Gender pay equity has been back in the news lately, as the Senate passed the Lilly Ledbetter Fair Pay Act, which starts the clock on the statute of limitations on inequitable treatment at the time of the last paycheck. I include the link to original text, because it does turn out that the Wall Street Journal's warnings of a trial-lawyer bonanza are somewhat exaggerated – under the law, someone could recover for back pay for up to two years, instead of twenty or more. But the Paycheck Fairness Act, which supposedly seeks to revive the notion of "comparable worth" and set wage guidelines on abstract notions instead of market demand, does seem to me to be a little more disturbing.
Pay equity is one of the most vexing social issues ever to plague a policy wonk. It's thornier than even healthcare. Everyone agrees they want a level playing field and equal opportunity for all. But knowing whether particular outcomes are fair challenges every other principle that supports a free economy. In the real world, wages are not set by bureaucrats but by a labor market – that is, negotiations between buyer and seller. Research suggests that the wage gap may not be due to sinister employers trying to keep women down, but rather the fact that men are more aggressive than women when it comes to negotiating pay. The U.S. General Accounting Office research demonstrates that the majority of pay discrepancies between men and women are due to what they cautiously refer to as "work patterns" – namely, women are more likely than men to place their family obligations ahead of their career ambitions, which inevitably leads them to make decisions that diminish their earnings. As a general rule, the people who care more about money get more of it . . . and those who care about other things, get less. That might be frustrating, but is it unfair?
Ok, time out for mandatory PC disclaimers. Yes, bona fide cases of unfair gender discrimination in pay exist. Yes, women should have legal protections against such abuses. I do think, however, it is flat-out wrong to assume that differences in pay are automatically a moral offense. A difference in outcome does not necessarily mean a difference in opportunity.
This kind of issue brings out my inner reactionary. Employers will pay the least they can get away with, and employees will demand the most they can get, and between the two, wages are decided. If it so happens that a huge percentage of the companies in the world are paying women less than they are worth, that only creates an awesome opportunity for enterprising companies to step in, pay up, and get all the best employees.
And remember, as we keep being reminded, most jobs come from small businesses and a lot of small businesses are female-owned.