Of Giving and Taking: Applications and Implications of <i>City of Los Angeles, Department of Water & Power v. Manhart</i>
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[Excerpt] This article next explores the economic implications of the various applications of Manhart. Because women outlive men, equal contributions and equal monthly benefits for counterparts make women more costly employees than men. Employers who realize this fact will be tempted to hire fewer women or to pay them less money. Equal contributions and equal monthly benefits also often mean that men must subsidize women's benefits. A man therefore can increase his compensation by working for an employer who has either no retirement plan or a severance pay plan, while a woman can increase her remuneration by working for an employer who maintains a conventional plan. Rational employees will tend to go where their compensation is maximized, producing two results: (1) men and women will work for different employers, according to the nature of their retirement plans; and (2) to the extent that this process is completed, women will receive lower monthly benefits than their male counterparts. Each of these consequences occurs because the Supreme Court distinguished in Manhart between conventional retirement plans and severance pay plans, a distinction that this article argues is unnecessary and should be abandoned in favor of a policy of treating all retirement plans according to the same rules.
City of Los Angeles; Department of Water & Power v. Manhart; equal opportunity; discrimination; gender; retirement plans; severance pay
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