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The pay equity decision.

Much has been discussed about pay equity, employment equity, and affirmative action. A brief review of the main arguments put forth by the opponents and proponents of pay equity will help organizations develop their response to the pay equity debate.

Pay equity means paying men and women according to a single, gender-free pay scale. Evaluation schemes are used to measure the value of a job based on a combination of skill, responsibility, effort and working conditions. Jobs are evaluated and assigned a rating; jobs with the same rating are paid the same wage. Typical studies have found nurses should be paid more than police officers and clerk stenographers should be paid the same as boilermakers.

Why not?

The most persuasive argument against pay equity is the immediate labour cost. Women make up almost half of the paid labour force but earn only 2/3 of what men earn. Estimates put the cost of raising female wages to the level of male wages at 3.7 to 4.0 percent of total payroll.

Opponents of pay equity contend that free market wages are set in relation to what the worker produces, not the characteristics of the worker or the job. A worker makes a product which is sold in a free market, demand sets the price of the product which sets the price of labour. Pay equity is said to interfere with the natural determination of wages in the free market.

Opponents will reason that the disparity in pay between women and men is the result of women choosing from a limited number of occupations, thereby crowding each other and driving the market wage down. Currently 41 percent of all women work in only 10 occupations. Much work is being done to prepare and encourage women to expand their choices of occupations. Affirmative action and employment equity programs are prescribed to ensure those choices exist.

Opponents of pay equity contend that men have never benefited from affirmative action programs therefore they should not suffer from them. Other opponents reason it is impossible to undertake affirmative action and pay equity programs during an economic downturn.

Other arguments include statements that "Women are too family oriented, and men are not..." and a dislike of being dictated to by "special interest groups". These arguments are summarized as "Having a business to run" by pay equity opponents and as "A fear of change" by pay equity proponents.


Proponents of pay equity say long term labour costs will benefit from pay equity. Society and business will benefit from increased productivity resulting from a reallocation of resources as men and women choose careers more related to their abilities.

The basis for pay equity is the "demand side" argument. That is - "Women's work has been undervalued throughout history," partly due to discrimination concerning women's abilities and partly because men were considered to be supporting a family while women were not. Workers who are believed to be incapable are not hired for demanding jobs. Also, since women's work in the home has no monetary value, women are hired at the low end of the pay scale.

Traditionally family-oriented work is seen as more natural for women who are employed in service and clerical occupations while men are employed in managerial and professional jobs. Affirmative action and employment equity are also solutions for the demand side argument.

Proponents of pay equity contend that men and women rarely compete for the same job. Men have not experienced "women's work" and assume it is low skill therefore affording it low pay. A pay equity analysis is seen as the best way to identify these stereotypes.

Proponents of pay equity reason that many organizations have policies such as veteran's programs which they see as male affirmative action programs. For example, the Federal Public Service Employment Act allows veterans and other armed forces, RCMP, or CSIS personnel into second careers in the public service.

Proponents point out that the Veterans Preference program placed 1400 ex-military in the Federal government between 1985 and 1988, while only 600 women benefitted from the government's affirmative action program for women. All this at a time when the public service was downsized to 1970 levels.

Proponents of pay equity state that women are disproportionately represented among Canada's poor. In 1985, 42 percent of female-headed families lived in poverty. Higher wages for these women would drastically reduce the government's assistance to them and their families. Increasing women's pay would increase their standard of living and encourage more women to enter the paid workforce, thereby decreasing poverty related costs. The additional wage women earn would increase their purchasing power, not to mention the national tax base. Through a multiplier effect these dollars would spread through the economy possibly adding a boost out of a deepening recession.

Proponents of pay equity argue the "Synergy" factor. Productivity and cost effectiveness are all enhanced by the diversity of experience, style and training in the workplace.

Organizations that act now will be prepared as the demographics of Canada change. There will be a shortage of skilled workers in the next century. In the past decade females consistently outnumbered males as the recipients of undergraduate university degrees. Women are becoming the primary pool of educated workers. Proponents also use these education figures to assert that women have earned the right to attain higher wages and higher positions in the workplace.

Also, pay equity proponents contend that the only organizations who need to feel threatened are those who have been knowingly promoting discriminatory practices.

In the final analysis pay equity proponents say, organizations can nurture a diverse workplace because they believe in fairness, or they can wait to be forced to do so by legislative initiatives.

Currently in Canada there are pay equity legislative requirements at the federal level and in many provincial jurisdictions. The number of institutions covered by legislation is constantly increasing.

In the final analysis each organization, each manager, must make their own pay equity decision. The workplace is changing. Change is always a challenge, whether it results in a setback or an opportunity depends on our attitude and our preparedness. The decision is yours.
COPYRIGHT 1991 Canadian Institute of Management
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Author:Farrant, Sylvia
Publication:Canadian Manager
Date:Mar 22, 1991
Previous Article:Executive director's corner.
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