Wednesday, April 25, 2007

Is Tammy Baldwin too late?

What is the rationale for a federal law , sponsored by Tammy Baldwin (D-Wis.) and others, prohibiting discrimination in employment on the basis of sexual orientation ? Its advocates concede that the private sector has largely adopted nondiscriminatory policies.

In a moment of candor, Barney Frank allows that "corporations recognize the value of diversity, the need to get the best people and the idea that a welcoming environment is good for business. "

Precisely. Economist Gary Becker won the Nobel Prize, in part, for work suggesting that, under certain circumstances, the free market will tend to drive out irrational discrimination. If I don't hire the most talented people because they are black or gay or born-again, my competitor will and, ultimately, make me abandon my discriminatory ways or get my clock cleaned in the market place.

This suggests that anti-discrimination laws are less critical when we think they are. Although they may re-inforce social rejection of discrimination, it is the self-interest of employers that is far more critical.

I have always thought that Becker's theory fails (and he doesn't think it applies in all cases) when discriminatory ideas are socially pervasive, i.e., when few or no competitors would choose not to discriminate or when the market may have a taste for discrimination that makes it rational for me not to hire employees that my customers may not like.

But, ironically, those are the circumstances in which a discrimination law is unlikely to be passed.

I think that's where we are with employment discrimination against gays and lesbians. I don't contend that it never happens but the powerful social and economic forces allied against such discrimination may make the passage of a law symbolic at best. It won't stop much additional discrimination.

Of course that doesn't mean that it shouldn't be passed. As I argued during the debate on the marriage amendment, the symbolic uses of the law is important and to say it won't stop much additional discrimination is not to say that it won't stop any.

But there is a cost to such laws. When my client tells me that it wishes to fire someone, my first question is whether that person is in a protected class. I ask this, not because I fear that they are engaged in discrimination (HR professionals are very unlikely to do so), but because it raises the ante. We have to have a "better" case than we otherwise would need. While that might sound harmless ("why shouldn't you have to have a good case to fire someone"), the law does not generally require a "reason" for the dismissal (or the resignation) of employees. When it does, a business has to factor in the probability that it will not be able to convince a judge or jury of the reason for its action.

This imposes a cost on business. Maybe the cost is worth it, but it won't do to pretend that it's free.

The other issue, of course, is whether such a law would require employers to extend domestic partner benefits. That has not generally been the case, but it would be foolish not to admit the possibility.

9 comments:

Anonymous said...

Responding to what you wrote and not knowing the proposed law, it sounds like the same type of law that was passed in Wisconsin under Governor Lucy.

Shortly after its passage, homosexual groups tried to force Christian groups to hire homosexuals, ie. Rawhide Boys Ranch.

I think that if the Republicans also screw this up that they can kiss the conservative vote goodbye. Conservatives on both sides are getting tired of not being represented.

Todd said...

Anony, The Wisconsin version was actually passed under Governor Dreyfus. The federal version is sponsored by Republicans as well as Tammy Baldwin and several Democrats.

Anonymous said...

todd - as soon as I hit publish I realized that I wrote Lucy rather than Dreyfus, but thanks.

you make it sound that this is a done deal. Is that correct?

Anonymous said...

Rick - You are probably aware that some companies in San Francisco require other companies (from anywhere) that want to do business with them must provide proof that they provide domestic partner benefits or they will not do business with them.

Isn't this also a form of discrimination that the goverment should address?

Anonymous said...

The recent reports of education and income of the largest identifiable group of residents of Wisconsin -- a majority of residents of Wisconsin -- conclude that discrimination continues to work against them, and thus it works against Wisconsin's economy.

That is, Wisconsin's women. Last week's reports show that this state continues to be below the national norm in education levels of women. And last week's report shows that, controlling for all other factors, discrimination continues to impede the income levels of even the college-educated among them.

And those are the ones who stay here. The brain drain continues, with a higher proportion of college-educated women leaving this state than is seen in most other states. (That shows how smart they are, as they didn't need studies to tell them they could make more elsewhere.) And the reports show that the longer that college-educated women stay here, the more they lose compared to their comparates elsewhere.

So even gender discrimination continues to cost our state's economy and productivity -- and cost us state income tax revenue.

In sum, this may argue for no more laws, since even the laws we have against discrimination against the majority of our population are not working in Wisconsin.

On the other hand, this also may argue for the need for such laws -- AND for enforcement of them.

But above all, it ought to be a wake-up call for Wisconsin. When we're not making the most of the majority of our population, no wonder our state economy continues to fall behind -- especially behind surrounding states, when our college graduates can just cross a border to do a lot better in a less backward state.

Anonymous said...

Anony - I'm not sure it can be said that woman are being discriminated against in Wisconsin according to that report.

My two daughters and most of their friends were hired immediatedly after collage graduation and at good income levels. It appeared to them that girls with lower grade point averages weren't hired.

Employers want to get as much for their money as possible and for many jobs that requires both a degree with a good grade point average.

Regarding the bill Rick is discussing, I hired and managed many people for over three decades and never once asked and never once was told about an employees sexual preference. The only reason that I can see that they want this bill passed is to further their protected class for advantages that others do not have.

I only wanted to know if someone could do the job and that should be the only thing that matters concerning employment.

Anonymous said...

That you were one of the good employers, and that your daughter and her friends found good employers, are good things I'm glad to hear about. We always need some at the higher end of pay levels to make our medians look a bit better.

The statistical studies were about more employers and far more women, though -- no doubt including at least a few more who were good students -- who ended up on the other side of the medians.

And do you know what your daughter's male classmates are making at the start of their careers? More than your daughter, based on the stats which show that women one year out of college make 80 percent of what their male classmates make here.

And you can't know what they'll be making in ten years -- and what your daughter will be making then. But if Wisconsin doesn't change, her women classmates may be making less than 70 percent of what her male classmates will be making.

And think of how much more we'll all have to make up in income taxes for how much less they'll be making.

I hope Wisconsin changes in time for her gender and others of other gender orientations. We're spending a lot to put them through college and not reaping the benefits, compared to better gender pay balance in almost half of the states -- and especially in all of our surrounding states.

No wonder our state economy has problems, with these stats on most of its population.

Anonymous said...

Anony - I don't want you to think that I don't want women to be paid fairly because I do.

Until Wisconsin starts bringing more jobs into the state, business is only going to pay what they have to.

I also think that women are feriously competitive and they hold down other women in the work force. You rarely ever hear of a woman that likes to work for another woman.

Anonymous said...

I hope your daughter works with nicer women than you know! You must be in one mean field.

I always have worked -- in several fields now -- for and with some women who always made sure to mentor other women, or I wouldn't be where I am . . . paying my dues by mentoring other women, too.

I've seen far more discrimination against women by men -- but I've also good men, too. There are always some rotten ones of any gender (or gender orientation), of course. I hope that your daughter learns how to spot them, too.