November 17, 2010 9:45AM

Lame‐​Duck Menace: The Paycheck Fairness Act

At Compensation Cafe, Stephanie Thomas explores some of the "nonsensical implications" of a misnamed bill that's a high Obama administration priority in the lame duck session:

Let's assume that John and Jane have identical characteristics (education, work experience, etc.) except for gender. ABC Company makes offers of employment to John and Jane on the same day, for the same position, for the same starting salary: $45,000. Jane accepts the offer, but John negotiates the salary, and ends up with $50,000. Under the current equal pay laws, there's no problem; John is earning more because he negotiated and Jane did not. Makes sense, right? Under the Paycheck Fairness Act, ABC Company would be guilty of gender discrimination.

Here's another example. Assume that Sam and Sally have the same education, work experience, etc., and are both hired by WidgetCo on the same day. WidgetCo sets Sam and Sally's starting salary at $2,500 more than they were making at their previous job. Sam was earning $37,500 at his previous job, and Sally was earning $36,000; their starting salaries at WidgetCo are $40,000 and $38,500. Seems reasonable, doesn't it? Under the Paycheck Fairness Act, WidgetCo would be guilty of gender discrimination.

One final example. Assume that Brad and Bridget both work for Alpha Inc., have the same job title, same level of responsibility, etc., and they are both earning $100,000 per year. Brad asks for a 5% raise, but Bridget doesn't ask for a raise. Brad gets the raise and ends up earning more than Bridget. Again, no problems here, right? Wrong - under the Paycheck Fairness Act, Alpha Inc. would be guilty of gender discrimination.

"Making matters worse, under the new law, damage awards would be uncapped, and class-action procedures loosened. Bring on the trial lawyers," notes a Chicago Tribune editorial. For more on this very bad bill, check out the papers and presentations from a panel last week put on by our friends at the Hudson Institute. Earlier here and, at Overlawyered, here, here, etc.

September 13, 2010 12:08PM

ObamaCare’s Threat to Free Speech

On Friday, I blogged about HHS Secretary Kathleen Sebelius' letter to the health insurance lobby, in which she attempts to stifle political speech by using the new powers that ObamaCare grants her to threaten health insurance companies that claim ObamaCare's coverage mandates are one cause behind rising premiums.  (Never mind that the insurers' estimates -- which project that ObamaCare will increase premiums in 2011 by as much as 9 percent -- are in line with those put forward by HHS.)

Here's a smattering of reactions from others.

  • The Wall Street Journal: "The Health and Human Services secretary...warned that 'there will be zero tolerance for this type of misinformation and unjustified rate increases.'   Zero tolerance for expressing an opinion, or offering an explanation to policyholders? They're more subtle than this in Caracas."
  • Chicago Tribune: "President Obama's health care reform plan, enacted in March, is not terribly popular with the American people...The administration can't tell the public to stop grousing. It can, however, try to silence health insurers who have the nerve to say out loud what basic economic theory indicates...Apparently, harsh punishment is in store for anyone who refuses to parrot the administration line. But there is every reason to think this alleged libel is true."
  • Tyler Cowen: "Nowhere is it stated that these rate hikes are against the law (even if you think they should be), nor can this 'misinformation' be against the law...[The letter] is worse than I had been expecting."
  • Ed Morrissey: "Rarely have we heard a Cabinet official tell Americans to stay out of political debates at the risk of losing their businesses. It points out the danger in having government run industries and holding a position where politicians can actually destroy a business out of spite."
  • Michael Barone: "Sebelius is threatening to put health insurers out of business in a substantial portion of the market if they state that Obamacare is boosting their costs...The threat to use government regulation to destroy or harm someone's business because they disagree with government officials is thuggery. Like the Obama administration's transfer of money from Chrysler bondholders to its political allies in the United Auto Workers, it is a form of gangster government."
  • Eugene Volokh: "even if such action would be constitutionally permissible, it would be quite troubling, as would threats that seem to hint as such action: It would involve the Administration’s deliberately trying to suppress criticism of its policies, under a 'misinformation' standard that sounds highly subjective and politically contestable. (Consider [Sebelius'] reference 'to our analysis and those of some industry and academic experts' — what about the analysis of other industry and academic experts?) Perhaps I’m missing some important context here. But my first reaction is that this is ominous behavior on the Administration’s part, and seems to have both the intent and effect of suppressing criticism of the Administration’s policies — including criticism that simply expresses opinions the Administration dislikes, and makes estimates that it disagrees with, and not just criticism that contains objectively demonstrable 'misinformation.'"

In The Wall Street Journal, economist Russ Roberts recently explained one of the main themes of Friedrich Hayek's The Road to Serfdom:

When the state has the final say on the economy, the political opposition needs the permission of the state to act, speak, and write. Economic control becomes political control.

One need not agree with all of Hayek's conclusions to see how ObamaCare is threatening political freedom.