It’s a small, but important step toward a less flexible work environment. As The Hill reported yesterday, the Equal Employment Opportunity Commission is promulgating regulations to require federal contractors to provide data on employee compensation broken down by sex, race, job categories, and other categories. The purported purpose is to encourage transparency and root out wage discrimination, but its effect will be to make all companies more conscious of how their compensation data — even if entirely legal and justified based on employees’ merits and duties — will be viewed through a politically correct lens, and one with the power of the state behind it.
One would think after reports of the yawning wage gap at the White House and in prominent Democratic congressional offices, the Left would be aware that statistical wage gaps aren’t necessarily evidence of discrimination. The EEOC does ask companies to provide the number of hours worked and other relevant factors in addition to demographic data, which can be useful in explaining wage differences (for example, even women considered full-time workers spend less time each day in the office than full-time men, which contributes to differences in pay). But many of these factors that impact pay are hard to capture for a government report: differences in educational backgrounds and areas of expertise, specific job responsibilities, including the level of travel, willingness to engage in overtime work, to name but a few (see more about the main causes of the wage gap here).
Under these new rules, companies that have business with the federal government (or hope to) will have reason to make their compensation practices more standardized. Yes, this may mean that they try to boost women’s and other protected groups’ wages to try to reduce statistical gaps that might give bureaucrats an opening for investigation. But it also encourages companies to move toward more rigid pay structures which provide less flexibility for workers and managers. Why offer a valued female employee a reduced work-schedule or less rigorous job duties (such as less travel or flexible hours) in return for lower take-home pay, even if that’s what she prefers, if that opens the company to accusations of discriminating against women? After all, such a tradeoff is tough to explain in a report for the Department of Labor, so better to require all workers to work the same hours for the same pay.
Less flexibility and more red tape for American employers — which will be the outcome of these new rules — aren’t good news for employees, regardless of one’s gender or other demographic characteristics.