Economics for Today 9th Edition by Irvin Tucker

Exercise 29

IS PAY FOR FEMALES FAIR?
Applicable Concept: comparable worth
Women working full-time earn on average about 20 percent less than men. Discrimination in wages and employment on the basis of sex was made illegal in 1963 by the Equal Pay Act (EPA), which outlawed pay discrimination between men and women doing substantially the same job. This does not mean that unequal pay for the same work cannot exist, but if it does, the differential must be due to factors other than gender.
Proponents of comparable worth argue that the equal-pay-for-equal-work idea has failed. They maintain that women crowd into such female-dominated occupations as secretarial work, nursing, school teaching, and social work because of discrimination against women in male-dominated occupations such as engineering. The increased supply of female labor in female-crowded professions lowers the prevailing wage. If the courts follow the comparable worth principle, they will not consider whether employers intentionally pay less for "women's jobs," but only whether the employers are in compliance with a quantitative rating scheme. The best-known case occurred in the 1980s, when the American Federation of State, County, and Municipal Employees won the first federal court case against the state of Washington. The state was found guilty of wage discrimination against women because it had not followed a comparable worth point system. According to the point system, male dominated jobs often paid more than female-dominated jobs even though the female jobs had greater "worth" and therefore "underpaid" female job classes should be raised rather than lowering the "overpaid" male job classes. The court ordered Washington to upgrade nearly 15,000 female employees and award back pay estimated at $377 million. The decision was appealed to higher courts, and the union ultimately lost the case.
Critics of comparable worth argue that it is nearly impossible to measure all of the factors that determine compensation for jobs, and the fact that female occupations earn less than male occupations is not necessarily evidence of discrimination. For example, women often seek occupations more compatible with childrearing. Over the years, it appeared that comparable worth had faded into a golden oldie until the Fair Pay Act of 2007 was introduced by Senator Tom Harkin (D-Iowa) and included then-Senator Barack Obama (D-Illinois) as one of the cosponsors. The premise is that the government has the duty to decide a job's worth. Under its provisions, employers must send the Equal Employment Opportunity Commission (EEOC) annual reports of how pay is determined in any jobs dominated by one gender. The goal is for the EEOC to decide pay for workers in dissimilar but "equivalent" jobs based on criteria established by the EEOC. Such calculations would serve as a basis for workers to sue their employers based on not being paid the same for "equivalent" work. Although this bill was not enacted, the Lilly Ledbetter Fair Pay Act of 2009 was passed to reset the statute of limitation for pay discrimination.
Finally, the National Equal Pay Task Force was created in 2010 to crack down on violations of equal pay laws. In addition to the Labor Department, members include the Equal Employment Opportunity Commission, the Department of Justice, and the Office of Personnel Management. In 2012, the Paycheck Fairness Act failed in the Senate that would require employers to prove that pay differences between men and women are based on qualifications, education, and other "bona fides." And in 2013, a National Partnership For Women And Families study reported that a gender-based wage gap exists in every state and in the country's 50 largest metropolitan areas. Finally, a 2015 article in International New York Times examined female discrimination in Hollywood. The conclusion was that women in film are routinely denied jobs, credits, prizes, and equal pay.
Suppose the EEOC uses a job-scoring system and determines that the wage rate for a secretary is $50 per hour, while the competitive labor market wage rate is $10 per hour. What would be the effect of such a comparable worth law?