XIBMS – WAGE DIFFERENCES AT ROBERT HALL XIBMS – WAGE DIFFERENCES AT ROBERT HALL Robert Hall Clothes, Inc., owned a chain of retail stores that specialized in clothing for the family.  One of the Chain’s stores was located in Wilmington, Delaware.  The Robert Hall store in Wilmington had a department for men’s and boy’s clothing and another department for women’s and girl’s clothing.  The departments were physically separated and were staffed by different personnel : Only men were allowed to work in the men’s department and only women in the women’s department.  The personnel of the store were sexually segregated because years of experience had taught the store’s managers that, unless clerks and customers were of the same sex, the frequent physical contact between clerks and customers would embarrass both and would inhibit sales. The clothing in the men’s department was generally of a higher and more expensive quality than the clothing in the women’s department.  Competitive factors accounted for this : There were few other men’s stores in Wilmington so the store could stock expensive men’s clothes and still do a thriving business, whereas women’s clothing had to be lower priced to compete with the many other women’s stores in Wilmington.  Because of these differences in merchandise, the store’s profit margins on the men’s clothing was higher than its margins on the women’s clothing.  As a result, the men’s department consistently showed a larger dollar volume in gross sales and a greater gross profit, as is indicated in Table 7.11.             Because of the differences shown in Table 7.11 women personnel brought in lower sales and profits per hour.  In fact male salespersons brought in substantially more than the females did (see Tables 7.12 and 7.13)   Men’s Department Women’s Department     Year   Sales ($) Gross Profit ($) Percent Profit ($)   Sales ($) Gross Profit ($) Percent Profit ($) 1963 210,639 85,328 40.5 177,742 58,547 32.9 1964 178,867 73,608 41.2 142,788 44,612 31.2 1965 206,472 89,930 43.6 148,252 49,608 33.5 1966 217,765 97,447 44.7 166,479 55,463 33.5 1967 244,922 111,498 45.5 206,680 69,190 33.5 1968 263,663 123,681 46.9 230,156 79,846 34.7 1969 316,242 248,001 46.8 254,379 91,687 36.4 TABLE 7. 12   Year Male Sales per Hour ($) Female Sales Per Hour ($) Excess M Over F (%) 1963 1964 1965 1966 1967 1968 1969 38.31 40.22 54.77 59.58 63.18 62.27 73.00 27.31 30.36 33.30 34.31 36.92 37.20 41.26 40 32 64 73 71 70 77             As a result of these differences in the income produced by the two departments, the management of Robert Hall paid their male salespersons more than their female personnel.  Management learned after a Supreme Court ruiling in their favor in 1973 that it was entirely legal for them to do this if they wanted.  Wages in the store were set on the basis of profits per hour per department, with some slight adjustments upward to ensure wages were comparable and competitive to what other stores in the area were paying.  Over the years, Robert Hall set the wages given in Table 7.14.  Although the wage differences between males and females were substantial, they were not as large as the percentage differences between male and female sales and profits.  The management of Robert Hall argued that their female clerks were paid less because the commodities they sold could not bear the same selling costs that the commodities sold in the men’s department could bear.  However, the female clerks argued, the skills, sales efforts, and responsibilities required of male and female clerks were “substantially” the same. TABLE 7. 13   Year Male Gross Profits per Hour ($) Female Gross Profits Per Hour ($) Excess M Over F (%) 1963 1964 1965 1966 1967 1968 1969 15.52 16.55 23.85 26.66 28.74 29.21 34.16 9.00 9.49 11.14 1143 12.36 12.91 15.03 72 74 114 134 133 127 127     TABLE 7. 14   Year Male Earnings per Hour ($) Female Earnings Per Hour ($) Excess M Over F (%) 1963 1964 1965 1966 1967 1968 1969 2.18 2.46 2.67 2.92 2.88 2.97 3.13 1.75 1.86 1.80 1.95 1.98 2.02 2.16 25 32 48 50 45 47 45   Questions : In your judgment, do the managers of the Robert Hall store have any ethical obligations to change their salary policies ?  If you do not think they should change, then explain why they have an obligation to change and describe the kinds of changes they should make. Would it make any difference to your analysis if, instead of two departments in the same store, it involved two different Robert Hall   Stores, one for men and one for women ? Would it make a difference if     two stores  (one for men and one for women) owned by different companies were involved ?  Explain each of your answers in terms of the relevant ethical principles upon which you are relying. Suppose that there were very few males applying for clerks’ jobs in Wilmington while females were flooding the clerking job market. Would this competitive factor justify paying males more than females ?  Why ? Suppose that 95 percent of the women in Wilmington who were applying for clerks’ jobs were single women with children who were on welfare while 95 percent of the men were single with no families to support.  Would this need factor justify paying females more than males ?  Why ?  Suppose for the sake of argument that men were better at selling than women; would this justify different salaries ? If you think the managers of the Robert Hall store should pay their male and female clerks equal wages because they do “substantially  the same work” then do you also think that ideally each worker’s salary should be pegged to the work he or she individually performs (such as by having each worker sell on commission) ?  Why ? Would a commission system be preferable from a utilitarian point of view considering the substantial book keeping expenses