Fine for gender pay gap will bring layoffs and distortions – 05/04/2021 – Helio Beltrão

Last week, the Chamber of Deputies approved urgency for the PL (bill) 1.558 / 2021, which establishes the increase of the fine to companies for possible gender pay gap (and for other salary disparities, based on age, color or gender). family situation). As a matter of urgency, the topic may at any time be put to a vote in plenary.

The Senate has already approved a fine of up to 500% of the salary difference over the entire period in which it has occurred. In Brasília, the Chamber is expected to confirm the penalty.

Contrary to the expectations of lawmakers, the fine will harm women and other groups it seeks to protect.

As Frédéric Bastiat said, a new legal rule continues to produce side effects even after the evident initial impact. The immediate effect is very visible, palpable; the rest need to be foreseen.

It is essential to understand the difference between “what is seen” and “what is not seen”. What we see is the favorable implication in the short term, the result of noble intentions declared by the legislators. What is not seen are the ultimate consequences, which are almost always opposite and destructive of the original purpose.

The ability to contemplate future developments is a privilege of good policy makers. But this faculty is not rewarded in politics, which encourages immediate populism.

Our Constitution provides for equal pay, that is, it establishes that everyone is governed by the same rule, regardless of gender, age, color, or marital status. Discrimination is prohibited.

However, according to the IBGE (Brazilian Institute of Geography and Statistics), women earn about 20% less than men in the aggregate average for all of Brazil, in all professions. For many, this would be the proof of the discrimination rooted in Brazilian society. It happens that, on average, women have shorter hours (approximately five hours less per week). If we adjust for the number of hours worked, the disparity drops to 8.5%.

The statistical adjustment does not stop there. Professions linked to the exact sciences have a lower participation of women (in engineering, women account for less than a quarter of the students) and the opposite occurs in the humanities.

As the salary of professions linked to the humanities is lower than that of the exact sciences, most of the 8.5% are explained.

Only a tiny residue remains, with plausible explanations. The 2019 “Child Penalties Across Countries” study shows that the trajectory of wages between genders in developed countries remains similar until the arrival of the first child.

Thereafter, a permanent reduction in the wages of women is established, reaching 26% in Sweden and 60% in Germany, presumably attributable to a different dedication to children. The Brazilian employer’s discrimination thesis does not thrive.

Therefore, it is to be expected that there will be occasional cases in which the hourly income disparity occurs, even for similar functions. Justice will attribute it to discrimination, but it can come from a difference, objective or subjective, of added value (individuals are never identical).

Knowing the risk of arbitrary fines (the disparity in a minimum wage over five years can lead to a fine of R $ 650,000), the employer, in the name of his survival, will be encouraged to fire the least productive employee – man or woman.

In the segments where women earn more — teachers and 223 other careers according to this leaf– men are more likely to be fired, and vice versa.

After all, why employ him / her with an income equal to the one that earns the most productive? It is more advantageous to hire a third party of the same gender as the most productive, for example, avoiding gender comparison. Or hire a third party as productive as.

The result of “what is not seen” is that in the end the most vulnerable will be harmed.

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