Comparable Worth New Directions for Research (1985) / Chapter Skim
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The Economic Case for Comparable Worth
The Economic Case for Comparable Worth
Pages 71-85
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From page 71... ...
Such changes would be designed to bring wages in predominantly female occupations and wages in predominantly male occupations closer together. These occupational wage changes might be made legislatively or administratively in public employment, might be made through collective bargaining in unionized establishments, or might be ordered by judges as remedies in cases of sex discrimination under title VII of the Civil Rights Act of 1964.
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From page 72... ...
In this case I demonstrate that applying the labels "pay equity" or "comparable worth" to the principles advanced to justify and guide such a realignment does not strain economic sense. The subsequent discussion is designed to deal with some, although far from all, of the difficulties posed by more realistic cases, in which factors other than discrimination come into play.
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From page 73... ...
Hypothetical supply schedules by sex are displayed in Table 2, which shows the numbers of men and women who would offer their labor to employers at venous wage rates. The Case of No Sex Discrimination Let us first assume that employers act on a sex-neutm1 basis and welcome men and women into both occupations.
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From page 74... ...
Since wages in the two occupations can, under these assumptions, be assumed to be the same, except for temporary lapses, it makes sense to compile a "total demand" schedule, which is the total amount of labor that employers would be willing to hire at various wage levels with identical wages in the two occupations. This schedule is displayed in the last two columns of Table 1.
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From page 75... ...
FIGURE 2 Supply and demand in sex-segregated labor markets.
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From page 76... ...
It would no longer tee appropriate to add up the demand schedules or the supply schedules into unified market schedules, because occupational segregation has changed the structure of the labor market so that the market does not operate in a unified way. Instead, there are now separate men's and women's labor markets, each with an independent wage determination process.
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From page 77... ...
Let us now consider how individual firms that have ent~y-level jobs in occupations A and B might react to market wages when, as in the example in the previous section, these wages have been influenced by other employers' segregation of male and female workers . Let us assume as above that all men and women in the labor market from which the company draws its workers are capable of doing all the jobs and, given equal pay, would be indifferent to which job they held.
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From page 78... ...
The supply situation faced by Smith for occupation A would be different from that faced by the discriminating companies by virtue of the fact that Smith considers women as well as men to be acceptable forthose jobs. Smith would have a surplus of candidates forjobs in occupation A, and the principles outlined above should lead Smith to lower the wage it offers in that occupation.
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From page 79... ...
Under the Civil Rights Act, the judge has ordered the company not only to cease barring women from occupation A, but also to realign its wage structure.4 We must now consider whether there is a way to realign wage rates in the Jones Company that does less violence to economic logic than the current setup does. Standard economic theory teaches that efficiency is promoted when commodities substitutable on a one-for-one basis (all male and female workers, in the example)
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From page 80... ...
If Jones Company is typical, about 60 percent of its incumbent workers are men in A-type jobs at $250 and 40 percent are women in B-type jobs at $150. If Jones is allowed or forced to do what the Smith Company has done voluntarily, the Jones male workers will have to take a very sizable pay cut.
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From page 81... ...
As time went on, however, and more of these companies went through the wage realignment process, reduced occupational segregation, and increased their demand for women workers to take jobs in previously male occupations, the wage patterns in the nonrealigned companies might be expected to move toward those in the realigned companies, as the latter came to dominate the market. ABILlTl~S, TASTES, AND SUBSTITUTABILITY Up to this point, the discussion has proceeded under the assumption that workers do not differ in terms of their ability or desire with respect to the two occupations into which I have assumed they are divided.
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From page 82... ...
of the women who today are in the process of taking their first typically female jobs would have the ability and the willingness to take typically male jobs at the entry level, and that employers of workers in such jobs welcomed their entry and were committed to eliminating the harassment of women workers apparently so common in those jobs. If that modest number of women were willing to shift, as their current response to limited opportunities to make such a shift demonstrates is the case, then discrimination rather than women's choices is responsible for much of the wage gap between the sexes.
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From page 83... ...
Even later, a third-order adjustment would occur, with a redefinition ofthe duties and requirements of particular jobs, as employers adjusted to the new wage pattern and rationalized their production processes to take account of it. WAGE REALIGNMENT AND JOB EVALUATION The realignment of wages in actual cases under the rubric of comparable worth would be the administered analogue to the first stage in the process of adjustment to a sex-blind labor market described in the last section.
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From page 84... ...
Thus, the implementation of a job evaluation scheme in a comparable worth study takes the place of the pairing of male and female occupations in the illustrative discussion above. In principle, at any rate, the two procedures are quite similar.
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From page 85... ...
One interesting question on which further research is needed is how close the existing orproposedjob evaluation schemes come in terms of meeting the criterion of usefulness in this context the ability to identify sets of jobs that can draw workers from a common labor supply, which would thus pay similar wages in a nondiscriminatory labor market. A high-quality predictive model of wages in a labor market without discrunination would give validation to the claim that the wage realignments made using it would take account of comparable worth, as economists have traditionally understood worth to be measured, and would further pay equity.
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