In April, a version of Edvard Munch's The Scream, one of the most recognizable images in art history, sold at Sotheby's for just under $120 million, the most ever paid for an artwork at auction.
Most people seeing it wouldn't be inclined to even pay $1.20 for it so how was its value determined? The same way the value of anything is determined - when a willing seller and a willing buyer agree on a price (somewhere between the minimum a seller is willing to accept and the maximum a buyer is prepared to pay) that establishes its worth.
In a free and open market, we willingly buy or sell anything and everything according to those parameters, including our labour. Those parameters vary according to the law of supply and demand, a basic fundamental of economics.
The federal government has decided to interfere in the free market and bring in pay equity legislation that would ensure women are paid the same as men for "work of equal value," meaning different jobs. That isn't the same as equal pay for the same work which isn't an issue - it's relatively rare that men and women are paid differently for doing the same job.
The questions arise: Who decides the value of disparate jobs and what criteria will determine what each and every job is worth? Will a central bureaucracy compile a list of the nation's jobs and assign value to each? Will employers be audited to ensure compliance? How are employers expected to know what is considered by government bureaucrats to be equitable pay?
In the real world, rates of pay are determined according to supply and demand. If a woman isn't willing to work as a clerk for a low wage, there are plenty of others who are, so the pay won't rise. If an office clerk for BC Hydro wants a lineman's pay, could she not get it by doing a lineman's job? (Incidentally, I have no idea what Hydro's pay rates are.)
Many professions and careers that were once the domain of men are now equally the purview of women, but not all. Women who drive logging trucks get the same pay as men, pay that is much higher than the office clerk, yet few women drive the big rigs. Is it because they're not willing to get up in the middle of the night and spend 12 to 15 hours a day on the job? Could it be that they don't consider the income worth the effort or that they have other priorities such as children? Could it be that because many women aren't willing to do what it takes to get the higher pay that there's an overabundance of them available for easier jobs which drives down the pay for those positions?
Somehow the government has become convinced that it's their duty to regulate pay scales, perhaps because political campaigns are so frequently a matter of portraying themselves as the solution to all our problems. The more government does for the people, the more the people want done for them instead of doing for themselves.
Big Daddy knows best. Is there a perceived problem? Then follows the demand that the government should do something! It's an attitude of dependency that governments are often happy to exploit.
Governments love regulation, they constantly bring out new ones but never seem to repeal any so the regulatory burden on the economy keeps growing. Pay equity legislation will impose more costs for employers, and more regulatory cost means a reduction in money available for other areas, such as wages, meaning while some workers will certainly gain, overall employees will lose. This legislation by itself will not likely have much impact on the economy but it adds to the regulatory burden that hurts our competitiveness in the world economy.
A certain amount of regulation is required to ensure the smooth functioning of the kind of economy we've become accustomed to in Canada, but over-regulation can destroy it. Pay equity legislation would seem to be a case of unnecessary government meddling in an economy that they don't quite comprehend.
How much government is too much government?
Someday we may find out.
-- Art Betke
