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7.13.00 7.07.00 7.03.00 6.29.00 6.26.00 6.13.00 6.05.00 6.05.00
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7/13/00
10:05 a.m. By Diana Furchtgott-Roth, resident fellow at the American Enterprise Institute |
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The article is so riddled with errors that attempting corrections is like slapping at mosquitoes on a summer camping trip: It's impossible to hit them all. Closest to home, but least important, Ms. Barko claims that I represented business at a National Committee for Pay Equity forum last October, in which I suggested that comparable worth would cause labor shortages. I am a resident fellow at the American Enterprise Institute, and I do not and have not represented any business organizations during my seven-year tenure. Ms. Barko cites the "new" AFL-CIO and the Institute for Women's Policy Research (IWPR) report. She is referring to the February 1999 report, "Equal Pay for Working Families: National and State Data on the Pay Gap and Its Costs." This report again propounded the fiction, repeated by Ms. Barko, that discrimination is responsible for the average wage gap between men and women of 74 cents on the dollar. The 74 cent figure is derived by comparing the average median wage of all full-time working men and women. So older workers are compared to younger, social workers to parole officers, and, since full-time means any number of hours above 35 a week (and sometimes fewer), those working 60-hour weeks are compared with those working 35-hour weeks. To obtain figures for individual states, average wages of men and women within that state are compared in the same way. For example, in Louisiana, women's earnings are supposedly 67 percent of men's, whereas in the District of Columbia women earn 97 percent of men's wages. But these estimates fail to consider key factors in determining wages, including education, age, part- or full-time status, experience, number of children, and, a related variable, consecutive years in the workforce. That is why in states such as Louisiana, where it is less common for women to work, and where they have less education and work experience, the wage gap is wider. In areas where it is more usual for women to work, such as the District of Columbia, the gap is smaller. But this average wage gap, as it is known, says nothing about whether individuals with the same qualifications who are in the same jobs are discriminated against. The AFL-CIO/IWPR study calculated the cost of alleged "pay inequity" caused by the predominance of women and men in different occupational categories and concluded that "America's working families lose a staggering $200 billion annually to the wage gap," or, as Ms. Barko repeats, $3,446 per woman per year. But this number leaves out two major factors the type of job, and the field of education. It is meaningless to say that the earnings of a man or a woman with a B.A. in English should be the same as the earnings of a man or a woman with a B.A. in math. So the study compares workers without regard to education or type of work: Secretaries are being compared with loggers, bookkeepers with oil drillers. Such numbers do not present an accurate estimate of wage gaps, and illustrate the difficulties of implementing the comparable worth proposals suggested by legislators. How much less do equally-qualified women make? Surprisingly, given all the misused statistics to the contrary, they make about the same. Economists have long known that the adjusted wage gap between men and women the difference in wages adjusted for occupation, age, experience, education, and time in the workforce is far smaller than the average wage gap. Many economists, such as Columbia's Jane Waldfogel, Baruch College's June O'Neill, the University of Michigan's Charles Brown, and the New York Federal Reserve's Erica Groshen, find the difference to be only pennies on the dollar. I've said it elsewhere, but, at the risk of getting fired like Jeff Jacoby, I'll say it again: No academic study says that equally qualified women make only 74 cents on a man's dollar. Since average wage gaps occur naturally in labor markets for reasons described above, the only way to get rid of such gaps is to require not equal pay for equal work, but equal pay for different jobs. Comparable worth, as it is known, aims to end differences in pay across male-and female-dominated occupations by telling employers what they are allowed to pay workers in different occupations. Senator Daschle's Paycheck Fairness Act would have the Secretary of Labor draft "voluntary" wage guidelines for businesses and voluntary guidelines sometimes have a way of becoming mandatory. Senator Harkin's Fair Pay Act would require all companies to have their own wage-guideline systems, enforced by the Equal Employment Opportunity Commission, to make sure that "equivalent jobs" of men and women were paid the same. This is Soviet-style planning caused Communist countries to rust and fade away while the West grew strong and prosperous. Ms. Barko describes the case of Milt Tedrow, a former nurse who decried the societal values that allowed him to earn more after switching to carpentry. It's probably worse that Britney Spears earns more than both of them put together, but that's how our society works. There is nothing to stop women from applying for carpentry jobs or from trying to sing like Ms. Spears. But not all women who sing Ms. Spears's songs can be expected to earn her salary, because, even though the output may be equivalent, the amount that others are willing to pay is not. Comparable-worth systems are wreaking havoc in Canada, which has had some forms of comparable worth since the Canadian Human Rights Act was passed in the mid 1970s. In 1999 courts ruled that the government has to pay billions in back pay to underpaid federal workers to settle "pay equity" suits. The 230,000 mostly female federal employees are due to receive $30,000 (Canadian) each, at a cost of about $3.6 billion, or $200 per Canadian taxpayer. Other Canadian employee groups are now preparing their own pay-equity suits. It's well known that artificially raising wages lowers numbers of workers hired. Even Heidi Hartmann, director of the IWPR, testified at a Senate hearing this June that comparable worth has reduced job growth: "In Minnesota for example, employment grew by 4.8 percent but would have grown by 5.1 percent in the absence of pay equity implementation. Iowa and Washington, where pay adjustments were more expensive, did show some negative employment growth." Millions of women try to enter the U.S. every year: Many die trying to do so, seeking the freedom to make their living in a land without economic restrictions such as comparable worth. In contrast, no one is dying trying to reach Communist Cuba. Our nation has the lowest unemployment rate and the highest growth rate of any industrialized country, and all women, whether working in paid jobs or working at home with children, benefit from a strong economy and job market. Let's keep it that way, rather than following other countries down the failed path of socialism. |
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