Saturday, September 13, 2008

Equal Pay, in Practice (Obama doesn't practice what he preaches)

Recently, Presidential candidate Barack Obama has been talking about "equality" for women, as measured by what he calls "equal pay for equal work".

There are a lot of numbers thrown out comparing how much women get paid, as compared to how much men get paid.

The first problem of course, is how you compare jobs, situations, performance -- what makes two jobs "equal". It's easy if you have two assembly workers that both do a weld. Of course, in that case there is "equal" pay, although it might be based on seniority.

The second problem is how do you account for personal choice when making a comparison? For example, in most cases some jobs are preferred by men, while other jobs seemed to be preferred by women. So, if more men want to collect trash, and more women want to work in the local library, how do you compare "equal pay for equal work"?

In a perfect free-market society, equal pay wouldn't be an issue. The market would dictate how much each job was worth. If one company insisted on not paying women as good as men, they would tend to get workers that were less qualified, and a competitor who paid women equally would win the competition.

And in fact, a lot of what is seen as discrimination toward women is simply the market reflecting the employer's ability to find an adequate pool of workers. If I advertise a job for $10 an hour, and no man wants to work for that money, but several women do, I will hire the woman. If down the street someone offers $15 for the same job, and they hire a man who is more qualified than any women, my hire will look like she is "underpaid" for the same job, but the problem was that she was willing to work for that amount.

A great example of the difficulty of "Equal Pay" in practice is the senate staff for the two presidential nominees. Deroy Murdock, national columnist, examines the pay practices of Obama's and McCain's Senate Staff, and finds an interesting disconnect. While Obama attacks McCain for not supporting "equal pay", Obama actually pays HIS female staff less than his male staff, while McCain pays his female staff MORE than his male staff, and more than Obama.

From his article Obama’s female staffers shortchanged:

Based on these calculations, Obama’s 28 male staffers divided among themselves total payroll expenditures of $1,523,120. Thus, Obama’s average male employee earned $54,397.

Obama’s 30 female employees split $1,354,580 among themselves, or $45,152, on average.
Why this disparity? One reason may be the under-representation of women in Obama’s highest-compensated ranks. Among Obama’s five best-paid advisers, only one was a woman. Among his top 20, seven were women.

Again, on average, Obama’s female staffers earn just 83 cents for every dollar his male staffers make. This figure certainly exceeds the 77-cent threshold that Obama’s campaign Web site condemns. However, 83 cents do not equal $1. In spite of this 17-cent gap between Obama’s rhetoric and reality, he chose to chide GOP presidential contender John McCain on this issue.

So, how does McCain stack up?:

McCain’s 17 male staffers split $916,914, thus averaging $53,936. His 25 female employees divided $1,396,958 and averaged $55,878.

On average, according to these data, women in McCain’s office make $1.04 for every dollar a man makes. In fact, all other things being equal, a typical female staffer could earn 21 cents more per dollar paid to her male counterpart - while adding $10,726 to her annual income - by leaving Obama’s office and going to work for McCain.

(btw, note that McCain, in the Senate for over 20 years, has a total of 42 staff. Obama, a 1st-termer, has 58. McCain pays out about $2.2 million, Obama $2.9 million. It is clear which one is more likely to hold down spending in government).

Also, McCain apparently values the opinions of women more than Obama. For while only ONE of Obama's top 5 advisors is a female, THREE of McCain's top aides are female:

One explanation could be that women compose a majority of McCain’s highest-paid aides. Among his top-five best-compensated staffers, three are women. Of his 20-highest-salaried employees, 13 are women. The Republican presidential nominee relies on women - much more than men - for advice at the highest, and thus, best-paid levels.

But what this shows is that, in practice, even a guy who pretends to be for "equal pay" doesn't seem to be able to achieve it, because in fact the staff don't all do the same job, and can't be "equally compared".

But Obama favors laws which would allow the Federal Government to build a registry of "comparable jobs" and force employers to pay women more for work than is necessary to make them satisfied employees. This will make our country even LESS competitive, and will discourage the hiring of women (I'm sure Obama will make quotas for that as well to solve the problem).

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