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The Market's Impact on Pay - Or Why Ann Bares is Smarter Than Congress...

During the election cycle, it was hard to be a market kind of guy or gal.  The stock market went to the dogs, the bailout of the banks made our country look like France, and let's face it - the Republicans in office weren't exactly the "less government" ilk of the Reagan years.

Now that the election's over, lots of free market people are starting to regroup and consider the wisdom of Gecko too much regulation and too much government in the place of markets.  It's a fair place to be given some of the legislation that's scheduled to be considered in Congress over the coming months.

Ann Bares is one of those market-driven professionals.  Here's Ann on the Paycheck Fairness Act, and why comparable worth language was removed from the bill before it passed the house on the way to the Senate:

"Pay equity proponents have a tendency to view the labor market (and its incentives) as the enemy - a force that must be cowed and overcome in order to even the playing field for women.  This is the reason that comparable worth initiatives (which, at their core, seek to override the influences of the market on pay) are such a common centerpiece of pay fairness initiatives.

Many, in the private sector (in general) and among businesspeople in particular, take exception to these anti-market provisions.  This is why they have been (mostly?) removed, for the moment, from this month's version of the Paycheck Fairness Act.  And this is because the market, in fact, performs an important and necessary task, not just for business but for our society as a whole, in exerting its influence on pay.  The market drives pay differences, not on some arbitrary and capricious whim, but for a purpose, the purpose of meeting society's demands for different skills and contributions.  Mess with the market and you mess with our collective ability to get the work done that is necessary for our country to grow and prosper - particularly in today's flatter world.

The market, for example, has created incentives - in the form of higher pay - for many scientific and engineering jobs; jobs where need and demand continues to outstrip supply, where we have often been forced to import talent when the homegrown kind comes up short, and where (most unfortunately) men significantly outnumber women.  Can the answer be to override these market incentives in the name of gender equity, thus handcuffing our ability to meet our talent needs - in a time when technological innovation and improvement are so critical?"

Or could the answer be to embrace that market on behalf of women?

Again - pay equity GOOD (and many of you work towards this in your practice daily); government as a replacement for markets BAD.  Be a critical thinker, no matter how cushy the title of a bill sounds. 

Like so many laws, if you're a quality HR pro or recruiter who has to value talent, you're already looking at variations in offers to candidates with a critical eye.  You don't need a government threat to treat people fairly.  That's good, because that's what you should do.  Unfortunately, more legislation is only going to put pressure on you to dumb the process down, and stop being aggressive with comp when it's warranted - for female, minority and white male candidates alike.

I come from a family of working women.  My grandmothers, my mom and my wife.  I want them to be comped fairly, and growing up the way I did gave me an appreciation for the value of women in the workplace.

But the government as a replacement for the markets in determining comparable worth?



Ann Bares


Wow. Thanks for the link, the plug and for calling attention to this discussion.

Ann Bares

... but Gordon Gekko, dude?

Michael D. Haberman, SPHR

Ann is indeed very smart and insightful. Her blog is a must read for anyone in HR. But smarter than Congress? That is really a pretty low standard. She is MUCH, MUCH, MUCH SMARTER than Congress. Hell, a toad is smarter than Congress.

Kris Dunn

Mike -

Good point. Ann is smarter than Congress AND toads. I stand corrected...

Ann - Don't view Gekko as bad. He's a market guy. A market manipulator, but a market guy nonetheless. Name a woman capitalist recognizable by all and she goes up next time I applaud you in Gekko's place...

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