'Comparable worth' theory for granting equal pay has its flaws
Women in the labor force in the United States, on average, earn only two-thirds as much as men. A widely held belief is that much of the difference results from discrimination. In Partial response, Title VII of the Civil Rights Act of 1964 requires employers to pay equal wages to men and women in the same jobs. That law ended the practice of maintaining lower wage scales for women working in the same jobs as men.
After two decades, the impact of this change in federal law has been disappointing. The overall wage differences between men and women have changed little. In 1982, women working full-time earned an average of 62 percent of the wages earned by men.
The latest response to this continued difference in earnings is the doctrine of ''equal pay for comparable work,'' which has recently emerged in the courts and regulatory commissions. The doctrine rests on the observation that certain occupations are filled predominantly by women and others mainly by men.
For example, lawyers, physicians, and the building trades have been traditional male occupations, while women have typically obtained jobs as schoolteachers, nurses, and secretaries. Moreover, on average, the male-dominated occupations pay more than the female-dominated jobs. For example, the average plumber makes $21,944 a year, while the typical secretary earns $12, 636 yearly.
Advocates of ''equal pay for comparable work'' believe wage differences between male- and female-dominated occupations reflJct mainly bias against women. dingly, they propose reinterpreting Title VII to prohibit a lower rate of pay for employees of one race or sex for jobs which require an equivalent amount of skill, effort, and responsibility. But as with so many attractive-sounding approaches, this one has serious problems.
The supporters of ''comparable worth'' forget that relative wages result from the interplay of many forces, from the demand side as well as the supply side. Even in the absence of prejudice and when performed under conditions of equal skill, effort, and responsibility, the real market value of dissimilar work differs markedly, even among occupations dominated by white males.
Also, average salaries in the highest-paid female-dominated occupation (registered nurses) tend to be greater than many male-dominated occupations (such as surveyors) and more than twice some of the lowly paid female-dominated occupations (seamstresses and stitchers). Clearly, many factors are involved in the determination of pay scales.
Moreover, wage differences are not inherently bad. They play a vital role in the economy. They guide labor into those occupations and locations where it is in short supply, and discourage people from entering those in which an excessive supply is already available. Wage differentials produced by market conditions attract young people into careers where they are needed.
Interestingly, artificially forcing wage increases in occupations now filled mainly by women ultimately will reduce the demand for these jobs. The adverse impacts of increases in the statutory minimum wage support that conclusion.
We need go no further than the public schools to see the results that flow from following the comparable-worth approach. Historically, teachers are paid on the basis of years of service and level of education, ignoring market forces that affect different specialties. The sad outcome can be predicted by any student of Economics 1: chronic shortages of math and science instructors and continuing surpluses of gym teachers.
Recommendations that science and math positions be paid at above-average rates are met with howls of outrage: ''Aren't gym teachers and social studies instructors as worthy as math and science teachers?'' ''Why should they be paid any less?'' Standard, across-the-board pay increases may seem to make the administrator's job easier. That approach also sounds fair. But ignoring supply and demand conditions in labor markets inevitably produces shortages in some occupations and surpluses in others.
In the face of this type of experience, the attempted imposition by the courts and regulatory agencies of an equal-pay-for-comparable-worth doctrine will be extremely costly and disruptive. In late 1983, a district court in Washington State made such a determination in the case of the state government's employees. The costs to the Washington taxpayers are estimated at $70 million for an initial two-year period and ultimately as much as $800 million to $1 billion. Major reductions in government services are anticipated in that state in order to meet the added expense, unless the ruling is reversed by a higher court.
Aside from the perverse effects of this notion on labor markets, serious operational difficulties would arise in shifting to a comparable-worth personnel system. Who will make the necessary determinations and on what basis? The proponents lean heavily on statistical evaluation systems to determine - literally by the numbers - which positions require comparable skill, effort, responsibility, and working conditions.
Descriptions of comparable-worth systems remind me of the Middle Ages, when the priesthood sat in judgment on economic matters, depending on theological concepts to determine what they called ''just price.'' Activists today attempt to play a similar role, forgetful of the costly impacts of imposing dogma on a modern market economy.
The comparable-worth approach implies that the government will assume the role of personnel officer. Ultimately, the focus in the workplace would shift from increasing output to enhancing the formal inputs (credentials) that would come to dominate wage and salary decisions. The basic idea that work is performed to produce goods and services needed by consumers might just fall by the wayside.
Murray L. Weidenbaum served as the first chairman of President Reagan's Council of Economic Advisers. He is now director of the Center for the Study of American Business at Washington University in St. Louis.