Monday, June 10, 2013

Happy 50th birthday to the Equal Pay Act.

The Equal Pay Act turns 50 today. With certain exceptions the act outlaws employers using sex as a reason to pay employees differently when the jobs held by the members of the opposite sex requires equal skill, effort, and responsibility, and which are performed under similar working conditions. According to this, at the time the act was passed women were only getting paid about 59% of what men got paid. That figure has risen to 77% as of 2011. While progress has been made, a pay gap exists

Over at National Public Radio they have a story that quotes Sabrina Schaeffer for the proposition that "we would be better off without the Equal Pay Act." Ms. Schaeffer, according to the story is the "is executive director of the Independent Women's Forum, a conservative and libertarian women's advocacy group."

I'm not entirely sure who Ms. Schaeffer means by "we." Is she talking about women, all Americans, or the world? I assume she is talking about women. Why does Ms. Schaeffer believe women would be better off without the Equal Pay Act? Ms. Schaeffer tells NPR that rules and regulations make it harder for employers to grant flexible work arrangements because the employer is required to track pay and hours worked.

As an initial matter, a complaint about rules and regulations is a reason to change or get rid of the rules and regulations. It is not a reason to get rid the statute. At least it is not a direct reason. Also, it is not the Equal Pay Act that requires employers to track pay and hours worked. It is the Fair Labor Standards Act. Neither law prevents employers from using flexible work arrangements. Maybe what Ms. Schaeffer means is that time spent tracking pay and hours worked prevent human resources people from figuring out flexible work schedules. Back in the early 90s I managed a restaurant and had to schedule employees to fill out the staffing needs of the week. People requested time off and I generally tried to accommodate them if I got enough notice. This was in the days before computers were everywhere and sometimes it was hard to do but it never occurred to me that I should pay employees less because of the time it took to fill out the schedule. I guess that shows I was not cut out for business. On the other hand, computers can put rovers on Mars and people on the moon,but they can't track when an employee takes a day off?

I suspect that Ms. Schaeffer gave the answer she gave because she thinks that market forces would correct the pay disparity problem that the Equal Pay Act is meant to address. Is there evidence to support this view? The article does not identify any. But, maybe Ms. Schaeffer mentioned some and they did not make the article.

Is there evidence to support the position that government intervention was needed? Well, market forces were at play prior the passage of the Equal Pay Act and women were making 58% of what men made. That suggests a market failure to me. Another example of this sort of market failure is the fact that Jim Crow laws were in place for over 100 years and market forces did not end racial discrimination in public accommodations in the South. That did not end until President Johnson got the 1964 Civil Rights Act passed.

Maybe set aside paying women, is there evidence that employers were more flexible prior to the late 1930s when the Fair Labor Standards Act was passed? It's not like it was a workers' paradise prior to that. Some might remember that the parties in Lochner v. New York (which took place in those days when employers were not forced to track pay and hours worked), were fighting over whether the state could stop an employer from forcing its employees to work more than ten hours a day six days a week. The employer did not want to comply with the law.  Put another way, the employer wanted its employees working more than ten hours a day and six days a week. That does not suggest a desire to engage in innovative scheduling.

What do you think Mr. Torvik? Does Ms. Schaeffer know what she is talking about? Would working women be better off without the Equal Pay Act?

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