#performancebonus

Iceland legislates equal pay for women

FD6A0813-35BF-444A-8544-C58363BEACB0

Google statistics on the gender pay gap and you can find an endless supply of stats supporting women earning a fraction of that of men. Iceland has now made it law. Companies with 25 members of staff and over are obliged to obtain government certification of their equal-pay policies or face being slapped with financial penalties. It makes absolute sense to pay equally for identical work but we all know from our own experiences that all workers don’t perform equally in the same role. That goes for both genders.

Take two salespeople (ignore gender for now). They both work the same hours, are both the same age and have exactly the same qualities. Over whatever time period set the first outsells the second person on a 2:1 basis. Competition in their industry is rife and the employer is worried that it might lose one of is better performers if it can’t reward them appropriately.

In a previous role as head of a sales department, the top saleswoman was paid considerably more than male counterparts for “performance”. Same role, same rank, similar age and tenure. Better pay. It was rational. Gender was irrelevant. Performance was what mattered. Would the Iceland law makers censure the gender discrimination against the men in the team? Not likely. Surely it would turn a blind eye and inwardly celebrate an overturn of decades of perceived injustice!

Companies will get tied up in irrelevant, costly and onerous red tape to defend common sense. That is time consuming. Companies will need to hire a whole department to protect them from behaving too commercially or rationally. All of a sudden instead of dealing with customers staff and management spend a growing amount of time ticking internal boxes so the company doesn’t get into any trouble. Customers lose and ultimately the company becomes less profitable as a result. Lose lose.

Take it a step further. If companies could hire one group for 20% less than another for exactly the same output why would they bother paying a premium for it? Makes no sense. So the argument that women are paid less for the same role is nonsense. Why would companies bother to hire men?

Take the world of super models. The top 20 females get paid north of $1mn per annum. There are two males that achieve it. Where are the masculinists screaming for equal pay? Is it not the corporation that sees more value in having Giselle Blundchen’s sultry looks than some 6-packed dude from the Polo Ralph Lauren catalogue? Same work? Not same pay! Still Giselle’s agents know her value to the ultimate revenues of a cosmetics company that Joey Sixpack simply can’t generate. Is that unfair? Surely if Giselle has her pay capped at 1/10th current pay she might refuse to work.

Regardless of the debate over gender balance, it is not strange to see men dominate the numbers in the military, emergency services and construction. These are workplace choices. If 80% of the people who want to apply for a particular industry are men or women then why force gender balance? Doesn’t the sheer number of men or women applying for a particular type of job speak volumes about real interest? Should army recruiters in Australia face demotion if they don’t hit gender targets? Should we want our military to be a social experiment or the most capable force of defending a nation? If more men are willing and capable to serve in artillery battalions why should we deny them? Isn’t motivation a desirable trait?

Another flaw in the gender pay argument is that of classification. Stanford Professor Thomas Sowell suggested personal and workplace choices account for much of the gap…perhaps the biggest reason is biology. Women make up 50% of the workforce but give birth to 100% of the babies. And if women choose to have children, their incentives change and this affects their choices of jobs, careers, continual service and hours spent on the job…and data compiled from the Census Bureau, unmarried women who’ve never had a child actually earn more than unmarried men…according to the Labor Department, “of men and women who work 30 to 34 hours a week, women make more, 109 percent of men’s earnings.

Of Sowell’s points, continual service is important. If a woman takes 10 years out of the workforce to raise kids while her husband is able to continue in his job one would imagine prospects for promotion would be on balance higher than hers if she returned to the workforce after a long absence. It doesn’t preclude women couldn’t climb a ladder or overtake her hubby but on balance this is but one factor.

The gender pay gap is a statisticians dream. One could slice and dice it to get the result one wants. However isn’t it an insult to women to think they need a regulated leg up in life? Some of the most successful women Known to CM are determined and the last thing that crosses their mind is that being a women is an impediment. Their drive and determination was an inspiration.

The left leaning Fairfax Media is already pointing fingers at Australia to adopt Iceland’s lead. Just what Australian industry needs. More red tape.