A New Year’s Present for California Trial Lawyers

As businesses and people flee from California to escape the notoriously inhospitable business environment and the high costs of living, the state’s government is moving, based on dubious statistics, to enact another impossibly broad, costly regulation: a “Fair Pay Act” requiring businesses to prove that “they pay both genders equally for ‘substantially similar’ work.” The WSJ:

The rules have spurred employers ​to reassess the way they pay and classify workers. Some are puzzling over what “similar” means in legal terms, such as whether a marketing manager and a supply-chain manager have roughly equivalent jobs. Others are conducting complex audits of their payrolls, seeking to uncover any disparities […]

The law leaves open the question of which jobs can be considered similar. Is a women’s soccer coach similar to a men’s soccer coach? An assistant manager of HR, and one in accounting?

“It will take several court decisions or agency decisions to work out how broadly the term ‘similar’ will be defined,” said Ms. West.

As Douglas Levene points out, this policy essentially amounts to a “gift” to the state’s trial lawyers. Employers seem not fully to know what “substantially similar” means, and companies are likely to face years of litigation before the law is clarified. Until then, many businesses are likely to take costly measures (insurance, legal fees, internal audits, and compensation changes) to protect themselves. The law may put pressure on some businesses—especially small businesses, which are less able to afford these kinds of measures—to cut back on hiring, or else leave the state entirely.

Moreover, there is not good evidence that women are currently being systematically and significantly under-compensated for doing the same or similar work as men—and the law makes no sense without such evidence. The idea of a serious “gender wage gap,” as it is presented by liberal activists, is somewhere between a gross misrepresentation and a “lie,” to use a word from the headline of a Hanna Rosin piece in Slate on the topic. Women do earn less money than men, but that’s largely because they work different jobs, in different industries, and for fewer hours. As Christina Hoff Sommers has written, once all factors are controlled for, “the wage gap narrows to the point of vanishing.”

Blue cities and states are already facing large and growing challenges bringing in and keeping businesses, attracting workers, and, more broadly, sustaining their expensive governance models. The last thing they need is for their economies to be undermined further by ham-fisted new regulations pushed by practitioners of know-nothing gender identity politics.

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