A few months ago, Mr. Justice O’Leary of the Ontario Court (General Division) ruled that the Ontario government’s repeal of part of the Pay Equity Act was unconstitutional, because it discriminated against one group of disadvantaged workers vis-a-vis other groups. However, the court made it clear that it was not saying pay equity itself was required by the constitution:
"[T]he government of Ontario was under no obligation to enact the Pay Equity Act, 1987. It could likewise have repealed the entire Pay Equity Act in 1996 without giving rise to any claims of discrimination."
Premier Harris, it’s time to take up the court’s challenge. Repeal the whole nonsensical mess.
Advocates of pay equity seem to have been living on a
different planet from the rest of us—one where the discipline of economics
never established a foothold. They believe that wages in the
workplace should be fixed by comparing the work done in "female jobs" against
the work done in "male jobs". Four factors are to be taken into account
in making the comparison: skill, effort, responsibility and working
conditions. If a female job scores as highly on these factors as a male
job but is lower-paid, its wage rate must be raised to the level of the
Those of us who grew up on planet Earth, where economics has long been a subject of study, know that scholars figured out several centuries ago that the factors determining the value of a service or commodity are simply supply and demand.
Economist Adam Smith, in a series of lectures given in Edinburgh around 1750 (ironically, for the specific purpose of educating lawyers ) explained why water, an extremely useful commodity necessary to all human life, was cheaper than diamonds, a commodity that most of us can get along without.
"It is only on account of the plenty of water that it is so cheap as to be got for the lifting, and on account of the scarcity of diamonds…that they are so dear."
Why is traditional women’s work—child care, homemaking, nursing home aide, clerical worker—so poorly paid? Because there are zillions of people able and willing to take on those tasks. Why are brain surgeons so well paid? Because there are very few people able and willing to perform brain surgery.
But why do women keep choosing to work in traditional occupations, knowing how "undervalued" they are? There must be something about these jobs that attracts them. Maybe they find the work enjoyable. Maybe they consider it easy. Maybe they like the fact that these jobs don’t require years of training. Maybe it’s the fact that the job never changes much, so if they stop working for a few years to raise their own kids, they’ll always be able to pick up where they left off. Maybe it’s because they can do their work from 9 to 5, then leave it behind at the workplace and not wake up in the middle of the night worrying about it.
Undoubtedly, some analysis of this kind goes through the mind of every woman who decides to take a traditional "woman’s" job instead of studying brain surgery. Guess what? Every one of these considerations fits neatly into one or another of the four categories: skill, effort, responsibility and working conditions.
In other words, the factors that the "pay police" want to apply to evaluate a job have already been applied in the decision-making processes of the people who have chosen to take that work. The number of people on the market for a particular job represents the sum total of the valuations reached by myriad individuals all independently evaluating the factors of skill, effort, responsibility and working conditions of that specific job.
Every individual’s valuation will be different due to that person’s unique combination of circumstances and personality. There is no justification for substituting the valuation of a pay equity bureaucrat for the valuations of the many people who actually comprise the marketplace for a particular job. The bureaucrat’s preferences may be the correct ranking of relative job values for the bureaucrat, but not for everyone else.
Imagine what the world would be like if we applied pay equity reasoning to other transactions. Suppose you needed a basement dug for your new house. The owner of a front-end loader would quote on the job. With respect to skill and responsibility, he would promise not to sever any power or water lines and not to dig on your neighbour’s lot. He’d do the job in one day, sitting in his air-conditioned loader cab. Another applicant, owning nothing but a hand shovel, would assume the same responsibilities about utility lines and neighbours. He’d do the job in a year, working through snowstorms or blazing sun, risking physical injury, and burning calories like crazy. If pay equity reasoning applied, the second man should get paid hundreds of times more for the same job, due to all his extra effort and the terrible working conditions.
Ridiculous? Of course. But then, so is the
Pay Equity Act. It’s time we consigned it to the scrap-heap of legislative
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