Many Americans are taking a welcome break this summer from the relentless tug-of-war in our political debates. But that’s not so in the Massachusetts State House where officials are rehashing one of the most well-worn issues in modern politics: the so-called wage gap between male and female workers.
The Department of Labor (DOL) statistic underlying the “wage gap” claim simply compares a full-time working man’s median wages with those of a full-time working woman. The DOL says that women on average are paid only 78 cents for every dollar a man earns.
Despite laws prohibiting sex-based wage discrimination (the Equal Pay Act of 1963 and the Civil Rights Act of 1964), activists often rely on the grossly misleading wage gap statistic to perpetuate the myth that all women are victims of pay discrimination and to demand greater government control of the workplace.
Last week, the Massachusetts Joint Committee on Labor and Workforce Development considered a bill that sponsor claims will shrink this wage gap and help women to earn more. Yet the bill’s provisions—however well intentioned—are unlikely to do much to change the statistical difference between men and women’s earnings. That is because it’s the choices men and women make about how much to work and what jobs to take, not discrimination or mistreatment from employers, that are the main cause of the wage gap.
Significantly, women on average gravitate to industries that, although less lucrative, possess other desirable characteristics, such as regular hours or pleasant work conditions. In contrast, men often take on jobs with big drawbacks—they drive trucks overnight; take on physically grueling, even dangerous, work; and spend their time in unpleasant surroundings such as prisons and sewers—because those jobs allow them to earn more money.
Women who are married with children have, on average, longer gaps in employment than their male counterparts. In addition, many women with children prefer to work only part-time, so that they can spend more time at home. Even those women who work full-time, tend to spend less hours on the job on average than men.
For these reasons, wage gaps exist in every developed country of the world. And they exist even in the most committed, liberal workplaces, including Barack Obama’s White House and in Hillary Clinton’s own former Senate office. That’s not because these liberals are virulent sexists, but because women and men tend to make different choices when it comes to their work lives.
In fact, study after study shows that when economists control for factors such as experience and personal choice the wage gap shrinks, leaving just a few percentage points unexplained.
Of course, even the small, unexplained wage gap that remains after controlling for these factors is concerning. And although workplace discrimination against women is already illegal, it makes sense to consider if other public policies can help ensure that women’s work is being properly valued.
Some provisions in the Massachusetts’ bill may assist some workers in their negotiations, such as requiring employers to list minimum salaries for open positions, providing additional protections so that workers can discuss their pay with colleagues, and preventing businesses from inquiring about previous salary history.
But even these measures have drawbacks. Workers with less experience who are willing to except less pay will no longer have a competitive advantage and will therefore be less likely to be considered for jobs with higher minimum salary requirements. While those who are hired will earn more, people with less experience and fewer skills will have a tougher time finding work and getting the experience they need to move up the economic ladder.
More fundamentally, this legislation is another step toward greater government micromanagement of compensation practices that will create a less dynamic, less flexible workplace. This legislation specifies the many criteria that businesses must consider if they want to be able to prove to future judges that they are not guilty of discrimination. They have to make sure that they have clearly specified pay and evaluation practices and carefully monitor how the salaries of employees of one sex stack up against the other.
Human resource managers will look at these guidelines, consult the company lawyers, and likely change company policies to reduce the amount of discretion managers have in compensating employees. That’s bad news for women (or men) who don’t want a one-size-fits-all pay package and would prefer to negotiate a reduced or flexible work schedule for reduced pay. Managers may not be so amenable to outside-of-the-box thinking when they have to worry how those decisions might appear during a future lawsuit. It also bad news for companies that recognize that part of employee retention involves the ability to reward performance or to make a significant counter-offer when a valuable employee considers leaving.
Government intervention and strict bureaucratic definitions of fairness may sound nice and straight-forward during a committee hearing, but the result is often red tape that ends up a tangled mess when applied to the real world.
We all want women to be treated fairly by their employers. And the good news is that women are an extremely important part of the workforce – and businesses recognize that. It’s important for there to be clear laws on the books to prevent discrimination, but ultimately a growing job market that gives workers better employment options is the best way to ensure that all workers, women and men alike, earn more.
Carrie Lukas is the managing director of the Independent Women’s Forum.
Courtesy of Creative Commons 
