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ECO336 Women in the US Economy Week 7 Political Responses to Labor Market Issues.

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Presentation on theme: "ECO336 Women in the US Economy Week 7 Political Responses to Labor Market Issues."— Presentation transcript:

1 ECO336 Women in the US Economy Week 7 Political Responses to Labor Market Issues

2 Outline of Presentation I. Why Government Intervention? What are the market failures? II. Remedies: Efficiency versus Equity? III. Civil Rights Legislation IV: Affirmative Action V: Family Friendly / Work-Life Balance VI. Evaluation of Affirmative Action VII Evaluation of Family Friendly / Work-Life Balance VIII: What did this presentation ignore?

3 Government Intervention in Free Markets Why? When? How Much? Now THAT Is the Question! Overview of Market Failures

4 Market Failure in Discrimination? Discrimination deriving from a source that is self- perpetuating, unless some new procedure forces change. Government intervention is needed as a way to break the vicious circle – the firms management is forced to institute selection procedures that short-circuit individual managers and workers prejudices.

5 Equity Versus Efficiency Tradeoffs Not Tradeoffs

6 Equal Opportunity versus Outcome Discussion

7 The First Step: Executive Order 8802 President Roosevelt, June 1941: the first time that the U.S. government has took action against discrimination in employment. The policy declared it to be the policy of the United States that there shall be no discrimination in the employment of workers in defense industries or government because of race, creed, color, or national origin. Govt Contracts Committee on Fair Employment Practice Note: this did not address employment discrimination against women, but it got the ball rolling.

8 The Second Step: Civil Rights Act 1964 Title VII... It shall be an unlawful employment practice for an employer(1) to fail or refuse to hire or discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individuals race, color, religion, sex, or national origin; or (2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individuals race, color, religion, sex, or national origin.

9 What that does: Allows an employer to bring a lawsuit and collect damages if the court decides discrimination has occurred. Class-action suits can be brought on behalf of a group of employees Equal Employment Opportunity Commission (EEOC): receives and investigates complaints of discrimination.

10 What Practices are Discriminatory? Title VII, like other laws passed by Congress, is broadly drafted. It has been left to the EEOC, subject to review by the courts, to define what behavior is discriminatory and what is not, and to set the nature of the evidence to be required as proof of discriminatory behavior. What follows is a list of factors that the courts have ultimately defined as discriminatory and otherwise okay business practices.

11 BFOQ Title VII prohibits employers from classifying people according to sex, race, religion, or national origin, and treating them differently for those reasons EXCEPT IN THIS CASE: The framers of the Act recognized that the sex, religion, or national origin (but not race) of employees might in special circumstances be a legitimate concern of an employer. Ex: a group of Catholic nuns running a religiously oriented girls school to hire men or non-Catholics as teachers.

12 What does BFOQ mean? The language of the Act gives an exception to the requirement of nondiscrimination in the instances where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise.

13 Landmark Case Claudine Cheatwood charged that her employer South Central Bell Telephone had discriminated against her by refusing to consider her or any women for the post of commercial representative. Main duties: visiting customers premises, dealing with financial matters, complaints and delinquencies. Sometimes collect coin boxes that could weigh up to 90 lbs.

14 Statistical Discrimination When an employer uses suppositions or even facts about womens average ability as compared to mens in coming to decisions about the hiring, assignment, or promotion of individual women. Consider candidates individually, rather than relying on its view that a group of people are on average less qualified for a job. People have the right to be considered on their own merits and not to be disadvantaged by their membership in a group that on average performs relatively poorly.

15 Pensions Some employers were running pension plans under which the monthly payments to retired women were as much as 20 percent lower than those to men with equivalent service, on the ground that women on average live longer than men.

16 Customer Preference Employers accused of discrimination have argued that they should have the right to exclude women from certain jobs on the grounds that their customers or their other employees would rather have men on the job. The courts have ruled consistently against such a connection.

17 Protective Legislation 19 th and early 20 th centuries, many of the states passed so- called protective laws which forbade women from working at a long list of jobs or working long hours at night. The principal supporters of laws restricting the use of womens labor were male-dominated labor unions who wanted to exclude womens competition for jobs that men wanted. Courts have concluded that such laws conflicted with the policy of nondiscrimination mandated by Title VII, and declared them all invalid.

18 Tests or Requirements for Employment The courts have severely limited the right of employers to make candidates pass tests or require them to have specified characteristics as a condition of employment. Unless a test is expressly and closely related to the duties of the job in question, an employer cannot use it if it has the effect of excluding a disproportionate number of women or black candidates (disparate impact). Ex: Duke Power Company – suit brought by a group of black workers. Cast doubt on height and weight requirements which had the effect of excluding women from male- dominated jobs such as that of a police officer.

19 Seniority Systems Seniority systems have caused women workers considerable disadvantage due to prior discrimination.

20 Sexiness On the Job The courts have generally been unsympathetic to employers (at least those not in the business of directly selling sex or entertainment) who have required that women employees look attractive and available to make customers, while making no such demands on males in similar jobs.

21 Pregnancy Historically: some employers routinely terminated any employee who became pregnant. Others have required prolonged leaves without pay, with little or no guarantee of reinstatement to a comparable job. Pregnant employees have been denied the use of paid sick leave during their period of disablement and of health insurance coverage for bills associated with the pregnancy. First legal attacks on employers pregnancy policies were brought by teachers in public schools who were being required to retire from the classroom upon discovery of their delicate condition.

22 Sexual and NonSexual Harrassment 1980 the EEOC issued a ruling declaring this to be a violation of Title VII.

23 Affirmative Action: The Current Order in Force Issued by President Lyndon Johnson in 1968: requires firms that sell any kind of product or service to the federal government to formulate and implement affirmative action plans for getting women and minority persons into jobs from which they have been excluded. This is essentially affirmative action as we know it.

24 What is Affirmative Action? Technique of personnel administration which creates a plan for integration – a plan that includes goals and timetables. Essentially firms need to compare their existing pool of employees (or applicants) the potential pool of qualified individuals. 4/5 Rule: A selection rate for any race, sex, or ethnic group which is less than four-fifths... Of the rate for the group with the highest rate will generally be regarded by the federal enforcement agencies as evidence of adverse impact.

25 Pros of AA Policies necessary to offset the systematic barriers that minorities and women continue to face in pursuing education and employment opportunities Here discrimination and pernicious stereotypes have persisted into the present while the cumulative effects of past discrimination also continue to hobble underrepresented groups in a variety of ways. AA is needed to equalize opportunity. The women and minorities who benefit are qualified. AA has positive externalities on everyone.

26 Cons of AA Discrimination (past or present) now plays a relatively small role in the determination of educational and employment differences across race or sex. Weaknesses in early family and school environments that continue to generate low skills among underrepresented minorities, which in turn generate lower representation and poorer performance in highly-paid jobs and university positions for these groups. AA is an attempt to equalize results or outcomes, not opportunity. Gets unqualified people into jobs, displaces qualified. Mismatches.

27 Family Friendly / Work-Life Balance See Case Study.

28 Evaluation of Affirmative Action Empoyment of black males grew about 5% faster at contractor establishments in the critical period of1974-80, while for females and black females the effects were somewhat more modest. Redistribution of employment occurs across a wide range of occupational categories, implying that the benefits of AA are widely spread among blacks and not just limited to more educated professionals and administrators. The share of total employment accounted for by white males was about 15-20% lower in AA establishments. One study found no evidence of weaker credentials or performance among females in the AA sector, relative to males within the same racial groups. Comparing minorities to whites: clear evidence of weaker educational credentials but relatively little evidence of weaker performance.

29 More Evaluation of AA Firms engaging in AA might offset the productivity shortfalls that would otherwise be expected among those hired from protected groups. Why?? 1. recruit more extensively Screen more intensively Provide more training after hiring Evaluate worker performance more carefully.

30 Evaluation of Family Friendly Cost-Benefit Analysis Bad for Women: Bergmann: Watch out For Family Friendly Policies Unfair to the Childless; See Elinor Burkett, the Baby Boon

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