2021 Leg Session, Ari Armstrong, Business/Economy, Exclusives, Gold Dome, Uncategorized

Armstrong: The unsurprising fallout from rotten ‘equal pay’ law

These days, to upend an expression of Calvin Coolidge, the business of America is obeying politicians and settling politically generated lawsuits. Or at least that is too often the case. Some of these command-and-control chickens came home to roost when some Coloradans noticed that a little-understood “equal pay” law cost them job opportunities.

The story begins a couple years ago with Senate Bill 19-085, the “Equal Pay for Equal Work Act.” With the onslaught of anti-business legislation coming out of the Democrat-controlled state legislature over the last three sessions, you may be forgiven if this particular bill escaped your notice at the time.

Coloradans need not apply

This June, the Wall Street Journal published an article about the bill that caused a stir among the political and media classes. The problem pertains to remote work. The Journal explains: “Big companies are hiring for remote positions that can be performed in any state across the U.S. except one: Colorado. At issue is a new Colorado law that requires companies with even a few employees in the state to disclose the expected salary or pay range for each open role they advertise, including remote positions.” Rather than post the salaries, some companies simply chose not to hire Coloradans. (See also Elizabeth Nolan Brown’s summary.)

The first step to overcoming political addiction is admitting you have a problem. But Democrats could never do that. Instead, some legislators want to nationalize the problem. The Colorado Sun reports about the law: “It’s not clear what changes may be in the works for the 2022 legislative session…One idea on the table: Seeing if Colorado’s congressional delegation can help since the problem is national.”

Another approach is to insist that Colorado can regulate businesses located in other states, a practice that rubs against the principles of American federalism. 9News reports, “Scott Moss, director of the Division of Labor Standards and Statistics at CDLE [the Colorado Department of Labor and Employment], said if there is just one person living in Colorado and working for the company at the time of the job posting, a salary range has to be included in a job opening. According to CDLE, remote gigs do not get a waiver.”

Garbage in, garbage out

A big problem is that the law is ambiguous about salary posting. Statute 8-5-201(2) says, “An employer shall disclose in each posting for each job opening the hourly or salary compensation, or a range of the hourly or salary compensation,” plus benefits. Okay, so an employer could post a range between the legal hourly minimum and a billion dollars, right? In fact, 9News reports, one company posted “a salary range for a manufacturing engineer job based in Colorado Springs—but only ranging from one cent.”

Not so fast. Statute 8-5-203(1) adds, “The [labor] director has the power to administer, carry out, and enforce all of the provisions of this part 2 and may promulgate rules for that purpose.”

So what are those rules? CDLE posted rules effective January 1 stating the following: “A posted compensation range may extend from the lowest to the highest pay the employer in good faith believes it might pay for the particular job, depending on the circumstances. An employer may ultimately pay more or less than the posted range, if the posted range was the employer’s good-faith and reasonable estimate of the range of possible compensation at the time of the posting.”

In other words, the state requires employers to post a salary range, but it won’t say what that range must be, except that it must be made in “good faith,” as judged by a bureaucrat after-the-fact. What could go wrong?

Legislative fraud

The devil is in the details, as it is with most legislation. But the so-called “Equal Pay for Equal Work Act” is rotten all the way through. Although the bill claims to promote “equal pay for equal work,” it effectively imposes bureaucratic micromanagement of employment practices to promote equal pay for unequal work.

The bill says “women in this state earn just 86 cents for every dollar men earn” and wishes for this “wage gap” to be “eliminated.” The bill implies, but does not state outright (because it would be a lie), that this gap is due to gender discrimination.

As Christina Hoff Sommers explained a few years ago, the gap “does not account for differences in occupations, positions, education, job tenure or hours worked per week. When such relevant factors are considered, the wage gap narrows to the point of vanishing.”

More recently, the Pew Research Center noted, “Much of this gap has been explained by measurable factors such as educational attainment, occupational segregation and work experience.” And motherhood can affect a woman’s career track, Pew notes. If you regard those differences as problems, the solution has to be something other than government-controlled labor contracts. Discrimination might play some residual role: “Other factors that are difficult to measure, including gender discrimination, may also contribute to the ongoing wage discrepancy,” Pew notes.

No matter how you slice it, for Colorado Democrats to cite the raw gender pay gap as though it resulted exclusively from gender discrimination is legislative fraud. That such a fundamentally dishonest and incompetently written law has harmful unintended consequences hardly is surprising.

What Colorado workers need fundamentally is not for bureaucrats to micromanage our labor negotiations—we’re competent adults, not infants who need our chins wiped—but for legislators to leave us the hell alone.

Ari Armstrong writes regularly for Complete Colorado and is the author of books about Ayn Rand, Harry Potter, and classical liberalism.  He can be reached at ari at ariarmstrong dot com.

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