Page 424 - The Principle of Economics

432 PART SIX THE ECONOMICS OF LABOR MARKETS
comparable worth
a doctrine according to which jobs deemed comparable should be paid the same wage
THE DEBATE OVER COMPARABLE WORTH
Should engineers get paid more than librarians? This question is at the heart of the debate over comparable worth, a doctrine whereby jobs deemed comparable should be paid the same wage.
Advocates of comparable worth point out that traditionally male occupations have higher wages than traditionally female occupations. They believe that these oc- cupational differences are discriminatory against women. Even if women were paid the same as men for the same type of work, the gender gap in wages would persist until comparable occupations were paid similar wages. Comparable-worth advo- cates want jobs rated according to a set of impartial criteria—education, experience, responsibility, working conditions, and so on. Under this system, comparably rated jobs would pay the same wage. A librarian with a master’s degree, ten years of ex- perience, and a 40-hour workweek, for instance, would be paid the same as an engi- neer with a master’s degree, ten years of experience, and a 40-hour workweek.
Most economists are critical of comparable-worth proposals. They argue that a competitive market is the best mechanism for setting wages. It would be nearly impossible, they claim, to measure all of the factors that are relevant for determin- ing the right wage for any job. Moreover, the fact that traditionally female occupa- tions pay less than traditionally male occupations is not by itself evidence of discrimination. Women have in the past spent more time than men raising chil- dren. Women are, therefore, more likely to choose occupations that offer flexible hours and other working conditions compatible with child-rearing. To some ex- tent, the gender gap in wages is a compensating differential.
Economists also point out that comparable-worth proposals would have an important unintended side effect. Comparable-worth advocates want the wages in traditionally female occupations to be raised by legal decree. Such a policy would have many of the effects of a minimum wage, which we first discussed in Chapter 6. In particular, when the wage is forced to rise above the equilibrium level, the quantity of labor supplied to these occupations would rise, and the quantity de- manded would fall. The result would be higher unemployment in traditionally fe- male occupations. In this way, a comparable-worth law could adversely affect some members of groups that the policy is aimed at helping.
QUICK QUIZ: Why is it hard to establish whether a group of workers is being discriminated against? N Explain how profit-maximizing firms tend to eliminate discriminatory wage differentials. N How might a discriminatory wage differential persist?
CONCLUSION
In competitive markets, workers earn a wage equal to the value of their marginal contribution to the production of goods and services. There are, however, many things that affect the value of the marginal product. Firms pay more for workers who are more talented, more diligent, more experienced, and more educated be- cause these workers are more productive. Firms pay less to those workers against whom customers discriminate because these workers contribute less to revenue.