Soviet Bloc to see what happens when the comparable worth theory was applied to national economies.

To make things worse, it goes without saying that politicians would intervene, pressuring the bureaucracy to "determine" that certain jobs receive a higher rating. Lobbyists would grow rich trying to cut favorable deals for certain types of workers. Labor-management relations, meanwhile, would deteriorate as both sides realized that cooperation was not nearly as important as arm-twisting in Washington.

Supporters of comparable worth inevitably refuse to debate these issues, preferring instead to repeat the mantra that women only earn about 75 percent of what men earn. The knee-jerk assumption that this is proof of discrimination, however, completely ignores important differences in occupation, experience, number of hours worked, and labor force commitment.

In an excellent new book, "The Hillary Trap," Laura Ingraham explains: "Men take time-outs from employment for less than 2 percent of their working lives, compared to 15 percent for the average working woman… . If you suspend and restart your career a lot, you're just not going to have the same pay vector, whether you're a man or a woman. Even full-time women workers typically put in eight to 10 hours a week less than men do."

More generally, when researchers compare men and women with identical characteristics, differences in wage levels almost vanish which is exactly what one would expect in a market economy. Why? Because discrimination is costly. Any boss that deliberately refuses to hire the best workers at the lowest price will be at a competitive disadvantage. Consumers, after all, do not want to pay higher prices in order to subsidize discrimination.

There is another aspect of the comparable worth debate that does not involve numbers or profits, but is equally important. More specifically, the entire notion of comparable worth is profoundly demeaning to women. It implicitly assumes that women are incapable victims that require coddling and protection from a paternalistic government. Indeed, Miss Ingraham argues in her book that this notion that women are inferior is a fundamental tenet of modern feminism.

Comparable worth thus combines all the worst features of bad public policy. It is based on faulty data. It would wreak havoc with the economy. And it would undermine, both materially and psychologically, the very people it is supposed to help. No wonder so many politicians like the idea.

Daniel J. Mitchell is the McKenna senior fellow in political economy at the Heritage Foundation.



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