CUPE aims to expand the junk science of comparing wages
The front page of Tuesday’s National Post brought rare and heartening news of a defeat in Ontario Superior Court for what, in a perversion of language, is widely called “pay equity.” George Orwell instructed us on the power of language in politics. “Pay equity” might be less presumptively virtuous if it were known instead as “arbitrary and unscientific redistribution among more or less favoured interest groups.” But that’s what it is.
Can one really be opposed to “pay equity”? It’s a tough, dirty job but someone’s got to do it. And it’s not actually that hard since the concept qualifies as extreme junk social science, so here goes.
First, to set the ideological context, this was not, alas, a landmark case in which the Ontario Superior Court decided to overthrow the “pay equity” laws. Quite the contrary. Pay equity came a-cropper on a technicality. The Canadian Union of Public Employees had taken Lakeridge Health Corp. before the province’s Pay Equity Tribunal, complaining that although predominantly female clerical workers employed in the corporation’s hospitals had the same maximum salary as its predominantly male janitors, the female workers typically took 24 months to get to the top of their job scale while on average the male workers got there in only nine. Note that the pay scales in question were part of a collective agreement CUPE itself had negotiated.
Because Ontario’s pay equity law doesn’t say anything about the speed of ascent on a pay grid, the Pay Equity Tribunal had quite reasonably decided it couldn’t do anything about this insidious new form of systemic discrimination against women. The court agreed, albeit almost apologetically, and helpfully indicated to CUPE that if it wanted to make the case that the law’s neglect of this disturbing new loophole — our term, not the court’s — violated women’s human rights, it should complain, not to the Pay Equity Tribunal, but to the province’s Human Rights Tribunal. Which undoubtedly CUPE will do. As the different rates of ascent do give rise, at least temporarily, to lower rates of pay for women, can anyone doubt that, five years hence, the Human Rights Tribunal will in fact find injustice?
So “pay equity” is hardly threatened, despite what left critics of the decision imply. More’s the pity for good economics, alas.
When it was beginning its viral conquest of elite thinking in the 1980s, “pay equity” used to be known as “equal pay for work of equal value.” There were three disadvantages to that phrase: at seven words it was a mouthful; it didn’t contain the emotive word “equity”; and it did contain the phrase “of equal value.”
When people heard the term “equal pay for work of equal value” their first reaction usually was: “Well, yes, of course, work of equal value should be compensated equally” (though that doesn’t necessarily follow). But then there was often a second reaction: “How do you determine when different types of work are of equal value?”
Precisely.
Economists are said to know the price of everything and the value of nothing. But in discussing the value of different kinds of jobs we’re not actually talking about their value in intrinsic or philosophic or holistic or (supply your favourite adjective indicating “beyond grubby commercialism”) terms. Monks contemplating the beauty of the cosmos may well be doing work of higher value in the eyes of the Creator than any other of His, Her or Its children, but that doesn’t mean we’re going to pay them CEO salaries.
In this very economic context, value means economic value. What does the worker contribute to the organization’s — in most cases, the private company’s — output and therefore revenues? Only the employer knows for sure, and even then, when workers work in teams, it may be hard to tell.
To be sure, you can compare jobs for “skill, effort, responsibility and working conditions,” as the law requires employers to do. You can set up fancy points systems and take weighted averages of job attributes and requirements and develop comparable scales, so that one job will score 72 out of 100 and another 85 and still another 63, and if you need help, a whole new industry of equity consultants that has grown up over the last three decades will be happy to assist you. (Do people really wonder why productivity isn’t growing?)
It all looks very sophisticated and scientific. But it’s actually what Friedrich Hayek called “scientism,” something that does indeed appear to be very sophisticated and scientific, but is in fact an elaborate artifice supported by nothing, an intellectual castle built in the air. One might as well try to establish the relative price of apples and oranges by setting up intricate point systems for comparing these two fruits’ texture, colour, caloric content, pleasingness to the eye and so one. It can be done. It can even be done very carefully. That doesn’t mean the outcome isn’t nonsense.
In a free market for work, some people may well agree to wages others wouldn’t. But if one group’s wages are held down artificially or systematically or even systemically, so that their pay is significantly less than their economic value, that provides a wonderful profit opportunity for business. Hiring more underpaid workers means making more money, which most businesses presumably want to do. Moreover, workers themselves can profit by moving to the higher-paid jobs, assuming their unions will let them. As businesses hire more and more of the “exploited” workers and as workers themselves move to unexploited occupations, wages will rise where they were “too low” and fall where they were “too high.”
If hospital custodians make more than hospital clerks, why shouldn’t some clerks become custodians? Women never used to drive city buses, but now urban Canadians see women bus drivers all the time. Women hardly ever used to be doctors, but now med schools are graduating as many women as men, if not more.
If there are legal or other barriers to women moving into fields that pay better, the legislature and courts may want to address that problem. But regulating what people are paid in their gender ghettos? Or, soon, how quickly they move up their ghetto’s scientistic pay grid? What does that kid say in the bank commercial when he’s given a cardboard truck to play with? “It’s a piece of junk.”
Financial Post
Canadian National Occupational Classification
Pay Equity Commission
US – Standard Occupational Classification
Junk Science Week: Pay equity ‘scientism’
CUPE aims to expand the junk science of comparing wages
The front page of Tuesday’s National Post brought rare and heartening news of a defeat in Ontario Superior Court for what, in a perversion of language, is widely called “pay equity.” George Orwell instructed us on the power of language in politics. “Pay equity” might be less presumptively virtuous if it were known instead as “arbitrary and unscientific redistribution among more or less favoured interest groups.” But that’s what it is.
Can one really be opposed to “pay equity”? It’s a tough, dirty job but someone’s got to do it. And it’s not actually that hard since the concept qualifies as extreme junk social science, so here goes.
Related
Equal pay, but there’s no rush: court appeal by unions
First, to set the ideological context, this was not, alas, a landmark case in which the Ontario Superior Court decided to overthrow the “pay equity” laws. Quite the contrary. Pay equity came a-cropper on a technicality. The Canadian Union of Public Employees had taken Lakeridge Health Corp. before the province’s Pay Equity Tribunal, complaining that although predominantly female clerical workers employed in the corporation’s hospitals had the same maximum salary as its predominantly male janitors, the female workers typically took 24 months to get to the top of their job scale while on average the male workers got there in only nine. Note that the pay scales in question were part of a collective agreement CUPE itself had negotiated.
Because Ontario’s pay equity law doesn’t say anything about the speed of ascent on a pay grid, the Pay Equity Tribunal had quite reasonably decided it couldn’t do anything about this insidious new form of systemic discrimination against women. The court agreed, albeit almost apologetically, and helpfully indicated to CUPE that if it wanted to make the case that the law’s neglect of this disturbing new loophole — our term, not the court’s — violated women’s human rights, it should complain, not to the Pay Equity Tribunal, but to the province’s Human Rights Tribunal. Which undoubtedly CUPE will do. As the different rates of ascent do give rise, at least temporarily, to lower rates of pay for women, can anyone doubt that, five years hence, the Human Rights Tribunal will in fact find injustice?
So “pay equity” is hardly threatened, despite what left critics of the decision imply. More’s the pity for good economics, alas.
When it was beginning its viral conquest of elite thinking in the 1980s, “pay equity” used to be known as “equal pay for work of equal value.” There were three disadvantages to that phrase: at seven words it was a mouthful; it didn’t contain the emotive word “equity”; and it did contain the phrase “of equal value.”
When people heard the term “equal pay for work of equal value” their first reaction usually was: “Well, yes, of course, work of equal value should be compensated equally” (though that doesn’t necessarily follow). But then there was often a second reaction: “How do you determine when different types of work are of equal value?”
Precisely.
Economists are said to know the price of everything and the value of nothing. But in discussing the value of different kinds of jobs we’re not actually talking about their value in intrinsic or philosophic or holistic or (supply your favourite adjective indicating “beyond grubby commercialism”) terms. Monks contemplating the beauty of the cosmos may well be doing work of higher value in the eyes of the Creator than any other of His, Her or Its children, but that doesn’t mean we’re going to pay them CEO salaries.
In this very economic context, value means economic value. What does the worker contribute to the organization’s — in most cases, the private company’s — output and therefore revenues? Only the employer knows for sure, and even then, when workers work in teams, it may be hard to tell.
To be sure, you can compare jobs for “skill, effort, responsibility and working conditions,” as the law requires employers to do. You can set up fancy points systems and take weighted averages of job attributes and requirements and develop comparable scales, so that one job will score 72 out of 100 and another 85 and still another 63, and if you need help, a whole new industry of equity consultants that has grown up over the last three decades will be happy to assist you. (Do people really wonder why productivity isn’t growing?)
It all looks very sophisticated and scientific. But it’s actually what Friedrich Hayek called “scientism,” something that does indeed appear to be very sophisticated and scientific, but is in fact an elaborate artifice supported by nothing, an intellectual castle built in the air. One might as well try to establish the relative price of apples and oranges by setting up intricate point systems for comparing these two fruits’ texture, colour, caloric content, pleasingness to the eye and so one. It can be done. It can even be done very carefully. That doesn’t mean the outcome isn’t nonsense.
In a free market for work, some people may well agree to wages others wouldn’t. But if one group’s wages are held down artificially or systematically or even systemically, so that their pay is significantly less than their economic value, that provides a wonderful profit opportunity for business. Hiring more underpaid workers means making more money, which most businesses presumably want to do. Moreover, workers themselves can profit by moving to the higher-paid jobs, assuming their unions will let them. As businesses hire more and more of the “exploited” workers and as workers themselves move to unexploited occupations, wages will rise where they were “too low” and fall where they were “too high.”
If hospital custodians make more than hospital clerks, why shouldn’t some clerks become custodians? Women never used to drive city buses, but now urban Canadians see women bus drivers all the time. Women hardly ever used to be doctors, but now med schools are graduating as many women as men, if not more.
If there are legal or other barriers to women moving into fields that pay better, the legislature and courts may want to address that problem. But regulating what people are paid in their gender ghettos? Or, soon, how quickly they move up their ghetto’s scientistic pay grid? What does that kid say in the bank commercial when he’s given a cardboard truck to play with? “It’s a piece of junk.”
Financial Post