Is ‘Equal Pay’ Going to Bankrupt Local Government?

If you haven’t been following the story of Birmingham City Council going bankrupt, you need to pay attention. I’d assumed it was a simple case of a Labour-run council running out of other people’s money – perhaps because it’d hired too many busybodies or thrown too much cash at some boondoggle. What actually happened is much more intriguing, and worrying.

In short, the council was sued into bankruptcy by its own former employees. Thousands of them who’d worked in traditionally female professions (such as cleaners and lollipop ladies) sued on the grounds that they’d been denied bonuses that were available to some traditionally male professions (like bin men and grave diggers).

Already by 2010 such lawsuits had cost the council £200 million. But then in 2012, a landmark Supreme Court decision ruled that ‘equal pay’ claims could be heard in the High Court – which has a six-year deadline for launching claims, rather than the six-month window in the employment tribunal. Consequently, thousands of additional workers who’d left their jobs more than six months ago brought claims against the council. As of 2024, Birmingham’s total liabilities from such claims may exceed £1 billion.

After declaring itself bankrupt last year, the council announced earlier this month how it plans to foot the enormous bill: by dimming street lights, selling off assets, raising burial costs, laying off up to 600 workers, hiking council tax by an eye-watering 21%, and reducing the frequency of waste collection to once a fortnight.  

I don’t know about you, but the whole thing strikes me as a farce.

Women signed up to work for the council at a particular wage (no one forced them to work at that wage and they could have taken another job). Now, several years later, Birmingham residents face a huge hike in council tax, along with major cuts to public services, all because a court ruled it was ‘unfair’ that men in completely different jobs were getting paid more at the same time.

I work on a computer. An investment banker at Goldman Sachs works on a computer. Therefore we should get paid the same.

This isn’t how wages are determined in a free society. They are meant to be determined by supply and demand. If bin men or grave diggers are in short supply, their wages need to rise to attract more people into those professions. What people in completely different jobs are earning is irrelevant.

If I were a resident of Birmingham, I’d be furious. In fact, I’d probably move. (An unintended consequence of this ‘equal pay’ racket is that Birmingham’s tax base will be further eroded as savvy residents flee the impending tax hike.)  

But it gets worse. Dozens of other councils across the U.K. could be facing bankruptcy for the same reason. And it isn’t just councils. Six of the country’s biggest retail chains are currently being sued on ‘equal pay’ grounds.

You’d assume it would fall to the ‘Conservatives’ to put an end to this nonsense. But no, they’re doubling down. Rather than rejecting the whole notion that wages can be determined by what seems ‘fair’, and duly scrapping or rewriting the relevant legislation, they’ve made it easier for men in female-dominated professions to sue for discrimination!

The West supposedly won the Cold War, but we’ve somehow been saddled with wage communism.