Equality

The Wage Gap is a very controversial subject these days. In debates discussing the so-called Wage Gap you may have heard many debaters say that Equality of Opportunity is desirable, but Equality of Outcome could be undesirable and even dangerous. The first several times that I heard this statement I agreed with it, and it seemed to make sense. But I have found that I best understand an argument when I try to explain it myself. So for my own sake, here is my explanation of why Equality of Opportunity is a desirable goal, while Equality of Outcome isn't, how that argument is relevant to the Wage Gap discussion, and why it may not be possible to have both Equality of Outcome and Equality of Opportunity without limiting freedom of choice.

I understand concepts best when they are explained using analogies, so I am going to create an analogy for this topic. Let's pretend that we have a Law Firm called Premium Law, LLC. This law firm is growing rapidly, and it has way more potential business than it can handle. In order to keep up with the growing business, the law firm hires two new employees: Keith Burgess and Patti Reynolds.

Now the Wage Gap argument usually starts with people saying that employees should get equal pay for equal work, but it is really difficult to determine what "equal work" even means. What if one employee gets twice as much work done each hour? What if one employee makes fewer mistakes? What if one employee has a Master's Degree and 15 years of experience, and the other employee just graduated from High School, and as a result of education and experience the employee with the Master's Degree does the work faster and more accurately? What if one employee is really, really good with people skills and marketing and brings in twice as many clients as another employee? I have found that analogies work best when they are simple, so let's assume that Keith and Patti are identical employees. They have identical personalities, work ethics, education, productivity, intelligence, etc.

Since the law firm has way more work than it can handle, the law firm has a policy that employees can work as many hours as they want each week as long as they work at least 30 hours per week. Patti and Keith are offered the exact same number of holiday, vacation, and sick pay and are given the exact same health benefits, retirement package options, etc. Employees that work more than 40 hours per week, (including paid leave hours), are paid an overtime rate of time and a half for each hour over 40 hours.

Patti is hired at a rate of $45.00 per hour. Keith is hired at a rate of $42.00 per hour.

Patti's husband has a good job. Patti also has a son with a terminal illness, and she wants to spend as much time as possible with her son before he passes away. Between working hours and paid leave, Patti chooses to work a standard shift of 40 hours per week.

Keith's wife is a stay-at-home mother. His daughter suffers from severe cerebral palsy, and Keith and his wife are trying to save up enough money so that they can pay for a special wheel chair for their daughter and so that they can upgrade their house to be fully accessible for that wheel chair. Between working hours and paid leave, Keith works 60 hours per week.

Let's do the math and see how much each employee makes by the end of the year. In an average year, there are 2,088 working hours if an employee works 40 hours per week, so Patti worked 2,088 hours for the year. Multiplying 2,088 by 60 and dividing it by 40 tells us that Keith worked 3,132 hours for the year, which is 2,088 regular hours and 1,044 overtime hours. This means that the annual income for each employee is:

Patti: $45.00 per hour X 2,088 hours = $93,960
Keith: $42.00 per hour X 2,088 hours + $42.00 per hour X 1.5 X1,044 hours = $153,468

When researchers measure the wage gap for the sexes, they usually compare ANNUAL incomes. So if researchers were comparing Patti and Keith, they would say that Premium Law, LLC discriminates against women because Patti, the woman, made less than Keith, the man, doing the exact same job with the exact same qualifications. Patti was discriminated against because she didn't get the same OUTCOME, (annual pay), as Keith. It is absolutely true that they did not receive the same outcome.

However, from my perspective I see a much more troubling problem. We have assumed that Patti and Keith are identical employees. To me, it doesn't matter how much they get paid for the year. I am more concerned with what they are being paid PER HOUR. Keith is getting paid $3.00 less than Patti for the exact same work. In this scenario, I believe that Premium Law, LLC is actually discriminating against Keith because they aren't giving him Equality of Opportunity. Both employees have been given the opportunity to work as many hours as they want to work, but Keith only has the opportunity to earn $42.00 per hour for that work, while Patti has the opportunity to earn $45.00 per hour for that work.

If our goal is to make sure that both employees receive equal OUTCOMES, what could the government do to make that happen? Here are several options:

Option 1: Legally force Patti to work 60 hours per week. If Patti works as many hours per week as Keith, in this scenario the wage gap will then be in Patti's favor, which at least would make it no longer look sexist against women. What are the possible negative repercussions of doing this? Well, Patti doesn't really need the extra money. She makes a decent salary, and her husband is contributing fully to the family's bills. What she values most is the precious extra time that she wants to spend every day with her dying son. Also, the extra hours could add stress to Patti's life that could impact her health and even decrease her lifespan.

Option 2: Legally force Keith to only work 40 hours per week. If Keith has to limit his hours to the same number of hours as Patti, he will stop making more than she makes. The potential negative repercussions of this decision mean that Keith's daughter may not be able to get the wheelchair and the ADA home that would improve her quality of life. Although Keith might benefit from a health standpoint and from being able to spend more time with his loved ones, he has clearly decided that at least in the short-term providing for his family is his higher priority.

Option 3: Make both employees exempt employees that are paid an annual salary that doesn't change based on the number of hours the employees work. Likely, in this scenario both employees will choose to work the same number of hours since there is no benefit to working more hours than is necessary. This is perhaps the best of the options so far; however, it still means the employees have less choice and less control over their lives.

Option 4: Increase Patti's hourly wage and/or decrease Keith's hourly wage to the point that Patti makes the same amount in 40 hours as Keith makes in 60 hours. This will INCREASE the disparity in the hourly rates, thus increasing the Equality of Opportunity problem, but it would eliminate the Equality of Outcome problem.

I'm sure there are other ways to eliminate the Equality of Outcome problem, but I can't think of a single scenario that wouldn't limit the choices of the employees in some way. Allowing the employees to adjust the hours they work to achieve the goals they want to achieve seems to be the best scenario for everyone.

How can we eliminate the Equality of Opportunity problem? Easy, pay Keith and Patti the same hourly rate. Since the company clearly can make a reasonable profit while paying Patti $45.00 per hour, Premium Law, LLC needs to raise Keith's wage to $45.00 per hour.

Based on this analysis, I believe it is desirable to strive for Equality of Opportunity, but I don't really care about Equality of Outcome. I do care if someone's outcome is really terrible, for example, someone who works 40 hours per week who has very modest expenses, but who still cannot make basic ends meet. We do have very real problems in this society that we need to solve. I do care about someone who has trouble asking for the wage they deserve simply because they are too agreeable.

But I also truly believe it when experts say that the so-called Wage Gap, in other words people getting paid different rates SOLELY on the basis of their gender, isn't a real thing, or if it is a real it actually is biased in favor of women. I'm not saying this because I believe my specific analogy is true. I'm just saying that I can easily see that if on average men work more hours than women and researchers are only tracking annual income it will obviously make it look like a phantom Wage Gap exists when it isn't really there.