12 - Wednesday, October 27, 1999 — North Shore News

Public sect

Patrick Basham

Fraser Institute Coltumn ist
PAY equity is back in
the news with the Oct.
19 Federal Court of
Canada decision to
uphold the 1998
Canadian Human
Rights Tribunal decision
which ordered the gov-
ernment to pay federal
workers almost 13 years
of back pay.

The tribunal's original rul-
ing in favour of equal pay for
work of equal value affects
almiost 200,000 current and
former federal public servants.
This decision will cost taxpay-

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ers in excess of $7 billion in
compensatory back pay, for an
average pay-out of $35,000
per clerical worker.

The ruling ignores both
the lack of an economic struc-
ture to determine public see-
tor wages and the impossibility
of fairly and efficiently per-
forming any alternative kind of
pay level calculation.

The ruling also neglects
the critical, though rarely
articulated, distinction

im.

benveen equal pay for equal
work and equal pay for work
of equal value (so-called pay
equity). From time to time the
former, while a sintple con-
cept, may prove problematic;
the latter is simply unattain-
able.

In most cases, determining
equal pay tor equal work is a
relatively straightlorward mat-
ter. On occasion, however, the
specific dynamics of the labour
market prove irresistibic. Tr has
proven, for example, far hard-
er to recruit female guards in
female penitentiaries than it
has ze recruit male guards in
mate penitentiaries. Therefore,
respective prison authorities
may pay female guards more
chan male guards to perform
the same tasks simply because

rt workers more equal

the supply of willing female
gatekeepers is smaller.

The true value of a job is
determined by whatever an
employer is willing te pay and
an emplovee is willing to
accept. By contrast, che con-
cept of the relative value ofa
job vis-a-vis another job is far
trickier.

Putting, aside all reasonable
reservations concerning cither
the ethicality or efticacy of
such an approach to wage set-
ting, the methodology
employed in dese work of
equal value calculations is, to
putit charitably, horly dispur-
ed. As labour economist
Morley Gunderson has writ-
ten, “While comparisons
across guite dissimilar jobs are
possible in theory ... the

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results of evaluation proce-
dures become more tenuous
the more dissimilar the jobs.”

Unsurprisingly, then, the
federal Treasury Board and
the Public Servi ¢ Alliance of
Canada spent six years arguing
betore the Canadian Human
Rights Tribunal as to the
respective value of each public
service job. Under the highly
arbitrary point system eventu-
ally employed by the tribunal,
public service jobs were classi-
fied according to four official
categories: skill, effort, respon-
sibility, and working condi-
tions. Using these criteria,
each job was assigned a certain
number of points purportedly
indicating the value of the job.
By this method, for example, a
typist was magically judged to
be of equal value toa
Canadian Forces sailor.

Given the Hogic of such
Wage-setting-by-burcaucratic-
infighting, the marketplace
remains the only practical
arbiter of whas is equal value.
Competition between alterna-
tive suppliers and demanders
of labour should be the sole
determining variable in what
jobs are worth. After all, a
ticdgling novelist may expend
as much, if not more, time
and effort than does John
Grisham producing a manu-
script, but is the former's work
of equal value to the latrer’s?
Only the pablishing, market-
place is in a position to deter-
mine that. Therefore, the only
appropriate way Co sort out
public sector pay issues is
througa the use of compara-

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than others

bility to jobs in the private sec-
tor. As is the case in the U.K,
public sector wages should be
set and adjusted on the hasis
ef comparability wich private
sector wage levels. In this
manner, the public service will
maintain and recruit employ-
ces of comparable skill and
experience to their private sec-
tor counterparts.

Beyond this comparability
wage-setting role, there’s no
logical role for the govern-
ment to internally and arbi-
trariiy determine that certain
jobs are or are aut of equal
value to others. Such action
would only be appropriate if
public sector salaries and
wages diverged widely from
those in the private sector.

Even under such condi-
uurs it would be necessary ta
take into account that the
conditions of public sector
employment aren't the same
as the conditions of private
sector employment: greater
job tenure and more extensive
benefits are only avo of the
advantages of public sector
employment. :

Coming on the heels of
fast week’s Throne Speech,
complete with expansion of
parental leave, $7 billion is
starting to look less like com-
pensation and more like a
down-payment on another |
unaccessary and intrusive
picce of social engincering.

— latrick Basham is divcc-
tor of the Social. Affairs Centre |
at The Fraser Institute, a
Vancouver-based economic.
rescarch organization. ;

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