In 1970, Labour’s employment secretary Barbara Castle shepherded the Equal Pay Act through parliament, with the promise that women would be paid as much as men when doing equivalent jobs. The political spark for the Act came from a famous strike by women at Ford’s Dagenham plant, and the moral case is self-evident.
The economics, however, looked worrisome. The Financial Times wrote a series of editorials praising “the principle” of equality but nervous about the practicalities. In September 1969, for example, an FT editorial observed that “if the principle of equal pay were enforced too rigorously, employers might often prefer to employ men”; and the day after the Act came into force on December 29 1975, the paper noted a new era “which many women may come to regret”.
The economic logic for these concerns is straightforward. Whether because of prejudice or some real difference in productivity, employers were willing to pay more for men than for women. That inevitably meant that if a new law artificially raised women’s salaries, women would struggle to find work at those higher salaries.