Equal Pay for Equal Work

Everyone, without discrimination, has the right to equal pay for equal work.

Universal Declaration of Human Rights, article 23(4)

This idea is hard to argue with.  It appeals to our sense of fairness. It appears in the  Universal Declaration of Human Rights and in other human rights treaties, as well as in international labour conventions.  Its history and elaboration is an achievement of the women’s movement.  The principle is not however limited to gender inequality.

Like other human rights principles, its realisation is a work in progress.  Country after country has entrenched the principle of equal pay for equal work in national laws. Yet on a global scale,  equal pay for equal work does not exist – whether in terms of gender or in other senses.  Such national laws do not concern themselves with wage levels ‘beyond the border’.

Should a bus driver, doctor, IT professional, shop assistant or any other worker be expected to earn less when they perform the same work simply because they happen to be performing that work in a different part of the planet?  This is the reality, even if we take into account differences in cost of living.  A bus driver in Australia earns (on a purchasing power parity basis) ten times as much as a bus driver in Peru.[1]   A doctor in the United States earns ten times as much as a doctor in Romania, again on a PPP basis.[2]  Computer programmers seem to do a little better with programmers in Peru making a quarter of what programmers in the United States make – nonetheless inequity persists.[3]

The reality of wage inequality is one that lends itself to global injustice.  Shoes bought in one part of the world for the price of an hour or two of work, will net the worker who creates it a wage that is barely sufficient for a life of dignity.

In a demonstration of the effect of variation in salaries across national boundaries, Ashenfelter and Juradja have carried out an empirical study of how affordable a Big Mac is to the worker producing it across many countries.  As they point out, we know because of the standardization of the McDonald business process and products across borders, that the work performed by these workers is virtually identical everywhere.  Thus wage variance cannot be explained away as the result of differences in the value of the work performed.

Comparing the salaries of these workers in terms of the price they pay locally for a Big Mac (an internationally standardized product) also provides a measure of purchasing power parity.

Ashenfelter and Juradja conclude:

The results of our survey indicate there are extraordinarily large differences in the wage rates of workers doing identical jobs in countries at different levels of economic development.   Loosely speaking, base wage rates – whether measured in US dollars or Big Macs – are quite similar among Western European countries, Japan and the US.   However, wage rates in these countries, are three to five times higher than in Eastern Europe,  Korea or Brazil and an order of magnitude higher than they are in China, India or Colombia. “

One use they make of their findings is to compare their findings with other measures of wage variation across countries, finding a high level of correlation.  This allows them to challenge suggestions that difference in wages across countries can be explained in terms of difference in the quality of the work being done.

In graphic terms, a McDonald’s cashier or crew member’s wages in India amount to 0.23 Big Macs per hour,  whereas in Japan the same worker makes 3.04 Big Macs per hour.

If we take into account international trade flows it becomes even more obvious that such wage disparities are a matter of global interest and concern.   Goods and services cross international boundaries.  Individuals in one country become the beneficiaries of low wages in another – or suffer exploitation in order that goods and services be provided as cheaply as possible to another part of the world.  Awareness of the conditions under which goods or services are produced does not always flow so easily although it is a matter of increasing civil society action, as so much of what is branded and sold in countries where wages are higher, is produced by workers being paid an unequal and sometimes inadequate wage in countries where wages are lower.

Organisations such as the Fair Trade Association promote ‘fair’ pricing of goods sourced from workers in developing countries, and are able to find willing consumers prepared to pay a premium for the assurance that workers and producers are receiving a ‘fair’ return – enough to live a decent life.  Notably, even such organisations do not champion the standard established by human rights instruments: equal pay for equal work.

Accepting that some workers should be paid less (in real terms) for the same work simply as the result of an accident of birth (where they live) is plainly unjust.  The more so, when this inequality contributes to widespread and chronic poverty for billions.

Image Source:  http://www.freefoto.com/preview/04-28-41/Pile-of-Money