Tag: Capitalism & Consumption

James Surowiecki takes on equal pay in the New Yorker — and the article is well worth a read. He recounts the Ledbetter case, wherein Lily Ledbetter worked for Goodyear Tire for years, and in the mid-nineties received an anonymous note telling her that all the men at Goodyear were being paid more than she was, for doing the same work. The case went up to the Supreme Court, and the Court held that the statute of limitations on pay discrimination runs upon receipt of the first paycheck — meaning that you’d better figure out you’re being paid unequally within 180 days of being paid the first time, or you’re out of luck. But the Court did leave the door open for Congress to change the statute of limitations to make the window to sue more reasonable. Congress tried to do just that.

Republicans fillibustered until the bill was dead. John McCain also opposed the bill. In the last debate, McCain argued that the bill would have been a trial lawyer’s dream, because it would mean that they get to file more lawsuits. Well, yeah — that’s kind of the point. If people are being discriminated against, they deserve a fair amount of time to figure that out and take action. 180 days doesn’t cut it. What McCain and other Republicans did was intentionally set up roadblocks to curing pay discrimination.

In essence, they made it clear that they support unequal pay for equal work.

Does the Ledbetter bill matter? It’s true that active discrimination is rarer these days than it once was. But, contrary to what much economic work would predict, racial and sex discrimination is still a powerful force in the job market. Decades ago, the economist Gary Becker showed that “taste-based” discrimination (pure prejudice) could not survive in a truly competitive talent market, because unprejudiced companies would outperform prejudiced ones by hiring smart women and minorities. Yet the introduction of blind auditions at major symphony orchestras, starting in the seventies, has increased by fifty per cent the likelihood of female performers’ advancing—a clear sign that, for decades, orchestras had made bad talent decisions because of their prejudice without being punished. More striking, recent work by Kerwin Charles and Jonathan Guryan, of the University of Chicago, shows that, under certain reasonable conditions, market competition will not necessarily eradicate discrimination. That may be why, they suggest, the gap between black and white wages is widest in the most prejudiced parts of the U.S.—precisely what you’d expect if businessmen could discriminate and get away with it.

Of course, just because the market can’t prevent discrimination doesn’t mean the government should. And so there is a principled argument against the Ledbetter bill: namely, that Lilly Ledbetter was an adult; that if she didn’t think she was being paid fairly she was free to ask for more money or to leave; and that government interference with the idea of what constitutes fair pay is likely to cause more problems than it’s worth. Unlike the current opposition to the bill, this is an honest position to take. But it’s also, for good reasons, a profoundly unpopular one, which is why few Republicans have voiced it. Instead, opponents of the bill have acted like McCain, proclaiming their support for fair pay while doing their best to insure that workers have a hard time getting it. Maybe it’s time for them to give Americans some straight talk and unveil a new slogan: “Unequal pay for equal work.” It may not be catchy, but at least it’s honest.

Another thing to keep in mind when you go to the polls in two weeks.