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Equal pay vs. “he’s got a wife and kids”

by Greg Krehbiel on 22 January 2018

From a strictly practical point of view, labor should be treated as a cost. If I run a business that needs staples, and a new supplier can provide them for less than the supplier I’m using, I should switch suppliers. Likewise, if one of my employees has been doing some job for me for $50K a year, and I can get somebody else to do it for $40K, I should fire my current employee and hire the person who can do it cheaper.

But that seems heartless. We’re often told that we shouldn’t treat people the way we’d treat a commodity. People have a right to earn a living wage, and so on. Businesses have a responsibility to take human needs into consideration.

Or do they?

Keep that in mind while you read this (taken from this article).

When [Ginsburg] began teaching at Rutgers Law School and found out how much of a salary cut she would be taking, she inquired how much a male colleague who had been out of law school the same amount of time was being paid. The dean replied, “Ruth, he has a wife and two children to support. You have a husband with a good paying job in New York.”

That was the same year the Equal Pay Act passed and “that was the answer I got,” remarked Ginsburg. The women at Rutgers got together and filed an Equal Pay Act complaint and eventually the university settled.

Do you see the tension here?

Is the employer supposed to treat all employees equally, or is the employer supposed to make some consideration for life circumstances?

The employee with a non-working spouse and two children at home clearly needs more money than the employee with the working spouse and no children. But … “that’s not fair.”

Compare this to the situation where one worker offers to do a job below minimum wage. The company isn’t allowed to take that offer because they have to pay the other working a “fair” wage, and this is presumably because of some calculation of a minimum living standard.

Why does the second employer get to discriminate and pay one person more based on somebody’s conception of living standards, but the first employer can’t?

2018-01-22  »  Greg Krehbiel

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