Robert L. Nelson

Markets in Hierarchies: Organizational and Market Influences on Gender Inequality in a State Pay System

A pivotal issue in sociological theories of labor markets, as well as legal and policy debates on pay equity, is the relative importance of market and organizational forces in determining pay differences between jobs held predominantly by men and those held predominantly by women. This article develops two models of the market organization relationship-an administered-efficiency model and a bureaucratic-politics model. Quantitative analyses of individual and job-level data in a state government pay system indicate that the administered efficiency model does not adequately explain malefemale earnings differences. Documentary, testimonial, and interview data strongly suggest the significance of bureaucratic politics in the pay-determination process. We conclude that market forces influence wage rates but are heavily mediated by organizational factors unrelated to efficiency considerations in the type of organization studied here.

Law, Markets, and the Institutional Construction of Gender Inequality in Pay

1 The pay equity movement won its largest legal victory in 1983, when Judge Jack Tanner of the federal District Court of Western Washington found that the State of Washington had discriminated against workers in predominantly female jobs and awarded the plaintiffs a

Sociological Justice, by Donald Black

400 million judgment. The AFSCME decision (so named because the American Federation of State, County, and Municipal Employees brought the lawsuit) catapulted the pay equity issue into instant prominence. In its immediate aftermath, the number of states conducting pay equity studies doubled to thirty-four, and the number of articles on pay equity in leading newspapers quadrupled (McCann 1994, 54–59). The victory was shortlived, however. In 1985, the Ninth Circuit Court of Appeals reversed the AFSCME decision. Then judge, now justice, Anthony Kennedy pronounced, “Neither law nor logic deems the free market a suspect enterprise. . . . Title VII does not obligate [the State of Washington] to eliminate an economic inequality it did not create” (AFSCME, 1407). According to Justice Kennedy, the plaintiffs not only lacked a legal basis for redress, but the very nature of their thinking – their logic – was wrong. The Ninth Circuit authoritatively denounced plaintiffs’ theory of gender-based wage inequality as inconsistent with a core institution of American society – the free market. The reversal of the AFSCME decision had a devastating effect on the pay equity movement. Other courts followed the AFSCME precedent in rejecting similar claims. Reform activity in states and municipalities slowed to a trickle. Media coverage of pay equity matters fell by more than one-half (McCann 1994, 54–59). Some wage reforms were won through state legislation and collective bargaining, but even these garnered only mixed results. The conventional view among the press, policy makers, and academics was that comparable worth was essentially dead