Why pay equalisation is bad news for women

In other words, pay equalisation in one industry - public schools - has a knock-on effect of increasing the number of male employees in another industry - private schools.

Therefore we can also suggest that a further effect is fewer higher paying jobs for female teachers in the private sector as they are facing increased competition from male teachers.

Look, we don't have enough space to cover off every scenario here. Naturally, there would also be circumstances where employers prefer to employ more women and fewer men, and are therefore able to set the equal pay level closer to the level acceptable by female employees rather than male employees.

But either way, the overall effect isn't a bumper payday for women employees.

The fact is, like every other attempt at market manipulation by governments, at the initial point of impact the appearance is that the policy has been successful. Yet as soon as you look at the collateral damage it becomes apparent that many others have suffered as a consequence.

Quite possibly, this could be the most unpopular article we've ever written for Money Morning - although that comment itself could be seen as patronising! - but the reality is that pay equalisation and paid maternity has to be paid for from somewhere.

One way is an attempt by businesses to charge higher prices. But this is difficult, as businesses would already charge higher prices if they thought they could get away with it. The fact businesses haven't raised their prices already suggests their ability to do so is limited.

Therefore the cost has to be born elsewhere. And the only other “elsewhere” is in job losses or a net cut in wages.

There's little doubt that pay equalisation and paid maternity leave won't create a new dawn for women in the workforce. Odds are it will do nothing more than lower the overall job opportunities for women in the higher paid jobs, and consequently lower the pay in the lower paid jobs.

We could be wrong, but it's worth thinking about.