Monday, November 23, 1998
No solution? No problem
My last column looked, in a mocking, superficial way, at the theory behind "equal pay for work of equal value," also known as "equal pay for different jobs." But theoretical arguments will only take you so far. It's time to take a mocking, superficial look at the facts.

The case for "pay equity" would seem to depend on two eminently testable hypotheses.

One, that systemic wage discrimination is a problem. And two, that pay equity is the solution.

Let me restate these. The theory holds that systemic discrimination, the tendency of employers to undervalue work traditionally performed by women, has condemned women, as a group, to earn significantly less than men. The problem is so severe, and so widespread, that it cannot be addressed by the usual means of discouraging discrimination or improving opportunities.

Nothing less than a radical reworking of the entire labour market is required -- or rather, a rejection of the market altogether as it applies to wages. For that is what pay equity means. Wages are no longer left to the vagaries of supply and demand. The value of a given hour of labour is not set by the respective valuations of workers and employers.

Rather, all jobs are assessed and ranked on a single, universal scale, according to how they conform to a short list of attributes the state defines as relevant.

Now, even the most devout proponent of pay equity would not pretend the whole of the observed difference in pay between men and women can be put down to systemic discrimination. Whatever else may determine wages, we know they are intimately related to two factors in particular: Education and experience. And we also know men have, on average, more education and more years' work experience than women.

So when Statistics Canada reports that the average woman working full-time earns 73 cents for every dollar a man earns, no one actually believes the whole 27-cent gap is a result of discrimination. Indeed, a good chunk can be lopped off from the start by the simple observation, found in the same StatsCan report, that men working full-time work, on average, 11% more hours than women working full-time. Still, the pay equity proponent must believe discrimination is at least part of the story.

If so, then we ought to find the wage gap persists, not only in the aggregate, but for men and women in similar circumstances. Why, then, do we find that, in fact, single men and single women earn almost exactly the same wages -- a difference of just five cents on the dollar? For single, university-educated men and women, the gap is even narrower.

Indeed, among recent university graduates, StatsCan has found, single women actually earned more than single men.

This isn't just playing with numbers. If systemic discrimination were really behind the wage gap, if women were being herded into lower-paying jobs, jobs that were indeed lower paid precisely because they were filled by women, we should find this reflected in these figures, once differences in education and experience had been accounted for. We don't.

But never mind. Whether or not there is a problem, is pay equity the solution? As it happens, we have a good laboratory in which to test this hypothesis: The province of Ontario. In 1987, Ontario introduced the world's most comprehensive pay equity law, embracing not only the public sector, as in other provinces, but also all private firms with 10 or more employees. Ten years later, we should be able to assess the results.

Specifically, we ought to find that the wage gap has narrowed more rapidly in Ontario than in the rest of Canada.

How intriguing, then, to discover this is not the case. In 1986, the average Ontario woman earned 66% as much as the average Ontario man, the same wage gap as was found, on average, in the other nine provinces. By 1996, the ratio had closed to 73.7% in Ontario, versus 73.0% in the rest of Canada -- though the margin has as often been the other way.

All those bureaucrats, all those consultants, all those tribunals and all that expense trying to calculate whether receptionists should be paid the same as repairmen, and it hasn't made a dime's worth of difference over all. A non-solution to a non-problem: nice work, if you can get it.