Pay equity, the "free" market and state intervention

Abstract

A number of publications opposing pay equity published by the Business Round Table, the Employers' Federation and the Centre for Independent Studies between 1988 and 1990 have opposed pay equity. The ideas in these publications are shared by many neo-classical economists who advocate the operation of a "free" labour market with mininial intervention by the State or unions. These arguments are currently being used to justify the repeal of pay equity legislation. This article provides an empirical evaluation of claims that a deregulated labour market will be to the advantage of ufomen workers and that pay equity policies benefit only the most skilled women in paid work. It demonstrates that state intervention in the labour market and the unionisation of won1en in employment are associated with reductions in the earnings gap between women and men.