Comparable worth: some questions still unanswered, (EXCERPT), Monthly Labor Review Online, December 1985

Comparable worth:
some questions still unanswered

Sandra E. Gleason

A careful analysis of comparable worth as a national policy ideally should proceed by first defining the problem for which the concept of equal pay for different jobs of equal value to the employer is a perceived remedy. The first step could serve as the basis for the second step—determining the important causal factors and evaluating the costs and benefits of a comparable worth policy relative to alternative policies. Once these steps are completed, a remedy can be chosen through the political process based on informed judgments.

Unfortunately, as noted in the accompanying articles by Carolyn Bell and Karen Koziara, a complete and balanced policy analysis of comparable worth has not been conducted. As a consequence, questions remain unanswered, including: What is the magnitude of the employment impact resulting from labor supply and demand responses to the wage increases? What is the potential inflationary impact on the economy? What is the cost of comparable worth policy relative to alternative policies, such as occupational desegregation?

Economic theory can be used to predict the direction of labor market adjustments. We know the comparable worth wage increases required to remedy pay inequities for "underpaid" traditionally female-dominated jobs have averaged 20 percent; therefore, we can predict, other things being equal, that employers will hire fewer employees in these jobs. However, at the same time, the increase in the relative wage will make these jobs more attractive, thereby encouraging more people, particularly women, to seek positions in these already crowded occupations. In addition, this wage increase will deter some women from moving into nontraditional jobs, thereby slowing the pace of occupational desegregation. However, because we do not have an estimate of the labor supply functions in the traditional female occupations, we do not have an estimate of the size of the labor supply effect.

This excerpt is from an article published in the December 1985 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

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