Luis and Amy are programmers employed by X Corp. They work in cubicles next to each other. Both have M. Sc. degrees in computer science (Luis also has a Ph. D. in philosophy). They are about the same age, and have been with the company since its birth. Luis codes games, while Amy codes a variety of projects. Although their work is different, both jobs require the same skill level. Luis makes $100,000 a year, while Amy makes $80,000. If Amy sues X Corp. because of the pay differential, what must she show? What might the company argue in defense? Who should win?

If Amy sues X Corp. because of the pay differential, what must she show?

The Equal Pay Act of 1963 prohibits discrimination in payment on the basis of gender (and race and origin also). In this case, Amy must prove that her work requires the same skills as Luis's and that it provides the same value to the company. They both have a master's degree in computer science, but she must also show that Luis's Ph.D. is not important to their work.

What might the company argue in defense?

The company might argue two things:

Who should win?

If their work is similar, then Amy should win. If they are basically both doing the same job and require the same skills, therefore, the salary should be the same.

But if Luis's work is much more relevant and profitable for the company, then Amy would lose. If this is true, they might have to change Luis's compensation and reduce his salary but increase bonus compensation. This is true in all companies (or the vast majority of), e.g. the quarterback receives the highest salary since his job is more important for the team.

answer makes less frequent trips to the bank and firms make less frequent price changes;