Best columns: Business
How not to fix the pay gap
Catherine Rampell The Washington Post
A new idea for closing the gender wage gap seems sure to backfire, said Catherine Rampell. Last month, Massachusetts barred employers from asking job applicants about their salary history; Democrats in Congress hope to introduce similar national legislation. Because women consistently earn less than men, the thinking goes, using past salaries as a baseline for a new offer perpetuates inequity. But once “you think it through, this logic starts to unravel.” First, even brand-new workers face a gender gap in pay. Whether this is caused by discrimination or women’s reluctance to negotiate isn’t clear, but it seems unlikely those factors would disappear “in later job hopping.”
Second, previous attempts to prohibit employers from asking certain questions have hurt the same applicants they were intended to protect. Studies show that laws making it illegal to ask if applicants have a criminal record don’t help ex-offenders get work, and instead reduce employment for black and Hispanic men without records because employers make “pernicious assumptions” based on race. That’s illegal, of course, but hard to police. It’s easy to imagine something similar happening with salary, with companies lowballing female applicants. If policymakers really want to close the wage gap, “they should focus on making salary information more transparent, not less.”
Say goodbye to Asian sweatshops
“For 30 years, the word sweatshop has conjured up a very specific image: low-wage Asian workers making branded clothes in crowded, unsafe factories for consumers overseas,” said Adam Minter. But thanks to technology, “the heyday of the Asian sweatshop is coming to an end.” More than two-thirds of Southeast Asia’s 9.2 million textile and footwear jobs are threatened by automation, according to the International Labor Organization. Rising wages are a major factor. Efforts by local labor unions and higher wages in China have repeatedly pushed up pay in the apparel industry in recent years. In Cambodia, the average textile worker’s pay rose last year from $145 a month to $175. In response, some manufacturers have “simply closed up shop”; others try to maintain their margins with machines. The most common new device handles the staple task of cutting fabric. It takes about 18 months for a factory owner to break even on such an investment, which “pretty much ensures that the days of low-wage workers hand-cutting fabric are dwindling.” Emerging technologies like 3-D printing may even prompt Western firms to eliminate overseas factories altogether, putting millions out of work. “That’s no reason to mourn the passing of sweatshops.” But we should pause to wonder what will happen to the workers when these factories are gone.