A Sad Day For Women In the Workforce

Obama sign into law the Lilly Ledbetter Fair Pay Restoration Act today, a law that reverses a Supreme Court decision that made it harder for women to sue for pay discrimination.

The big losers here are women because the law increases the probability of a law suit. Law suits cost money. Companies don't like to pay money when they don't need to. Thus, it is possible now for less qualified man to get a job over a women simply because there is a zero percent chance that he will sue for gender discrimination. Men 1, women 0. And, if both are equally qualified, forget about it.

The U.S. economy is another big loser as a result of this bill. Increasing the cost of labor for close to half of the work force is not a good thing. In fact, this bill makes layoffs more likely. Potential lawsuits increase the liability associated with a female employee and thus the margin declines. So, when little kids ask you, "where do layoffs come from?" You can say, among other things, the Lilly Ledbetter Fair Pay Restoration Act. (Just say Obama if there under 7)

Nothing here is open for dispute. Economic reality is fairly simple here. Proponents of this bill will say it is worth the cost because it makes everyone equal under the law.

False.

It gives women unequal protection. Consider this. If a man feels he is under paid he can a) ask for more money, b) find a new job where he gets paid what he things he's worth. A women now has a third option, suing. And, like stock options, legal options have value. Therefore, women have more value under the law. This value is not free. They now have additional costs. Companies like to cut costs, especially in a recession.