Ch. 11: Employment and Earnings Policy Topics already covered: –1) verified existence of sex...
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Transcript of Ch. 11: Employment and Earnings Policy Topics already covered: –1) verified existence of sex...
Ch. 11: Employment and Earnings Policy
• Topics already covered: – 1) verified existence of sex
differences; – 2) presented HK explanations; – 3) discrimination.
• This chapter: – 1) Describe government policies
designed to combat labor market discrimination.
– 2) Discuss evidence as to effectiveness of such policies.
Origins of Discrimination Laws
• Early discriminatory laws:– Designed to protect women from
too much exertion, bad language; or provide protection for fetus.
• Marriage or pregnancy “bars”: – Explicit limits based on either;
such as rules against hiring married women or pregnant women.
– In US: overt “bars” gone by 1950s.
Anti-Discrimination Laws
• First laws originated under President Kennedy.
• Equal Pay Act of 1963: – First federal anti-discrimination
law – Mandates equal pay for equal
work.
• Key is to define equal work: – Work that requires equal skill,
effort, responsibility, and performed under similar working conditions.
Most Important Anti-Discrimination Policy
• Title VII of Civil Rights Act of 1964:– Cornerstone of US anti-discrimination
policy; – Much broader than 1963 Act;– Amended several times.
• EEOC enforces Title VII:– Equal Employment Opportunity
Commission; – Independent 5 member commission;– How active depends on which political
party in power • Power exerted via $$ given to EEOC and
who appointed head of Commission.
• EEOC enforces following laws:– ADEA of 1967 (Age
Discrimination in Employment Act);
– Equal Pay Act of 1963: (EPA)– Titles I and V of the Americans
with Disabilities Act of 1990– Sections 501 and 505 of the
Rehabilitation Act of 1973– Civil Rights Act of 1991
Affirmative Action
• History: – Established by Executive Order 11246,
signed in 1965 by President Johnson;– Not applicable to women and enforced for
them until 1972.
• Law requires any company doing business with fed govt (with contracts of $50,000 or more) to agree to not discriminate in any aspect of employment. – Usually affects large firms: universities,
defense industry.– Many large firms not required to follow
details of law do so anyway (to avoid discrimination suits arising from other legislation).
Details of Affirmative Action
• To determine which firms need an AA plan: – Firm documents employment by
sex/race; – If proportions differ from
proportions “in available labor force” then firm must file AA plan.
– Plan includes goals and timetables and methods for implementation.
• Difficult to figure out and implement.
Criticisms of Affirmative Action
• Some critics of AA accuse it of:– establishing quotas (quotas actually
forbidden by the Exec. .Order)
– imposing reverse discrimination (although forbidden by the E.O.);
• Reverse discrimination: when less qualified female or minority hired in place of more qualified white male.
• Some critics say it:– stigmatizes minorities.
– simply shifts minority workers from covered firms to uncovered firms.
Supporters of Affirmative Action
• Because forces diversity in hiring, will remove employment barriers.
• Even if some reverse discrimination, can be justified as remedy for past discrimination.
• Once diverse workforce created, benefits will be seen. – Helps in selling to diverse public;
– Helps ensure firms’ future survival in face of changing workforce (white male no longer majority of workers).
Effectiveness of Anti-discrimination Programs
• Yes many employment outcomes have changed over time.– How much due to laws? – Hard to say.
• To analyze, need lots of data from lots of firms.– Then compare firms covered by AA and
those not covered: any differences in growing diversity? Yes.
– Impact seems to be strong for African American women, small for white women.
– Biggest impact from “casting a wider net” in hiring;
• Helps to assure that minority hires are equally qualified.
• Even when minority hire is less qualified, actual job performance is not lower.
Future of Affirmative Action
• Because courts play pivotal role and political party in power controls the courts, future is evolving. – Courts becoming increasingly conservative.– Some AA has been banned.
• Current cases at University of MI:– Grad school: race used as a factor (adds
points but no quotas);– In 2002, US Court of Appeals said yes
constitutional; – Currently at Supreme Court.
• Note: when AA banned in California: – Took a couple of years for state also to ban
favoritism for legacies or those supported by elected officials.
Comparable Worth• One alternative to AA.
– Would modify Title VII: mandate equal pay for jobs of equal value.
– So even very different jobs could be deemed to be of equal value.
– Complicated process: HOW determine which jobs of equal value?
• Need job evaluation. – 1) Describe all jobs in organization; actual
tasks detailed.– 2) Identify job attributes (or compensable
factors):• skill, effort, working conditions, etc.
– 3) Each job rated on each compensable factor (given a #).
– 4) Assign weights to each factor and produce total score.
– 5) Use JE results to determine pay.
More on Comparable Worth
• Job evaluations:– Very complicated;– Different consultants find very different
results for same firm.
• CW is much opposed by most economists (remove wage setting from market and put it in hands of administrators).
• Studies of CW:– Public sector CW laws in four states:– Could eliminate almost half of gender
earnings gap.– Would cause 8% in business costs.
• May unemployment.• Still controversial.