2 kinds of wage discrimination
1. Unequal pay for the same work: Gunderson situation; men and women in the same establishment in
the same jobs
2. Unequal pay for different work, but with the same value for the organization and the economy
pay equity issue
* Second Step: Identifying what we are measuring
Job as the Unit of Analysis
1. What a job is paid: Job class; mix of jobs in the same pay structure, pay structures: set of wages
applied to a job e.g. starting wage-maximum wage
- Take the maximum wage: removes effects of individual employee characteristics, such as seniority
and years of work experience
2. The worth of the job to the organization: Job value
- Skills and education needed to do the job; responsibilities of the job; effort the job requires;
working conditions of the job
3. Gender of the job: the composition of women in the job, the percentage of women
Calculating Wage Bias
If men and women’s jobs are worth the same, are men and women paid the same?
Goal: Gender difference, for instance, having male-dominated and female-dominated fields with the same
job value, should not matter.
Wages = a + bV (job value) + bF (%female)
First, add gender composition, second, add job value. Hypothetically, gender composition should not
matter in the variance of wages when job value component is added.
The relationship between gender composition and wages should be non-linear.
- Maximum salary increased by .2 unit increase of gender composition entering male-dominated jobs.
(percent of women in the company)
- As women are added, and become female dominated jobs, it shows decreasing maximum salary
Male Wage-Line Test “Proportional value comparison
- Male jobs that are more valued increased maximum salary
- It’s worth the same between men and women, but male jobs are paid more than women’s
Pay equity legislation in Canada