Against Equal value

 The sources emphasize that the ‘equal value’ pay rules have created a financial crisis of colossal scale in Britain, particularly for local governments and major private retailers, prompting a serious critique regarding the economic viability and philosophical underpinnings of the law.

Scale and Financial Impact of Equal Value Cases

The author argues that the "sheer scale" of these equal value cases and the resulting chaos are not yet fully appreciated by most British people. The ultimate value of the total liabilities across both the public and private sectors "could easily end up in eleven digits".

Impact on Local Authorities (Public Sector)

Claims against local authorities are generally further along and have already resulted in devastating financial consequences, "hobbling some of Britain’s most important cities for well over a decade".

• Birmingham: The city will likely end up paying out at least £1.3bn, possibly more. This amount is cited as the underlying cause of the strikes and the "billion-pound payouts that have bankrupted Birmingham". To cope, the city council sold two exhibition centres and two arenas at fire-sale prices in 2015, council taxes have doubled, public services have been cut, and another round of asset sales is currently underway.
• Glasgow: The city was hit by two large tranches of equal-value claims: one for approximately £500m in 2019 and a second for approximately £800m in 2023. These payouts were financed by selling and leasing back landmark buildings, including the city council chambers and the main art museum, alongside wider cutbacks and a significant lift to council taxes.
• Other Authorities: A case in Sheffield is ongoing and "could well cost hundreds of millions". North Lanarkshire has paid out about £100m. Claims worth tens of millions or more have also been filed in Cumbria, Dumfries and Galloway, and Newcastle, with ongoing cases in Sunderland, Fife, Brighton and Hove, and Dundee.

When cash-strapped councils lose, they often prefer to pull down the pay of the better-paid role, rather than raise the pay of the worse-paid one. This causes retention issues, and attempts to bridge the pay gap, such as Birmingham’s use of one-off bonuses, can invite new equal value claims, forcing even bigger payouts.

Impact on the Private Sector

In the private sector, 70% of British grocery chains by market share are facing equal value claims.

• Major Retailers: Asda, Tesco, Morrison’s, and Sainsbury’s could each be "on the hook for a billion or more in back-pay".
• Asda: The Asda equal pay judgment is "trundling toward a £1.2bn payout". The resolution of these cases will also result in a "hefty boost to their future wage bill," which, for low-margin businesses like supermarkets, will flow directly into consumer prices.
• Other Businesses: Smaller cases are also ongoing with retailers like Next and Boots.

Critique of 'Equal Value' Pay Rules

The sheer scale of the financial damage necessitates a serious interrogation of whether "the chaos has been worth it". The critique is multifaceted, focusing on the law's flawed economic logic, legal mechanisms, and practical implementation:

1. Arbitrary and Subjective Judicial Central Planning: The law is criticized because it penalizes employers for pay disparities between "wildly different roles" (like cleaners and binmen), based on whether judges can be "sold on the idea that the work was of 'equal value'," ignoring whether the market concurs.
   • The assessment process, such as the eleven-factor model used in the Asda case, is described as a "bizarre sort of judicial central planning". Despite the appearance of rigor, the logic is considered "flim-flam" and "wildly subjective," as decisions are sensitive to difficult-to-justify assumptions about how to weigh categories like "responsibility for assets" versus "physical skills".
2. The "Labour Theory of Value" Incoherence: A fundamental philosophical critique is leveled against the idea of 'value' underpinning the framework. Since these claims argue that market wages are incorrect, they require a non-monetary basis for comparison, which critics argue quickly leads to a "fairly dodgy sort of Marxian ‘labour theory of value’ logic". The idea that wages should reflect something deeper than an employer’s willingness to pay and an employee’s willingness to accept is considered a "messy can of worms".
3. Crippling Financial Mechanism: Six-Year Back-Pay: One primary reason why the financial impact in Britain has been so "crippling" is the generous six-year back-pay window available to victors. This legal feature was added in the 1980s, but became especially lucrative in the 2000s after a European Court of Justice ruling allowed the six-year claim window. An alternative approach would be to focus only on changing future pay, rather than "saddling public bodies with vast liabilities for historic disparities".
4. The "Shadow Payroll Tax": To mitigate the risk of these massive lawsuits, employers are sometimes advised to proactively run job evaluations (JEs). However, the expense of running and maintaining these audits functions as a "de facto payroll tax on employers," with receipts going to HR consultants and law firms instead of public services. A full, bespoke evaluation for a large employer could cost low single-digit millions initially, with hundreds of thousands in ongoing annual costs.

To summarize the enormous financial impact, the reliance on a six-year back-pay window combined with judicial assessments of "equal value" for disparate roles—a metric divorced from market pricing—acts like a catastrophic financial earthquake, where historical differences in pay, rather than being addressed prospectively, unleash retroactive bills that demolish city finances and threaten private sector stability.

The sources thoroughly define the concept of 'equal value' by contrasting it with traditional equal pay, detailing the mechanisms used to assess it, and launching a powerful critique based on its perceived philosophical incoherence and resulting judicial subjectivity.

Defining the 'Equal Value' Concept

The 'equal value' principle is distinguished from standard equal pay cases, which typically involve a person being paid less than a coworker despite doing "near-identical work" due to a protected characteristic.

• Focus on Categories, Not Individuals: 'Equal value' looks across entire professions or categories of jobs, rather than person-to-person comparisons.
• Cross-Sector Comparison: It addresses pay discrimination when a judge determines that work done by a female-heavy category (e.g., nurses, cleaners, teachers) is of the same value as a male-heavy category (e.g., builders, factory workers, binmen), but the former is paid less. For example, the law permits comparisons between cleaners and binmen, or warehouse stockers and shopworkers.
• Irrelevance of Market Rate and Intent: Winning these cases does not require proving "sexist intent". Critically, the fact that an employer's payscales track the "going market rate for those jobs" is not an adequate defence. Instead, everything "hinges on whether judges decide that two roles are of equal value".

The idea of equal value has a long history in Britain, notably highlighted by the women sewing car seat covers at the Ford plant in Dagenham in 1968, who walked out based on the logic that their work was "equally necessary" to the men’s work. Although Barbara Castle, the minister who introduced the Equal Pay Act in 1970, thought the concept was "too woolly," it was legally enshrined in the 1980s under pressure from Brussels.

Philosophical and Economic Critique of 'Value'

Within the larger critique of Britain's 'equal value' pay rules, the concept of 'value' itself is challenged as fundamentally flawed and economically unsound:

1. The Need for a Non-Monetary Basis: Traditional equal pay disputes (comparing similar work) do not rely on determining the tasks' intrinsic worth. However, when comparing different jobs, a "common currency of value" is required. Since the entire substance of these claims is that market wages are incorrect, this currency must be non-monetary.
2. The "Labour Theory of Value": Critics argue that seeking this non-monetary basis quickly leads to a "fairly dodgy sort of Marxian ‘labour theory of value’ logic". This approach is criticized as a "Marxist farce". The concept challenges the idea that wages should simply reflect an employer’s willingness to pay and an employee’s corresponding willingness to sell their time.
3. Market Price as Value: A core philosophical contention is that "The market price is the value". Critics argue that the delusional belief that a job has "even a pence of 'value' not reflected in its market price" is reflective of the Marxist delusion that value is intrinsic to labour rather than being "determined by supply, demand, and negotiation".

The author notes that while assuming unexplained pay variation was due to sexism "was sensible" in the 1960s when overt sexism was rampant, this assumption is "pretty tough-to-justify today" when workplaces are less segregated. Furthermore, the attempt to ascribe a deeper, non-monetary value to labor can result in "nasty messages when roles are not deemed to be of ‘equal value’".

The Mechanics of Equal Value Assessment

The practical implementation of defining 'equal value' is heavily criticized as a form of "judicial central planning". The assessment process, while appearing rigorous, is sensitive to subjective assumptions:

• Subjective Central Planning: The assessment process is a "bizarre sort of judicial central planning, where an outward rigor masks flim-flam underlying logic". Judges are described as "well-intentioned people trying to do a fundamentally impossible job".
• The Eleven-Factor Model (Asda Case): In the widely cited Asda equal pay judgment, the court settled on an eleven-factor model to compare roles (shopworkers vs. warehouse staff).
  • Each job is banded between A (50 points) and E (10 points) for factors like Physical Demands, Emotional Demands, and Responsibility for Assets.
  • The court determined, for instance, that physical demands were higher in the warehouse, but emotional demands and broader responsibilities were higher in the shop.
• Sensitivity and Arbitrariness: The rigor of this model is questioned because the eleven categories are unlikely to be mutually exclusive and collectively exhaustive (MECE). Furthermore, the judgment is considered "extraordinarily sensitive" to the implicit assumption that all eleven categories—like "responsibility for assets" and "physical skills"—are equally weighted. If weights are adjusted, it is easy to reach a desired conclusion, rendering the methodology "wildly subjective".
• Tiebreakers: The process can involve "wackier" elements, such as the use of tiebreaker categories like "customer goodwill" and "marginality". In the Asda case, two adjustments worth 40 points shifted the shop section-leader into the lead, and because the scores fell within the 20-point tolerance band (460 vs. 480), the jobs were deemed of equal value.

Ultimately, this approach is described as having "hand-waving pseudo rigour" that is sensitive to "impossible-to-justify assumptions," making it vastly unlikely to accurately pin down job differences and confidently ascribe any remainder to sexism.

The process of defining and litigating 'equal value' thus creates a "messy can of worms", transforming pay negotiations from a market function to a subjective judicial exercise. This judicial determination of value, divorced from market reality, is why the ensuing financial chaos has necessitated a serious interrogation of whether "the chaos has been worth it".

The sources offer a detailed critique of the ‘equal value’ pay rules in Britain, focusing heavily on the flawed mechanics used to assess job value and specific legal and practical litigation flaws that amplify the chaos and financial damage.

Assessment Mechanics: Judicial Central Planning

The core critique of the ‘equal value’ rules stems from the inherently subjective and complex methods courts use to determine if disparate jobs are of equal worth, a process labeled as a "bizarre sort of judicial central planning".

The Eleven-Factor Model (Asda Case)

The sources detail the assessment process using the example of the Asda equal pay judgment, which compared shopworkers (often female) with warehouse staff (often male).

• Scoring System: The court settled on an eleven-factor model. For each factor—such as Knowledge, Emotional Demands, Responsibility for Assets, and Physical Demands—every job is assigned a score, typically banded between A (50 points) and E (10 points).
• Contrasting Demands: The model acknowledged, for instance, that physical demands were higher in the warehouse, while emotional demands and broader responsibilities were higher in the shop.
• Implicit Equal Weighting: A major criticism is that the judgment implicitly treats all eleven categories equally, despite there being "no real reason to think that 'responsibility for assets' and 'physical skills,' for instance, are equally important". The judgment is described as "extraordinarily sensitive to that assumption". Adjusting the weights, critics argue, makes it "not difficult to reach whichever conclusion you want," rendering the methodology "wildly subjective".
• Non-MECE Categories: The categories themselves are criticized for failing the consultant’s test of being mutually exclusive and collectively exhaustive (MECE), noting the overlap between factors like “emotional demand” and “mental demands,” or “physical skills,” “physical demands,” and “working conditions”.
• Tiebreakers: The process also incorporates "wackier" elements, such as the use of tiebreaker categories. In the Asda case, “customer goodwill” and “marginality” were used to adjust scores. These two adjustments, totaling 40 points, shifted the shop section-leader into the lead (480 points) over the warehouse team-manager (460 points).
• Tolerance Band: Despite the 20-point difference, the jobs were deemed of ‘equal value’ because the scores fell within the 20-point tolerance band.

The overall assessment mechanism is characterized as having "hand-waving pseudo rigour" that is sensitive to "impossible-to-justify assumptions," making it highly unlikely to confidently ascribe any remaining pay disparity to sexism. The overwhelming impression is that the judges are "well-intentioned people trying to do a fundamentally impossible job".

Major Litigation and Implementation Flaws

Beyond the assessment mechanism, the sources identify four specific issues that make the implementation of ‘equal value’ rules particularly damaging in practice:

1. Crippling Scale of Back-Pay: One critical factor making the cases so "crippling" in Britain is the generous six-year back-pay window available to victors. This liability stems from a 1990s ruling by the European Court of Justice. Critics argue that even if the principle were considered reasonable, focusing on changing future pay would be preferable to "saddling public bodies with vast liabilities for historic disparities".
2. Persistent Market Distortions: Judicial rulings cannot alter the underlying labor market facts, such as which jobs workers deem more desirable. When an employer loses, they face two unideal choices:
   • Raise the pay of the worse-paid job, which can act as a semi-arbitrary pay subsidy paid for by the rest of society (e.g., in higher retail prices).
   • Pull down the pay of the better-paid role, often preferred by cash-strapped councils. This causes retention issues, and subsequent attempts to bridge the gap (e.g., using one-off bonuses, as Birmingham did) can "invite new equal value claims, forcing bigger payouts".
3. Job Evaluations (JEs) as a "Shadow Payroll Tax": To mitigate the risk of lawsuits, employers may proactively run job evaluations to audit for gender discrepancies.
   • While defenders of the law argue employers simply need to improve running JEs, the ongoing expense of these audits is substantial.
   • A full, bespoke evaluation for a large employer could cost low single-digit millions initially, with hundreds of thousands in ongoing annual costs.
   • This continuous auditing functions as a "de facto payroll tax on employers", but the receipts go to HR consultants and law firms, rather than public services like schools and hospitals.
4. Outsourcing Loophole and Entrenchment: Employers can sidestep equal value rules by outsourcing hiring. The sources note that claims primarily hit councils (like those run by Labour or SNP) that find outsourcing politically uncomfortable. This practice is deemed non-ideal because businesses make outsourcing decisions based purely on equal-pay rules. Furthermore, the government's current plan to extend equal value to cover outsourced workers would entrench the principle at a time when the author suggests it should be dialed back.

The sources conclude that these implementation issues—especially the generous back-pay and the expense of continuous job evaluations—compound the conceptual illogic of the ‘equal value’ idea, resulting in "billion-pound city-paralysing payouts".

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The flaw in the assessment mechanics can be likened to trying to measure the "value" of a painting and a sculpture using a ruler designed only for weight. You can rigorously measure eleven different attributes (like the emotional depth of the painting vs. the physical size of the sculpture), but because the measurement tools are inherently subjective, and the categories overlap, the final "score" is an arbitrary number dictated by the initial, impossible-to-justify assumption that the two pieces of art should be compared on an equal-factor basis, leading to enormous financial liabilities based on a fundamentally unstable foundation.

The critique of ‘equal value’ pay rules in Britain emphasizes that the concept, despite being cloaked in the language of equality, has resulted in profound and widespread negative practical consequences, particularly financial damage to local authorities and distortions in the labor market. The scale of the chaos is described as "colossal".

Crippling Financial Consequences (Scale and Impact)

The most immediate and dramatic negative consequence is the colossal financial liability, which "could easily end up in eleven digits" across the public and private sectors.

Impact on Local Authorities (Public Sector)

Claims against local authorities are well advanced and have been devastating, "hobbling some of Britain’s most important cities for well over a decade".

• Bankrupting Cities: The equal value pay rules are cited as the "underlying cause" of the strikes and "billion-pound payouts that have bankrupted Birmingham". Birmingham is expected to pay out at least £1.3bn, possibly more.
• Asset Sales and Service Cuts: To fund these liabilities, cities have been forced to take drastic measures:
  • Birmingham sold two exhibition centers and two arenas at "fire-sale prices" in 2015, council taxes have doubled, public services have been cut, and another round of asset sales is currently underway.
  • Glasgow faced tranches of claims totaling approximately £1.3bn ($\sim$£500m in 2019 and $\sim$£800m in 2023). This was paid for by selling and leasing back landmark buildings, including the main art museum and city council chambers, alongside cutbacks and a significant rise in council taxes.
• Widespread Liabilities: Other authorities are facing significant financial burdens, including North Lanarkshire (paid out $\sim$£100m) and Sheffield (case ongoing, "could well cost hundreds of millions").

Impact on the Private Sector

Seventy percent of British grocery chains by market share are facing equal value claims. The resolution of these cases carries two major financial threats:

1. Massive Back-Pay: Major retailers like Asda, Tesco, Morrison’s, and Sainsbury’s could each be "on the hook for a billion or more in back-pay". The Asda judgment alone is "trundling toward a £1.2bn payout".
2. Increased Consumer Prices: Alongside the back-pay, there will be a "hefty boost to their future wage bill," which, for low-margin businesses like supermarkets, will flow "straight into prices" for consumers.

Market Distortions and Unintended Consequences

The sources argue that implementing these judicial rulings generates persistent distortions in the labor market because judges cannot change underlying labor market realities regarding job desirability.

1. Retention Issues and Further Litigation: When an employer (especially cash-strapped councils) loses a case, they often prefer to "pull down the better-paid role" rather than raise the worse-paid one. This causes retention problems. Attempts to bridge the gap later, such as Birmingham’s use of one-off bonuses, can "invite new equal value claims, forcing bigger payouts".
2. Job Evaluations as a "Shadow Payroll Tax": The need for employers to proactively run Job Evaluations (JEs) to audit for gender discrepancies acts as a mitigating strategy against litigation but introduces a new, ongoing cost. This continuous audit functions as a "de facto payroll tax on employers," where the receipts flow to HR consultants and law firms, instead of to public services like schools and hospitals. A full evaluation for a large employer could cost millions initially, with hundreds of thousands in ongoing annual costs.
3. Outsourcing Loophole: The rules incentivize employers to sidestep the law by outsourcing hiring, as claims tend to hit councils that find outsourcing politically uncomfortable (often Labour or SNP councils). Having businesses make outsourcing decisions purely based on equal-pay rules is deemed "not exactly ideal".

Philosophical and Social Damage

The reliance on a non-market, judicial determination of 'value' leads to negative philosophical and social consequences:

• Illegitimate Cost Management: Courts have ruled that keeping costs down was a "legally illegitimate reason for pay differences". Critics argue that, in a competitive market economy, keeping costs down and passing savings on to consumers "is exactly what a business like Next ought to be doing".
• Potential for "Nasty Messages": Attempting to yoke job value to monetary compensation so explicitly can break down social norms that separate them. This could lead to "nasty messages when roles are not deemed to be of ‘equal value’".
• Discouraging Negotiation: The focus on systemic correction can be seen as punishing employers for rational decisions and discouraging personal negotiation. The example is given of an analyst who receives a pay rise to match a headhunting offer—this reflects their updated market value, but if their female counterpart did not negotiate or receive a similar offer, pretending the resulting pay gap is oppression "punishes employers for rational decisions".
• Political Inaction: Despite the crippling consequences, there has been a lack of "open conversation" about the issue because "pay equality strikes most people as a good thing," making it a political landmine to question.

In essence, the negative practical consequences show that the 'equal value' principle has not only resulted in massive and expensive litigation but has also become "bad, messy and distortive policy" that has financially kneecapped local governments and inflated costs for consumers, without fundamentally addressing the labor market's structure.

The sources indicate that the critique of Britain's 'equal value' pay rules faces significant political difficulty due to the sensitive nature of pay equality, and that the future trend points toward the potential expansion and entrenchment of these damaging rules, both domestically and internationally.

Political Difficulty: The "Landmine" of Equality

The primary political challenge facing critics of 'equal value' is the difficulty of initiating a public conversation about reforming the law, as the concept of pay equality is widely viewed as a good thing.

• Political Inertia: Despite the "crippling" financial consequences, such as the bankruptcy of cities like Birmingham, there has been a lack of "open conversation" about why this has happened. The scale of the chaos and the underlying precariousness of the law’s economic logic have not been fully appreciated by most Brits.
• Political Landmine: The subject is considered a "political landmine" because "pay equality strikes most people as a good thing" for "obvious and laudable reasons". This makes it difficult for sceptics to voice concerns, forcing them to "settle for bewailing central planning" while supporters gain the "adrenaline-rush of pushing for equality and justice".
• Source of Claims: Claims primarily hit councils run by Labour or SNP, who find outsourcing politically uncomfortable. This suggests a political dimension to which employers are most vulnerable to these lawsuits.
• Lack of Scrutiny: Until the past year or so (prior to 2025), virtually all press coverage of equal value cases presumed they were "exceptionally well-founded," resulting in a "delinquent" failure to interrogate the law's economic logic. The author notes a lack of op-eds questioning the law before 2023. While the dam is "breaking" (with publications like The Economist and The Times gently questioning the issue), the debate is still nascent.

The incentives for discussing the issue are "totally askew," and the author notes that the British public generally does not share their "visceral discomfort towards overzealous dirigisme" (central planning). The author suggests that running polls on specific equal value scenarios (e.g., comparing cashiers and warehouse workers) might demonstrate that the core intuition that these are vastly different jobs "cuts through" with voters.

Future Trend: Expansion and Entrenchment

The sources indicate that, despite the problems, the trend is toward expanding the scope of 'equal value' rules rather than dialing them back.

• Government Intent to Expand: The government appears set on expanding the scope of the equal value rules. Specifically, the government wants to extend the principle to cover outsourced workers. The author argues that this would be a mistake, as it would "entrench the principle at a time when it’d be much better to dial it back". Extending the rules to outsourced workers also raises complex issues, such as whether subcontractors would be forced to create "separate bespoke payscales" for every employer they work with.
• Legislative Requirement: Undoing the equal value principle would be a "momentous change," requiring primary legislation. The principle is now so established that one lawyer compared its removal to "removing a limb" from British equal pay jurisprudence.
• Brexit Context: Following Brexit, Britain has the legal ability to abolish the principle without violating EU rules. However, the current government is not "especially interested in taking" that path.
• International Contagion (EU): The issue is also relevant to the rest of Europe. While similar claims of this scale have not materialized in the EU yet—partly due to stricter legal funding norms (fewer no-win no-fee lawyers) and less salary transparency—this may change. The author suggests that the EU Pay Transparency Directive, set to come into force in 2026, could potentially import these problems to the rest of Europe, depending on how member states implement it.

The sources conclude that, while some believe the worst financial consequences are past as employers learn to manage the regime through methods like job evaluations (JEs) and outsourcing, inaction is still a mistake due to ongoing costs and the fact that the principle remains "bad, messy and distortive policy". The expansionary trend means the financial and operational burden is set to continue or worsen.