Friday, March 13, 2009

Harper's move on pay equity a good one

According to the Harper government, Canadian taxpayers have covered over $4-billion in pay equity disputes and settlements heard at the Canadian Human Rights Commission (CHRC) since the right for equal pay was introduced in 1977. The government’s proposal – known as the Public Service Equitable Compensation Act – would forbid CHRC from hearing pay equity complaints from federal public servants – a body of 400,000 workers – and instead make it an issue for negotiations during collective bargaining, claiming that both the employer and the union will be responsible for ensuring equitable compensation.
--from an article in the McGill Daily.

Once the politics is stripped away and one looks at the fine print, pay equity is a questionable concept with even more questionable implementation. Obviously a man or a woman doing the same job equally well should be paid the same. But pay equity isn't about that. It's about a nebulous concept that assumes discrimination in places it may not be there.

Here's a hypothetical example. A business pays its secretaries $30,000 and most of them are women, but it pays its managers $100,000 and most of them are men, that could be a sign of systemic discrimination.

Of course, this is not necessarily the case. But if the case goes forward, an arbitrator has to make an ARBITRARY decision about what real "fairness" should look like. How can one possibly judge this? A judgment on the inherent "value" of a certain work vs. another can never truly be done by some independent mind.

In the end, pay is not just about "fairness" but about market forces. If there's an abundance of potential hires for secretaries and very few qualified managers, obviously one could hire a secretary for lower wages but will have to pay more to get a high-quality manager. The employer himself (or herself) assesses the "value" of such work by paying people with what gives them a profitable business. Moreover, the people working for him or her have agreed to that wage. If the secretaries are paid less, it does not necessarily imply systemic discrimination.

The other problem with pay equity is that it never brings wages down, only up. So if the managers are getting $100,000 and the secretaries $30,000, you'll never see pay equity bring managers' wages down to $90,000. You might see secretaries get up to $40,000, however. No wonder the unions love it.

A pay equity case brought forward against Canada Post in 1983 was still in the courts25 YEARS later! The complaint wound its way through human rights commissions and various court proceedings. At last in 2008, a Federal Court of Canada judge ruled there was no discrimination and lamented the waste of time and money spent over nothing.

It is the kind of case that would not have occurred had the above legislation already been in effect. This legislation will restore the amount of pay to its proper jurisdiciton: the negotiation of employees (represented by their union) and their employer--the government.

Will this save taxpayer dollars? Yes, and so it should.

1 comment:

Anonymous said...

If every case of pay equity was like the one you described that would make sense. It isn't. And it doesn't. Having the tax payers (half of whom are women) saving money on the backs of the workforce (those previously mentioned women) it's a good idea, and it does not make sense.

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