If labor markets are efficient, will comparable worth create more or fewer jobs for women?

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pohnpei397 eNotes educator| Certified Educator

Since the answer to this could change depending on how one understands the question, let me specify how I understand the question.  To my understanding, this question means that the labor market is efficient now.  It is asking what will happen if we enact comparable worth legislation in a market that is already efficient.  If this is the case, such laws will not create more jobs for women.  Instead, they will mean that there will be fewer jobs for women.

If the market is efficient as it is today, women are currently paid according to their true worth.  If comparable worth legislation is enacted, it will essentially constitute a price floor that is like a minimum wage.  The price floor will be higher than the equilibrium price.

When a price floor is higher than the equilibrium price, a surplus comes to exist.  The price floor raises the price without actually changing supply or demand.  This means that it forces a move along the existing supply and demand curves.  There will then be a greater supply of women’s labor than the demand for it. 

Put in layman’s terms, firms will not want to pay women the higher wage.  Women will not bring as much value to the company as they take out of it at that wage.  Therefore, firms in general will hire fewer women.