Against “Equal Pay for Equal Work”

(An earlier version of this article appeared on A Voice for Men.)

One of the most persistent talking points of feminists and politicians alike is the gender pay gap. You constantly hear things like, “Women only make 80 cents on the dollar,” and “Women are paid 23 per cent less for the same work.” Feminists demand equal pay for equal work, and they even have the UN’s Universal Declaration of Human Rights (UDHR) on their side: article 23, paragraph 2 says,

Everyone, without any discrimination, has the right to equal pay for equal work.

But what does that even mean? What is equal work? Equality without any qualifiers doesn’t make any sense. Two things can only be equal in some particular attribute. For example, a rock and a bottle of water may both weigh one kilogram and therefore be equal in regard to mass, but they are also different in many other regards and hence aren’t equal in general. Since neither the feminists nor the UDHR specify what kind of equality they’re talking about, I’m going to assume they mean equality of value.

Does “equal pay for equally valuable work” make sense? The problem here is that value is subjective. Just because Alice regards two things as equally valuable, doesn’t mean that Bob has to agree. In fact, people differ a great deal in what they value how highly. Thus, there is no objective way to say that two particular labour services are of equal value.

The question then is: whose valuation matters? The answer should be quite clear: Since the employer is the one who buys labour services, he is the one who decides how valuable they are to him. The employer is the consumer of labour, so it should be he, and no one else, who decides how much he is willing to pay. An outside observer isn’t able to assess the value of a particular employee to the employer because no third-party knows as much about the employer’s preferences as the employer himself.

Thus, no one can ever reasonably accuse an employer of paying unequal wages for equal work. If Carl the Capitalist pays Alice less than Bob, then that must mean he values Bob’s work more highly (or else that Bob did a better job negotiating his wages, but then the fault for being paid less lies squarely on Alice and she has no grounds for complaint). Maybe Carl’s assessment is faulty. Maybe his assessment of Bob’s work being more valuable is just due to ignorance or fallacious reasoning and if he knew and understood all the relevant facts, he would actually prefer Alice’s work. But an outside observer can’t know that. An outside observer who suspects that Carl isn’t taking into account all of the facts can of course go to Carl and point this out to him, but in the end Carl is the only one who can properly assess the value of his employees to him.

But the proponents of equal pay insist that there are objective criteria by which the value of workers can be measured, such as education, previous work experience, and seniority. It’s true that these factors can be objectively measured, but they do not directly determine value. They will influence the value of an employee to any reasonable employer, but no outside observer can determine by how much. They are also merely crude statistical tools. It’s entirely possible, for example, that a highschool dropout is smarter and better educated than someone with a university degree. Most university graduates are better educated than most highschool dropouts, but not all. An employer who knows his employees well can make this evaluation; an outside observer using only objective and easily quantifiable data cannot.

There are also many other considerations for how valuable a worker is to an employer. Maybe Carl just likes Bob better and enjoys his company. Maybe Bob gets along better with his colleagues and superiors. Maybe Carl judges Bob to be more competent at his job. Maybe Bob is good about helping out his colleagues. Maybe Bob is more reliable. There are a hundred possibilities here. No outside observer could ever hope to recognize, let alone objectively quantify, all relevant factors.

To illustrate the absurdity of the position that value can or should be judged by outsiders based on objective criteria, let’s consider a different market. Suppose Alice wants to buy a laptop computer. After some deliberation, she decides on an Apple MacBook Air. At this point, Olivia the Outside Observer comes in to stop Alice. After all, there is a product from a different brand that has the same specs but is cheaper than the MacBook. This, Olivia says, is discrimination, and Alice shouldn’t pay unequal money for an equal product.

Of course the two different laptops are not equal in value to Alice. She prefers the Apple product, even though it is more expensive. Maybe all her friends also own Apple products and she doesn’t want to stand out, or maybe she regards it as a status symbol. Maybe she prefers the design, or maybe she thinks that the MacBook will be easier or more comfortable to use. I don’t think anyone would want to forbid her from buying the product she prefers, but if the “equal pay for equal work” advocates were consistent, they would have to condemn Alice’s decision. If this principle should apply to the sale of labour services, then why not to all other goods and services?

Another possibility to determine whether work is equal is to interpret “equal” as “equal in regard to market prices.” But this avenue of attack doesn’t work at all for the equal pay crusaders. The wage a worker is paid is the market price. Thus, under this interpretation of equality, there is always equal pay for equal work.

If Alice feels her wage is below the market value of her work, she can always find work elsewhere, working for someone who values her services more highly. If she can’t find anyone else who’s willing to hire her at a higher wage, then she was wrong and Carl did not in fact pay her less than her market value.

No matter from what angle you come at it, it’s impossible to determine what equal work is, using objective criteria. Legislation that forbids unequal pay for equal work is an abomination, spawned by economically illiterate demagogues trying to appeal to ignorant, irrational voters. All these laws do is to intimidate and bully businesses and strip away property rights from business owners.

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