Saturday, October 1, 2022

The new gender pay equality law will have a negative impact on women workers: academics

An academic said that the federal government’s new gender pay equality law will have the opposite effect and actually harm the actual interests of women workers.

The Pay Fairness Act, which came into effect on August 31, requires federally regulated employers with 10 or more workers to propose a pay fairness plan within three years.

Filomena Tassi, the minister of labor before the election, stated that the bill was approved by the royal family in December 2018, which means that women will receive equal pay for work of equal value, which is “a step towards closing the gender wage gap. An important step forward.” According to Statistics Canada, for every dollar a man makes, women earn 89 cents.

Matthew Lau’s research includes fiscal policy and employment regulations, and there are different views on this. He told The Epoch Times that the pay equality law will increase the cost of hiring women for federally regulated employers.

“For example, companies need to use resources to prove to the federal government that their female employees’ salaries are not too low compared to men’s,” said Liu, a part-time scholar at the Fraser Institute and a researcher at the Montreal Institute of Economics.

“Because of the increased costs of employers without any compensatory benefits, the result will be to prevent these employers from hiring women.”

Epoch Times Photos
Labor Minister Filomena Tassi was interviewed by the media after a cabinet meeting in Ottawa on March 10, 2020. (The Canadian Press/Adrian Wyld)

In a recent article, Liu argued that “the fallacy of the benefits of government regulation in protecting workers for decades still exists.” He mentioned the famous economist Milton Fried from the University of Chicago in 1978. In a public speech by Milton Friedman on the restoration of the American free market mechanism, a female audience questioned his opposition to the gender pay equality law in the Q&A session.

Friedman proposed three scenarios about how such laws would work for women workers.

“If women have higher skills than men in a certain job, or are considered higher, then the law is useless, because then they will be able to compete and earn the same income,” he said.

“If for whatever reason, their skills are poor… and you say that the only way to hire them is to pay the same salary, then you are denying that they are the only weapon they can use in combat.”

Friedman added that such laws also make it easier and cheaper for employers with gender discrimination to discriminate against women. “If you tell them that whether you hire women or men, you have to pay the same wages, here is Mr. Pig, who is sexist-hiring men instead of women, he doesn’t need any fees,” he said.

However, if women can freely compete and are willing to work at lower prices, Friedman continues, if sexist employers still decide to hire men at higher wages, then he will bear the cost of discrimination.

“When you try to obtain equal pay for equal work laws, what you do is reduce the cost to those who discriminate on irrelevant reasons to zero,” he said.

“You want him to pay the price to exercise his prejudice.”

Epoch Times Photos
Epoch Times Photos
Milton Friedman, winner of the 1976 Nobel Prize in Economics, delivered a speech at the White House event in Washington on May 9, 2002. (Getty Images/Alex Wong)

According to the Pay Fairness Act, which will be implemented in phases over the next three years, employers with up to 99 employees will be fined $30,000 and large companies will be fined $50,000 if they fail to comply with the regulations.

Tassi said in late July that the government had consulted experts on the issue of providing free sanitary products to female employees in the workplace, and was committed to advancing the plan after talking with labor and employer groups in summer and autumn.

The government first outlined the proposal in May 2019, but it was not until October last year when the government received the petition that labor officials decided to revisit the issue.

Liu said the policy would have the opposite result, similar to the gender pay equality law, because it would increase the cost of hiring women and would prevent employers from doing so.

“In the long run, any benefits women receive in terms of free hygiene products will be offset by the reduced willingness of federally regulated employers to provide them with jobs,” he said.

A briefing by labor officials to Tassi estimated that, based on a cost of nearly $60 per employee per year, and assuming a 50% adoption rate, providing free sanitary products would cost federally regulated employers more than $1 million.

A 100% utilization rate will bring the annual cost to nearly $2.3 million.

Liu believes that compared with government regulation, a highly competitive labor market can better protect employees from exploitation in the workplace.

“In a highly competitive market, employees who are not getting paid can go out to the door of competing companies. As long as the workers’ wages do not exceed their production output, competing companies will find it profitable to hire them.” He said.

“Economists generally believe that competition can effectively protect workers from being exploited by employers or underpaid.”

Documents from Canadian media

Isaac Teo

Isaac is a journalist based in Toronto.


This News Originally From – The Epoch Times

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