This is the Cato Daily Podcast for Saturday, June 1st, 2019.

I'm Caleb Brown.

Democratic US Senator and Presidential Hopeful Kamala Harris hopes to address the gender pay

gap by cracking down on different pay for identical job

titles in large firms.

Cato's Ryan Bourne looked over the proposal.

He argues that the idea misses the mark in terms of helping women and shows a lack of understanding of the tradeoffs made by both employers and workers.

Yeah, this is a curious proposal on one level because the statistic that everybody worries about when they talk about the gender pay gap is this

This evidence that full-time female workers are paid only across the whole economy about 80% of what full-time male workers make.

And that doesn't account for any types of factors, what jobs or occupations people choose to go into,

their degree of experience, time out of the labour force or performance or whatever.

So Kamala Harris is using this hook, but what her legislation really is about is trying to police at the elbow companies to eliminate differentials in the same pay for the same work.

So it's really equal pay for equal work legislation that

changes the onus and puts the onus on companies to show actively that

they're not discriminating against women. And the way that she proposes to do this is that any company with a hundred or more employees

would have to report their pay differential between men and women controlling for differences in job titles, experience of workers and performance.

Now that's all very, very difficult to measure some of those things and leaves a lot of room for creative accounting for those

factors. But if the firms can't actively show that men and women are being paid the same after factoring those controls in, then

there's the risk of being fined 1% of their profits for every 1% gap in pay.

So really I think this is a kind of heavy-handed measure that is trying to flip the

owners onto companies and kind of strong-arm them into making sure that they are paying equally for what's perceived to be equal work

when those factors are controlled for.

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