[Senate Hearing 110-64]
[From the U.S. Government Publishing Office]
S. Hrg. 110-64
CLOSING THE GAP: EQUAL PAY FOR WOMEN WORKERS
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
ON
EXAMINING CLOSING THE GAP RELATING TO EQUAL PAY FOR WOMEN WORKERS
__________
APRIL 12, 2007
__________
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
EDWARD M. KENNEDY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut MICHAEL B. ENZI, Wyoming,
TOM HARKIN, Iowa JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico RICHARD BURR, North Carolina
PATTY MURRAY, Washington JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island LISA MURKOWSKI, Alaska
HILLARY RODHAM CLINTON, New York ORRIN G. HATCH, Utah
BARACK OBAMA, Illinois PAT ROBERTS, Kansas
BERNARD SANDERS (I) Vermont WAYNE ALLARD, Colorado
SHERROD BROWN, Ohio TOM COBURN, M.D., Oklahoma
J. Michael Myers, Staff Director and Chief Counsel
Katherine Brunett McGuire, Minority Staff Director
(ii)
C O N T E N T S
__________
STATEMENTS
THURSDAY, APRIL 12, 2007
Page
Harkin, Hon. Tom, a U.S. Senator from the State of Iowa, opening
statement...................................................... 1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming,
opening statement.............................................. 3
Prepared statement........................................... 5
Clinton, Hon. Hillary Rodham, a U.S. Senator from the State of
New York, statement............................................ 9
Reed, Hon. Jack, a U.S. Senator from the State of Rhode Island,
statement...................................................... 10
Murray, Hon. Patty, a U.S. Senator from the State of Washington,
statement...................................................... 11
Prepared statement........................................... 11
Brown, Barbara, Attorney, Paul Hastings, Washington, DC.......... 13
Prepared statement........................................... 15
Samuels, Jocelyn, Vice President for Education and Employment,
National Women's Law Center, Washington, DC.................... 19
Prepared statement........................................... 21
Murphy, Evelyn, Founder and President of the WAGE Project,
Incorporated, Boston, Massachusetts............................ 28
Prepared statement........................................... 30
Cohen, Philip, Associate Professor and Director of Graduate
Studies, Department of Sociology, University of North Carolina,
Chapel Hill, North Carolina.................................... 36
Prepared statement........................................... 38
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Kennedy, Hon. Edward M., a U.S. Senator from the State of
Massachusetts, prepared statement.......................... 53
Brown, Hon. Sherrod, a U.S. Senator from the State of Ohio,
prepared statement......................................... 54
Response to Questions of Senator Kennedy by:
Barbara Brown............................................ 55
Jocelyn Samuels.......................................... 55
Evelyn Murphy............................................ 57
Philip Cohen............................................. 57
Response to Questions of Senator Enzi by Jocelyn Samuels..... 57
Response to Questions of Senator Harkin by Evelyn F. Murphy.. 59
Response to Questions of Senator Reed by Philip Cohen........ 61
Response to Questions of Senator Clinton by:
Barbara Brown............................................ 61
Evelyn Murphy and Jocelyn Samuels........................ 62
Evelyn Murphy............................................ 63
Philip Cohen............................................. 66
(iii)
CLOSING THE GAP: EQUAL PAY FOR WOMEN WORKERS
----------
THURSDAY, APRIL 12, 2007
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met, pursuant to notice, at 2 p.m., in Room
SD-628, Dirksen Senate Office Building, Hon. Tom Harkin,
presiding.
Present: Senators Harkin, Murray, Reed, Clinton, and Enzi.
Opening Statement of Senator Harkin
Senator Harkin [presiding]. The Senate Health, Education,
Labor, and Pensions Committee will come to order. At today's
hearing, we'll focus on three things--the enforcement of two
current laws, the Equal Pay Act of 1963, the Fair Pay Act and
also the Paycheck Protection Act.
I'm proud to be a part of this important hearing on the
wage gap between men and women. It's unbelievable to me that
more than 40 years after the passing of the Equal Pay Act and
the Civil Rights Act, women are still making only 77 cents for
every dollar that a man makes. I guess we're supposed to be
comforted by the fact that the wage gap is shrinking but
according to the Economic Policy Institute, this isn't because
women are making more, it's because men are making less.
This is an interesting chart here. What it shows is
earnings of men, earnings of women. We won't get into ratio but
it shows them coming together about 2024, not because women are
going to make more but because both are making less and that
says something about what our economy is scheduled to do in the
next few years, if we keep on the same course that we're on.
Not very heartening.
The Iowa Workforce Development Agency in my own State has
been looking at data for all of the jobs in my State. It found
that across all industries, women are only making 61.8 percent
of what men make--61.8 percent. There are various reasons given
why women make less than men, such as women seeking self-
selecting lower paid jobs, having less education, taking time
off to have babies, et cetera, et cetera. However, I believe
that women are making less because we are not properly
enforcing current law and because we do not value jobs we
traditionally view as women's jobs as we value those we think
of as men's jobs.
Why, I ask, is a housekeeper worth less than a janitor? Why
is a parking meter reader worth less than an electrical meter
reader? Why is a social worker worth less than a probation
officer? Without question, we need to do a better job of
enforcing the law that requires equal pay for equal work and we
need to stiffen the penalties for violations. That's why I
support Senator Clinton's Paycheck Fairness Act, which would
help give women the tools they need to identify and confront
discrimination head on.
But we also need to be doing more to make sure women are
not steered into lower paying job categories and that's why
yesterday, I re-introduced the Fair Pay Act. My bill amends the
Fair Labor Standards Act of 1938 to prohibit discrimination in
the payment of wages on the basis of sex, race or national
origin. Most importantly, it requires each individual employer
to provide equal pay for jobs that are comparable in skill,
effort, responsibility, and working conditions.
This is the tenth or eleventh year in a row I've introduced
this. So we're just not going to give up.
It's strictly about equality and parity. Today, millions of
female-dominated jobs, for example, as I said, social workers,
teachers, child care workers, Head Start workers, nurses--are
equivalent in skills, effort, responsibility and working
conditions to similar jobs dominated by men but these jobs pay
significantly less.
Even for highly educated women, according to the American
Association of University of Women, a typical college-educated
woman earns $46,000 a year while her male classmates end up
making an average of $62,000 a year, a difference of $16,000 a
year, which would come in pretty handy.
If you want to read about women living with this kind of
wage discrimination, Evelyn Murphy has a collection of personal
stories on her WAGE Project Web site. One such story really
outlines the long-term problem of gender discrimination. A 53-
year-old woman wrote,
I started working at a Circuit Bell Telephone Company in
1970, right out of high school. I was making $79 a week. At the
time, it wasn't bad money but the guys outside were making $150
a week and getting time and a half for working overtime.
And again, these women, we know will retire with less money
eligible for their retirement, eventhough they live longer so
they need more retirement money. And let's face it, a lot of
times women confront separated marriages, divorces in their
fifties and they've been working at a low paying job and they
are left with even lower paying Social Security benefits and
things like that, because of this.
Well, my bill would also prohibit companies from reducing
other employees' wages to achieve pay equity and it also
requires public disclosure of employer job categories and their
pay scales. Moreover, it would allow payment of differential
wages under a seniority system, merit system or a system that
measures earnings by quantity or quality of production.
Well, some say we don't need more laws--that market forces
will take care of it. But our experience shows that there are
just some things that market doesn't take care of. That's why
we passed the Equal Pay Act. That's why we passed the Civil
Rights Act and the Family Medical Leave Act. That's why we
passed the Americans with Disabilities Act. The market just
doesn't answer some of those problems.
This is a vital hearing, one that will keep us focused on
trying to close this gap and to make sure that women are not
discriminated against in the workplace. It's unfair, it's
demoralizing. Women shouldn't have to battle and battle and
battle day after day just to win equal pay. So we need
inclusive national laws to make equal pay for equal work a
basic standard and a legal right in the American workplace.
I might just add parenthetically, in Iowa under a
Republican governor and a Republican legislature, years ago, we
passed a pay equity bill for those who are working in the
public sector. The sky didn't fall. The earth didn't come to an
end. And quite frankly, women started making more in the public
sector. Minnesota has the best one, by the way. Minnesota
covers municipal workers. In Iowa, we just cover the public
workers but it has worked well in the State of Iowa and I think
if it works there, I don't know why it couldn't work everywhere
else.
So with that, I welcome our guests. I will yield to Senator
Enzi for an opening statement and I'll yield to Senator Clinton
for an opening statement.
Opening Statement of Senator Enzi
Senator Enzi. Thank you, Mr. Chairman. I do want to thank
Chairman Kennedy for scheduling today's hearing on this very
important topic of wage equity. I also want to thank my
colleague, Senator Harkin, for chairing today's hearing. I'm
sorry that I won't be able to be here for all of it. I've
looked at the testimony and I will be looking at answers to the
questions that you have and I'll also be sending a few
questions.
Since the passage of the Equal Pay Act and the
discrimination provisions of title VII, we have witnessed
enormous progress in ensuring both the quality of opportunity
and equity of compensation. However, some maintain these
efforts are not sufficient and must be augmented, pointing to
what some could call a wage gap that continues to exist in
terms of compensation levels between men and women.
Many labor specialists note that pay differentials are a
function of labor market economics and they reflect the choices
that individual workers and groups of workers tend to make and
the underlying skill sets of the workers.
I believe the proper way to address this situation is to
improve skills, training and education. That's why I continue
to urge the Democratic leadership to take up and pass the
Workforce Investment Act, to re-authorize the Federal
Government Job Skills and Training Program. It passed the
Senate twice unanimously and it's been sitting around for 4
years, waiting for a Conference Committee.
In an economy where skills are critical to success,
everyone should have access to education and training
throughout their lives and the Workforce Investment Act is one
way for people to gain the necessary knowledge and skills they
need. This bill passed the Senate last year, however the
Democratic leadership has yet to even address the critical bill
in the 110th Congress.
Now, we need to look no further than my home State of
Wyoming to find a perfect example of what is happening and what
can happen to improve the job skills and training for women.
Some of you may know that our State is called the Equality
State. It was the first territory and the first State to extend
the right to vote to women. Wyoming was the home to our
Nation's first woman judge, the first woman governor, the
Nation's first woman elected to statewide office. In 1920, the
town of Jackson, Wyoming elected the Nation's first all-women
town government.
Now, despite Wyoming's long history of gender equality,
it's pay gap is among the highest of all of the States and
that's not because Wyoming employers are notoriously
discriminatory or grossly undervalue their female workers.
Rather, Wyoming demonstrates that market choices, education,
training and opportunity all play a role in the establishment
of wages and wage differentials.
Today, Wyoming is undergoing a period of unprecedented
growth, particularly in such sectors of the economy as energy,
natural resources and construction. We face significant labor
shortages in these industries. Just last week, the press
articles highlighted the fact that Wyoming's unemployment rate
is 2.3 percent, which is very close to the record set in the
late 1970s. In addition, there are thousands of energy-related
industry jobs that are unfilled and waiting for workers of
either gender.
By simple operation of the law of supply and demand, the
wage rates for positions in these sectors in Wyoming's economy
are at a very high absolute as well as comparative level. The
other reality is that many of these jobs, from heavy equipment
operators to carpenters and from welders to coal miners, are
not positions to which women traditionally gravitate.
In Wyoming, market forces have greatly increased the labor
rates for traditionally male jobs, which largely explains the
magnitude of the wage gap in my own State. Closing the wage gap
requires an increase in training and educational opportunities
for women.
Now, the role of education and training is evident in the
results of one such program. Climb Wyoming is a not-for-profit
program funded through a mix of private and public funds. Its
mission is to move low-income single mothers to higher paying
careers through training and placement assistance.
The program has enjoyed considerable success with program
graduates earning double and even triple their previous program
income levels. In many instances, these gains have been
achieved by encouraging program participants to consider non-
traditional work in the energy, natural resources and
construction industries and providing participants with the
necessary skills, training and placement assistance to make the
transition into such non-traditional work.
Over the past 2 years, Climb Wyoming has training and
placed 135 single mothers in such non-traditional careers as
short haul truck driving, welding and construction trades. The
Casper Star Tribune, which is our statewide newspaper, just
last week carried an article on the front, which is titled,
``Train Moms, Earn More.'' It's a tremendous article. It goes
on for several pages but it does point out some of the
tremendous changes the program has made in women's lives. One
woman, one of her difficulties is that she lives 40 miles from
the job so it's an 80-mile round trip. It doesn't sound like a
lot out here but nobody does that in Wyoming.
Senator Harkin. It takes about 5 minutes driving in
Washington.
Senator Enzi. Yes, much less. But she wanted to make sure
that her kids got to go to the Moorcroft School District so
that required her living in the adjacent town. There is the
experience of Valerie Gibbons, from my home town of Gillette.
It's a typical one.
In 2004, Valerie, a single mother with two children is
simply unable to make ends meet in a series of low-skill, low-
wage jobs. She entered the training program, was encouraged to
consider a non-traditional career and given the training and
counseling that eventually led her to obtaining a commercial
driver's license. She now works as a short-haul truck driver
for a construction company in Gillette and has more than
doubled her previous program earnings in much less time.
Now, the program has provided a host of similar success
stories. Heidi Shaffer, a single mother from Casper who could
barely make ends meet by working 55 to 80 hours a week in a
low-paying retail position. She trained for a non-traditional
position and now works as a welder at more than twice her
previous earnings. The success of Misty, a single mom with two
children and a program graduate from Cheyenne--before entering
the program, she worked in a fast food restaurant and earned $6
an hour. She enrolled in the program and studied integrated
systems technology and is now working on wind energy generation
and earning three times her pre-program income.
These are all real women that have, with encouragement and
training and education, managed to eliminate the wage gap in
their working careers. Just as we should be wary of government
intervention to set wage rates that are the function of
individual choice, we must be aggressive in pursing initiatives
that eradicate wage disparity through training and education.
We can learn a great deal from the success of Climb
Wyoming's efforts to help women climb the ladder to higher
paying jobs through education and training. In addition, we
must take up and pass the Workforce Investment Act
reauthorization. Our Democratic leadership has failed to
address the bill this Congress, even though it passed the last
two Congresses unanimously. This critical bill is essential to
getting the necessary Federal resources to States for jobs and
skills and education training. Both Climb Wyoming and the
Workforce Investment Act are real pathways to closing the wage
gap.
Thank you, Mr. Chairman.
[The prepared statement of Senator Enzi follows:]
Prepared Statement of Senator Enzi
Good morning. I want to thank Chairman Kennedy for
scheduling today's hearing on the very important topic of wage
equity. I also want to thank my colleague, Senator Harkin for
his willingness to Chair the hearing today.
The notion that any individual should be denied employment
opportunities, or compensated at lower levels because of their
gender is simply intolerable, and is not acceptable to any
fair-minded or reasonable person. Indeed, the sex
discrimination provisions of Title VII and the Equal Pay Act
were specifically designed to eliminate those twin evils.
Since the passage of these laws we have witnessed enormous
progress in ensuring both equality of opportunity and equity in
compensation. However, some maintain that these efforts are not
sufficient and must be augmented, pointing to the so-called
wage gap that continues to exist in terms of compensation
levels between men and women. Those who would go beyond the
vigorous enforcement of gender discrimination laws and the
efficient operation of open markets often make highly selective
use of statistical data reported by the Department of Labor's
Bureau of Labor Statistics to support their position. An op-ed
in last week's Washington Post referred to such statistics as
misused sound bites that tell us little about gender
discrimination in the workplace since they ignore the interplay
of such factors as occupation, experience, seniority, education
and hours worked in making gross compensation comparisons. For
example, in managerial and professional positions women are
much less likely to be employed in the highest paying fields in
the labor market such as engineering, and computer or
mathematics-related occupations. As a group, women are also
much more likely to work part-time than their male
counterparts. Part-time workers account for up to 25 percent of
all female wage and salary workers, while, by way of contrast
just 11 percent of all male wage and salary workers were part-
timers. This has been a relatively constant ratio over the
years. Women workers are also far more likely than men to enter
and leave the workforce for family or lifestyle reasons.
Surveys also strongly suggest that women workers tend to place
a much higher value than their male counterparts on job
flexibility and benefits than on pure earnings and are thus
more likely to gravitate to positions where market-based trade
offs are often made between the former and the latter. Thus,
while DOL's latest Report on Women's Earnings finds that
overall median female earnings have continued their steady rise
since 1979 and now stand at 81 percent of male earnings; it
also notes that caution should be exercised in the use of such
comparisons since they are determined ``on a broad level and do
not control for many factors that can be significant in
explaining earnings differences.''
I do not need DOL's cautionary warning about the
potentially misleading nature of these kinds of comparative
statistics since that is readily apparent to me as I look at
similar statistics for my home State of Wyoming. Wyoming, as
some of you may know is nicknamed ``The Equality State.'' It
was the first territory and the first State to extend the right
to vote to women. Wyoming was home to our Nation's first woman
judge, the Nation's first woman governor, and the Nation's
first woman elected to statewide office. In 1920 the town of
Jackson, Wyoming elected the nation's first all-woman town
government. The historical roots of gender equality run strong
and deep in Wyoming.
So, how can it be, that similar wage comparisons in my home
State of Wyoming show that the wage gap between the earnings of
men and women is greater than the national average, indeed in
some recent years the greatest in all of the States? Does this
suggest, as some would argue, that employers in Wyoming value
women employees less; or that Wyoming has somehow transformed
itself into the ``inequality state?''
That is categorically not the case. Such a view is not only
contrary to my State's history, it is contrary to my everyday
experience. What for me the Wyoming experience demonstrates is
that there is something overly simplistic and fundamentally
unsound in the type of ``comparative'' statistics that are so
often cited. While such statistical sound bites certainly make
for great political rhetoric; they rarely serve as the basis
for sound public policy.
Those who have studied this issue note that there are a
large number of factors, none of which involve employer
discrimination, that contribute to the wage gap. Many of these
factors boil down to matters of choice--choice of career,
choice of academic pursuit, choice of hours and work location,
as well as the choice to remain in the labor force or to leave
it temporarily or permanently. On a macro-economic basis all of
these choices contribute significantly to the existence of a
gender-related gap.
Legislation aimed at undoing the cumulative and macro-
economic effect of these individual choices, all in the name of
some goal of statistical purity, is neither warranted nor wise.
This is particularly true where doing so would place enormous
burdens and liabilities on even our smallest employers to
correct statistical ``imbalances'' which they did not cause,
and are not the result of their discrimination. There is a
fundamental difference between leveling the playing field, and
guaranteeing the score of the game. And, there is a fundamental
difference between correlation and causation. If we are going
to make sound policy and if we are going to make a real
difference we need to keep these distinctions clearly in mind.
In properly understanding the wage gap, we must understand
the role of choice, but we must also understand that choice is
not the only factor at play. There are other factors which
affect both individual and macro-economic compensation levels,
and those merit a closer look, since they are areas in which
governmental action may be warranted, and useful.
I believe that the proper way to address this situation is
to improve skills training and education. This is why I
continue to urge the Democratic leadership to take up and pass
the Workforce Investment Act to reauthorize the Federal
Government's job skills and training programs. In an economy
where skills are critical to success, everyone should have
access to education and training throughout their lives and the
Workforce Investment Act is one way for people to gain the
necessary knowledge and skills they need. This bill passed the
Senate last year however Democratic leadership has yet to even
address this critical bill in the 110th Congress.
In this regard, I am once again drawn to the example of my
own State. Wyoming, today, finds itself in a period of
unprecedented growth, particularly in such sectors of the
economy as energy, natural resources, and construction. We face
significant labor shortages in these industries. By simple
operation of the law of supply and demand, the wage rates for
positions in these sectors of Wyoming's economy are at very
high absolute, as well as comparative, levels. The other
reality is that many of these jobs, from heavy equipment
operator to carpenter, and from welder to coal miner, are not
positions to which women traditionally gravitate. The fact that
in Wyoming market forces have greatly increased the labor rates
for traditionally ``male jobs'' largely explains the magnitude
of the wage gap in my own State. However, to some extent it
begs the more fundamental question as to why these labor
shortages are not filled in proportional numbers by both male
and female job applicants. A major factor in this phenomenon
is, of course, the matter of choice. However, choice alone is
not the complete story. Education, training and opportunity
play a vital role as well.
The role of these factors in shrinking the wage gap is
evident in the results of just one training program in my home
State. ``Climb Wyoming'' is a not-for-profit program funded
through a mix of private and public funds. Its mission is to
move low income single mothers to higher paying careers through
training and placement assistance. The program has enjoyed
considerable success with program graduates earning double and
even triple their pre-program income levels. In many instances
these gains have been achieved by encouraging program
participants to consider ``non-traditional'' work in the
energy, natural resources and construction industries; and
providing participants with the necessary skills training and
placement assistance to make the transition into such ``non-
traditional'' work. Over the past 2 years, Climb Wyoming has
trained and placed 135 single mothers in such non-traditional
careers as short-haul truck driving, welding and construction
trades.
The experience of Valarie Giddens, from my home town of
Gillette is a typical one. In 2004, Valarie, a single mother
with two children, was simply unable to make ends meet in a
series of low skill, low wage jobs. She entered the training
program, was encouraged to consider a non-traditional career,
and given the training and counseling that eventually led to
her obtaining a commercial drivers' license. She now works as a
short-haul truck driver for a construction company in Gillette,
and has more than doubled her pre-program earnings. Valarie's
success has certainly helped to narrow the wage gap. However,
the cold statistical effect is not what is most important. In a
recent news interview she noted that securing a higher-paying
and secure job that she was a different person. ``It changed my
life so dramatically. I had my self esteem back,'' she said.
Those are the results that are important.
Valarie Giddens is not alone. The program boasts a host of
similar success stories. There's Heidi Schaffer, a single
mother from Casper, who could barely make ends meet by working
55-80 hours a week in a low-paying retail position. Like
Valarie, she was convinced to look at non-traditional work,
went through a training and apprentice program and now works as
a welder at more than twice her prior earnings. There's also
Misty, a single mother with two children and a program graduate
from Cheyenne. Before she entered the program Misty was working
in a fast food restaurant and earning about $6.00 per hour. She
completed a program in integrated systems technology where she
studied and trained in electrical, plumbing and HVAC work.
Today she is employed at a wind energy generation farm and is
earning nearly three times what she earned before entering the
training program.
These are all real women that have, with encouragement,
training and education, managed to eliminate the wage gap in
their own working careers. Just as we should be wary of
government intervention to manipulate wage rates that are the
function of individual choice; we must be aggressive in
pursuing initiatives that eradicate wage disparity through
training and education.
We can learn a great deal from the success of Climb
Wyoming's efforts to help women climb the ladder to higher
paying jobs through education and training. In addition, we
must take up and pass the Workforce Investment Act
reauthorization. Our democratic leadership has failed to
address the bill this Congress even though the bill passed the
Senate last Congress. This critical bill is essential to
getting the necessary Federal resources to States for job
skills and education training.
Both Climb Wyoming and the Workforce Investment Act are the
real pathways to closing the wage gap.
Senator Harkin. Thank you very much, Senator Enzi.
Senator Clinton.
Statement of Senator Clinton
Senator Clinton. Thank you very much, Senator Harkin and
thank you for your dedication to this issue over so many years.
I do agree with Senator Enzi that I hope we can take up the
Workforce Investment Act under a Democratic majority. We
weren't successful the last two Congresses but now that we have
a majority, I think we'll be able to pass it and I'm
particularly pleased because one of the provisions that is in
it goes right along with what Senator Enzi has talked about, an
amendment that I suggested to do more to encourage women to
seek out non-traditional employment in areas that historically
were not very friendly to women.
I think that is an important piece of the puzzle but I
don't think that obviates the need for us to enforce equal pay.
I believe that we have a real opportunity here with the
legislation that I've re-introduced, the Paycheck Fairness Act
with Senator Harkin's legislation, to really highlight the
impact on families from the continuing discrimination in the
workplace.
You know, a 2003 Government Accountability Office report
found that women's work patterns partially explained the
differences between men's and women's earnings but that even
accounting for all other variables that are often used to
justify the pay gap, such as time out of the workforce to care
for children or part-time work, women still earn significantly
less than men. The report also concluded that 20 percent of the
wage gap could not be explained by factors other than
discrimination.
Now, conventional wisdom often associates the pay wage gap
with low paying jobs but this inequity is not limited to people
who are in low-paying jobs. Just recently, Wimbledon finally
came around to paying the men and women champions the same
amount of money and we've had a series of studies done at some
of our finest universities, like MIT, finding that when you
held constant for time in the workforce, task on job,
commitment to a career and these are some of the brightest men
and women in the world who are physicists and mathematicians
and chemists and everything else, there were still
discriminatory effects that to their credit, some of the
institutions have been willing to face and begin to try to
address.
So the Paycheck Fairness Act does three things. First, it
does create strong penalties to punish those who violate the
Equal Pay Act and it makes it illegal for employers to punish
women who ask around about salaries. One of the things that
I've tried to do is to put on my Web site a guide to helping
women negotiate because a lot of women are somewhat shy or
reserved about negotiating over salaries and they feel that
they're just unequipped to go in and ask for higher pay or to
raise the fact that somebody they know, they're working with,
doing a similar job or a comparable job or the same job, is
getting paid more. And very often, employers punish employees
for finding out or trying to figure out what the salaries are.
Second, the Federal Government should be a model employer
in enforcing Federal employment laws and will, under the
Paycheck Fairness Act, be asked to use every weapon in our
arsenal to ensure that women get paid the same amount as men
for doing the same job. That includes re-instating the
collection of gender-based data in the current employment
statistics survey, something that was discontinued under the
Bush administration. So we actually have up-to-date numbers
showing how this issue is impacting our female employees across
the country.
Tax dollars should be used to bridge the equal pay gap, not
make it wider and finally, I do want to provide ways to help
women strengthen their negotiation skills, to help them stop
discrimination before it starts or certainly to prevent it from
continuing and as Senator Harkin showed us on that graph, we
have a lot of work to do to get back an economy that produces
good wages for everybody, with rising incomes.
This is a part of that puzzle because we certainly should
not allow discrimination against women who are not only
supporting themselves but very often, contributing to the
family support or being the sole support of a family. But it is
in the interests of all of us, men and women and mothers and
fathers and daughters and sons to really set the goal of
finally achieving equal wages for equal work.
So I want to thank Senator Harkin for his dedication to
this issue and look forward to working with him to finally
achieve the goal that we both share.
Senator Harkin. Thank you very much, Senator Clinton.
Senator Reed.
Statement of Senator Reed
Senator Reed. Very briefly, Mr. Chairman. I think this is
an incredibly important topic, the gap between the wages and
income of women and men is something that we have to explore,
especially in the context of stagnant income for working
Americans, both male and female. So this is a very appropriate
topic and at a very critical moment. Thank you, Mr. Chairman.
Senator Harkin. Thanks, Senator Reed.
Senator Murray.
Statement of Senator Murray
Senator Murray. Thank you, Mr. Chairman. I'll submit my
statement for the record because I know you want to get to your
witnesses. I really appreciate you having this hearing.
This work is really important. It affects not just women
but their families. It's an issue of fairness. No one should
have to face discrimination in the workplace. For women, the
lifetime earnings that it impacts also impacts their families.
This issue is critical and I'm proud to be a cosponsor of both
pieces of legislation and look forward to what our witnesses
have to say. I think that for both men and women, this is
important.
Women's financial contributions to their families make a
difference. We know that--studies have shown that poverty rates
for single mothers could be cut in half if we have fair wage
laws and I hope that we can move legislation in this Congress
to again focus on that.
For all of the men in my family, they know that without a
women's income, their family would have had much tougher
choices to make. This is about fairness and pay equity. It's
about disparity, it's about our sons and our daughters and it's
a critical hearing and I really appreciate it. Thank you.
[The prepared statement of Senator Murray follows:]
Prepared Statement of Senator Murray
Thank you, Mr. Chairman, for calling this hearing to
examine the persistent barriers to equal pay for women in the
workforce. I want to thank our witnesses for being here today
and for their contribution to our discussion.
For me, this is a question of fundamental fairness. No one
should have to face pay discrimination in the workplace. It's
unfair and unacceptable.
I think it's important to recognize that the wage gap
doesn't just hurt women. It hurts their children and their
spouses too, so everyone has a stake in ending this
discrimination. In a national study, the Institute for Women's
Policy Research and the AFL-CIO found that, collectively,
America's working families are losing $200 billion in income
each year as a result of the on-going gender wage gap. And
their study accounted for differences in other factors like
age, education, and hours worked.
That amounts to an average annual loss of $4,000 for each
working woman's family. Imagine what parents and spouses could
do with this lost income and the dramatic effect that equal pay
would have on individual families.
It's not just women who would benefit from equal pay.
According to the same study, equal pay would equate to a
reduction in poverty rates for women and their families.
Poverty rates for single mothers would be cut in half. Imagine
that--we could lift half of working single mothers out of
poverty by ending gender wage discrimination. The poverty rates
of married working women would fall by more than 60 percent.
It's clear to me and to America's working families that this
issue should be important to all of us, whether we are male or
female.
Throughout history, women have played a vital role in our
economic prosperity although they haven't always received equal
reward for their work. Since the passage of the Equal Pay Act
of 1963, women have made great strides in narrowing the wage
gap. In 1963, a woman working full-time, year-round, earned
just 58.9 percent as much as her male counterpart.
Unfortunately, that number has only increased to 77 percent as
of 2005.
Clearly, barriers to equal pay still persist in today's
labor market. It's time to confront these barriers and find out
what we can do to make equal pay a reality for working women
and their families.
I'm proud to co-sponsor the Paycheck Fairness Act and the
Fair Pay Act--two important pieces of legislation that will
help eliminate some of these barriers. I'm especially pleased
that these bills enhance enforcement and encourage businesses
to be forward-thinking in this area.
The Paycheck Fairness Act prohibits employer retaliation
against employees who freely share salary information with one
another. It allows women who have experienced discrimination to
recover more than just back pay for lost wages. It calls for
the government to enhance outreach and training efforts with
employers and calls for more data about wage disparities. It
also supports women as they individually confront these
barriers by establishing a negotiation skills training program.
Equally important, the Fair Pay Act addresses ethnic and
racial discrimination encountered by women of color. It
requires businesses to provide equal pay for jobs of comparable
value and allows workers discriminated against because of
gender, race, or national origin to file a complaint.
Finally, these bills recognize exemplary employers who are
making positive strides in equal pay by establishing a national
award program.
Unfair discrimination in the workplace should not be
tolerated in any form. As a mother and a grandmother, I want my
children to live in a country where my daughter can earn just
as much as my son. It's time to address this issue and finally
close the wage gap for working women and their families.
Senator Harkin. Thank you, Senator Murray. Before I
recognize our witnesses, I just want to make it very clear for
the record that it was due to the input and the demands of
Senator Clinton that we're having this hearing. It was Senator
Clinton who really led the charge on making sure we pulled this
hearing together and that we highlighted this issue at this
time.
If I'm not mistaken, I think April 24--is that not right?
Senator Clinton. The Equal Pay Day.
Senator Harkin. The Equal Pay Day. It takes women--how do I
say it? It takes them that much longer to earn what men earn up
to April 24 than what men would make for the remainder of the
year. Anyway, the math alludes me. But anyway, I think we know
what we're talking about.
[Laughter.]
But I want to thank Senator Clinton for her great
leadership on this issue and for bringing us together today and
insisting that we have this hearing.
All of your statements will be made a part of the record in
their entirety. I think you were informed by our staff--I'd
like to ask if you could each go for 5 minutes. We'll have a
clock here. If you run a minute over or so, I'm not going to
get too disturbed about that. If you run 5 minutes over, we
might start getting anxious. But if you could, just give us the
basic premise of your testimony and then we can open it up for
discussion and questions.
What I'll do is I'll just go from one end down to the other
and I'll recognize first of all, Barbara Brown and let me make
sure I get my proper papers out here. An attorney with Paul
Hastings in Washington, DC., Ms. Brown, welcome to the
committee and please proceed as you wish for 5 minutes or so
and then we'll go on.
STATEMENT OF BARBARA BROWN, ATTORNEY, PAUL HASTINGS,
WASHINGTON, DC.
Ms. Brown. Thank you, Senator and good afternoon to all of
you who are here. Thank you very much for inviting me to speak.
I am an employment lawyer and a Partner and Office Chair at
Paul Hastings here in Washington as well as the Vice Chair of
the American Bar Association Labor and Employment Law Section
of 21,000 members.
I'm involved in discrimination and employment law issues
all the time and I'm very opposed, vehemently opposed to pay
discrimination and gender bias of all sorts. But I believe that
there are already tools in place to handle it.
We have Title VII of the Civil Rights Act as amended in
1991 to provide an attack both on intentional discrimination,
where it may be found with compensatory and punitive damages
and with a disparate impact theory where there is a neutral
practice that has a disproportionate impact on a protected
class. We have the Equal Pay Act of 1963 for individuals who
believe that a co-worker or perhaps a predecessor in the same
job is being paid--was paid or is being paid more based on
gender.
Businesses know these rules. The courts enforce these
rules. I am heartened and I am frequently called upon by my
clients as you all have mentioned, to review their pay
practices and to be sure that they are consistent with the law
both because the Office of Federal Contract Compliance Programs
is working to enforce compensation nondiscrimination principles
because of private litigation and because they are in a battle
for the best talent and they know that they need to remain
competitive in order to get it.
Second of all, compensation is very complex, much more so
than most other personnel decisionmaking. We see multiple
regressions in statistical studies, well accepted as the proper
methodology in this area by the courts and what they show is
that you can't look only at broad generalizations or broad
factors.
You've got to look at particular workforces--what skills,
what experiences, what willingness to travel, to relocate, to
work late--make a difference among all the employees. Men, as
compared to one another as well as men and women and employers
need both the flexibility and the nimbleness to be able to pay
what it takes to succeed in the market. It's important not to
overly constrain that requirement with recordkeeping and
burden.
Third of all, I think that what we're after here is
equality of opportunity, not dictating results based on
hypothetical or abstract notions of what ought to be paid the
same. The market has been remarkably successful, whether you're
talking about IT or heavy construction or financial analysts or
whatever it may be, in driving talent where the opportunity and
in adjusting pay appropriately and what we need to do is make
sure and I believe employers are making every effort but laws
are available if they're not, that women have every opportunity
to get the skills they want, make the choices they want, work
as hard as they want, work where and how they want.
General observations about this particular law and why I
think it is unwise--very briefly, four points. First, the law
has always said that employees need to be similarly situated in
order to be fairly compared for purposes of pay. This law will
eliminate two key concepts. One, the notion that employees must
be in the same establishment to be working at equal work and
that seems to me, fundamental. If you're talking--whether it's
Wyoming, Iowa or New York City, you've got to look at that
market, not only that geographic market but that employment
market in terms of what skills are in demand there and what
drives pay in that place. To take that requirement out would be
wrong-headed.
Second, the defense, the broad catchall defense in the
Equal Pay Act of any other factor other than sex being
available to justify differences is critical. Because of the
numerous factors that make a difference in pay and the very
difficult if not impossible burden employers would face in
contemporaneously keeping records of how one team performed
against another team or how a supervisor's skills in the
profession that he or she is supervising make that person a
more valuable manager than someone else would be virtually
impossible. So to impose all the requirements that are in this
bill would essentially force employers to do nothing but cave
in rather than defend perfectly legitimate distinctions.
Third of all, procedurally in two respects, the bill goes
awry in my view. It imposes unlimited punitive and compensatory
damages on pay differences with no requirement that there be
any discriminatory intent. Title VII draws a clear requirement
of willful or reckless disregard for federally protected
rights. This has no such requirement. The Supreme Court has
repeatedly said as recently as last term, you must--if you're
going to have punitive damages, have reprehensibility and there
must be proportionality to the reprehensibility of the conduct.
This bill has none of that constitutional protection in it.
Last, it flips class action law under the Equal Pay Act on
its head. Equal pay, by definition, is a highly individualistic
inquiry into whether two particular individuals are doing the
same work, equal work. Class actions are by definition, looking
at common policies or practices. Title VII far more suited in
those instances where there are such differences.
Last but not least, I think that the provisions that would
create retaliation causes of action would just do nothing more
than invite employees to have a conversation and then when they
saw some sort of adverse personnel action happening, claim that
they were protected. The courts are drowning in retaliation
cases. They are ruling on the legitimate ones. I don't think we
ought to be adding another vague and over-broad category.
All that said, I'm as firmly committed to eradicating
discrimination where it is. I think that many in the cases that
I'm involved in, many of the differences that initially look
suspicious or worrisome turn out to be perfectly legitimate
when a close look is given. I think this bill is the wrong way
to go about solving our problems, to the extent they remain.
Thank you very much.
[The prepared statement of Ms. Brown follows:]
Prepared Statement of Barbara Berish Brown
I am here today to testify about S. 766, the Paycheck Fairness Act.
I am a practitioner in the area of employment law, handling issues and
matters across the broad span of employment discrimination and
personnel practices. I have counseled and defended employers with
respect to such issues for the past 27+ years. Among the issues that I
have handled and considered is compensation discrimination and class
actions. I am Vice-Chair of the 21,000 member Labor & Employment Law
Section of the American Bar Association and a Fellow of the American
College of Labor and Employment Lawyers. I am co-author of Equal
Employment Law Update (BNA 7th ed. Fall 1999) and The Legal Guide to
Human Resources (Thomson/West Supp. 2006). I speak and write frequently
on employment law topics. I am chair of the Washington, DC. office of
Paul, Hastings, Janofsky & Walker LLP.\1\ Paul Hastings has over 1,100
attorneys internationally and over 130 attorneys in our Washington
office.
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\1\ The views expressed in this paper are my own.
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I am firmly and unequivocally committed to the eradication of
compensation discrimination against women. S. 766 is not the way to do
it. I believe that effective legal tools are in place to accomplish
that goal and that S. 766 will impose substantial, costly burdens on
employers that are unnecessary, unrealistic and indefensible. The
provisions of Title VII of the Civil Rights Act of 1964, as amended,
and of the Equal Pay Act of 1963 cover the area of compensation
discrimination. I see no reason to change the underlying substantive
law concerning compensation, as S. 766 would do in various mischievous
ways. Nor do I see a need to loosen the procedural rules that govern
class action lawsuits concerning alleged gender bias in compensation.
That also would lead to undesirable results.
All that the proposed changes will do is encourage more employment-
related litigation, which is already drowning the Federal court docket,
and make it much more difficult, if not impossible, for employers,
particularly small businesses, to prove the legitimate non-
discriminatory reasons that explain differences between the salaries of
male and female employees.
If the goal of this committee is to increase the compensation of
women, then the committee's focus is better spent on creating
opportunities for women to choose whatever jobs they want, including
those that the market rewards with high levels of pay. The amount an
employee earns depends a lot on the choices that employee makes (or is
able to make) about her career paths: the amount and type of education
received, training undertaken, hours worked, family obligations, prior
experience, personal goals, ability to relocate, frequency and duration
of time out of the labor force, willingness to commute, and similar
factors. All of these choices greatly influence employee compensation.
Many of these factors are outside the control of employers. But many
are not outside the scope of meaningful government programs that serve
to promote access to jobs that pay more. That expertise is within the
ambit of Congress and the Executive Branch, not the judiciary.
Education and training are of primary importance. Women need to be
provided with opportunities and incentives for education and training
that will lead to jobs that pay more. The market is the best way to set
pay that we have. We should not manipulate the market by setting
salaries for IT or mining jobs, as S. 766 seeks to do, but we should
examine the market for trends on the best paying jobs and focus
government education and training programs on those areas.
Several broad observations underlie my views:
1. Current Law Is Reliable And Effectively Remedies Discriminatory
Practices.--The law on compensation discrimination under the Equal Pay
Act and Title VII is fairly well settled. That reliability plays a
positive role in attaining compliance with those established principles
by the employer community. Employers take compensation discrimination
very seriously. They are keenly aware that the failure to take steps to
eliminate unexplained compensation differences may lead to litigation
that will result in tarnished public image, loss of valuable employees,
costly legal fees, and judicial intervention in their business
practices, all of which subtract from the bottom line. Even without the
threat of litigation, employers are witnessing major changes and shifts
in our tight (and increasingly mobile) labor market. In order for
businesses to survive, employers across all industries are committing
vast resources to recruitment and diversity initiatives to attract,
retain and train minority and female talent. Without a doubt,
competitive compensation is central to achieving these labor goals.
But, as explained below, the setting of compensation is complex and
requires consideration of numerous factors.
2. S. 766 Ignores The Complex Realities Of Compensation
Determinations.--My experience has taught me that compensation is a
very complex area as compared to most other types of personnel
decisions. Many different factors play a part in determining salary
level. Investigating to find out what skills and experiences are most
highly valued by a particular employer and then looking at how those
factors can he isolated and quantified is not easy. For example, in a
newspaper setting, the number of bylines or front page articles may
well be a proxy for the most highly performing employee, and
correlating such information to the pay of a group of reporters may
well explain the higher salaries of some of them. Or, in a company
where certain kinds of professional skills are most highly valued,
managers who came from the ranks of those professionals will typically
be paid more highly than other managers, who may have come to that
position from administrative jobs.
Regression analysis is the tool that allows an employer to find out
what explains differences in pay. This is the method of analyzing pay
of a group of employees that has been approved by the courts as the
best method of ascertaining whether differences are explained by job-
related factors or remain unexplained, perhaps attributable to a
protected characteristic. When we do such an analysis, we typically
find that most, if not all, of the difference is explained by a myriad
of non-discriminatory factors including:
length of experience in the workforce altogether;
length of service with the current employer;
length of time in job;
length of time in the job type (e.g. certain kinds of
professional experience);
whether there were significant breaks in service;
prior job-related experience;
skills; and
education.
These factors explain the differences in pay among employees
without regard to gender, and they often explain the differences in pay
between men and women, on average, as well.
One thing that is very clear is that simplistic comparisons between
pay for incumbents of different jobs, with different levels of
seniority and different skills, without taking those factors into
account, is comparing apples and oranges. To say by fiat that men and
women have equal amounts of all those qualities, and therefore that
their pay should be equal, is to ignore reality. Indeed, through our
own personal experiences as employees in the labor market, common sense
tells us that these factors cannot be separated from the way we are
compensated. S. 766 brushes aside their importance eventhough they form
the fundamental core to compensation determinations.
3. S. 766 Leaves Employers Legally Defenseless, Imposes Uncertain
Punitive Damages, and Creates Unmanageable Class Actions.--An agenda of
equalizing the pay of men and women, without regard for their job
content, the market for their type of work and, the choices they made
in the past concerning the salary they would work for, their education,
and the fields they chose to work in, is something far different from
working to eliminate discrimination.
With these thoughts in mind, I have grave concerns about the
provisions of S. 766, the Paycheck Fairness Act. My concerns must be
viewed in light of the fact that there is no requirement to find
intentional discrimination before liability is imposed under the Equal
Pay Act. Therefore, if the defenses to a prima facie case are
eliminated or weakened, the act would hold the current employer liable
for differences that grew up in the far distant past, perhaps because
of the acts of prior employers or because of the choices made by the
employee with respect to her preferred job, salary, training and
education. These are circumstances outside the current employer's
control, and it is illogical and unfair to impose liability on it. Some
of these factors may be legitimate bases for pay differences, as
different fields, with their different amounts of supply and demand,
opportunities for public versus private employment, and terms and
condition of work, are properly compensated differently.
Overall, the bill is aimed at destroying the requirement, which is
the cornerstone of current compensation discrimination law, that two
employees must be similarly situated but paid differently before there
is liability. Under the Equal Pay Act, the men and women being compared
have to be performing jobs with equal or substantially equal content in
the same establishment. S. 766 removes these requirements. First, it
eliminates the ``establishment'' requirement--that the employees being
compared work in the same establishment or geographic market.
Therefore, employees in different locations, with different markets and
different cost-of-living, will be able to cite a comparator in another
location to prove their case. An employee working for Company X in
Topeka, Kansas, will be able to cite a comparator in Company X's New
York City location to prove her case of compensation discrimination. On
these basic facts, it is indisputable that economic and labor
circumstances are vastly different in Topeka than they are in New York
City and the alarm bell should signal loudly that such a comparator
provides dubious probative value as to whether the employee suffers
from compensation discrimination. S. 766 will drive employers to pay
the same amounts across geographic markets even if the salary scale for
different jobs is quite different, because a woman in the lower-paid
market will otherwise have a viable case. Of course, it may be possible
for the employer to make out a defense to such a charge at great
expense and burden, but we have to consider the incentives that
legislation of this sort creates to change compensation systems in
order to avoid a deluge of litigation.
The scope of the fourth defense to a prima facie case, ``any other
factor other than sex,'' is dramatically reduced in S. 766. Because pay
is so complex and depends so much on what an employer needs to pay at a
particular point in time in order to meet business exigencies, the
fourth affirmative defense has been (properly) broad and open-ended.
Consider a reduction in force, where some managers are demoted to a
professional job but are held at their managerial salaries for some
period of time. Justifying this kind of factor would be very difficult
if not impossible under S. 766, yet it makes eminent good sense and
serves an equitable purpose. This kind of personnel decision would make
the employer vulnerable to being ordered to raise the salaries of all
the women in the professional job to the level of the former managers.
The hoops that are created for the fourth defense by S. 766 make it
virtually impossible for an employer to prove the legitimacy of its
compensation decisions. By requiring that the employer prove that any
such factor is objective, job-related, and was ``actually applied and
used reasonably'' in light of the justification for its use, the bill
essentially eliminates the defense. The bar has been raised so high
that employers will be doing nothing but keeping records and doing
studies to justify each compensation decision, or they will give in and
abandon perfectly legitimate pay practices. The changes in this defense
will essentially eliminate the market as a defense to pay differentials
unless detailed contemporaneous data is collected to show how the
external market influences require a particular job or group of jobs to
be paid more than other jobs, if those latter jobs are held
predominantly by women.
No one who has tried to recruit information technology employees
can reasonably quarrel with the fact that the market for people with
their skills and experience is far different than that for financial
analysts, who may have had as much education and experience as the IT
folks. Yet, merely if the IT employees are more heavily male than the
analysts, a presumptive violation of the law will occur. S. 766 will
therefore tend to result in the same pay for employees in widely
varying jobs. Many compensation systems are driven by a relationship to
the market price for benchmark jobs, and depriving employers of the
ability to defend the salaries of individual employees by referring to
the market for that position will require wholesale revamping of those
compensation systems. The market has worked very well to motivate
people to acquire the skills and take the jobs for which there is a
need; this bill will interfere with those incentives and produce
inefficiency and waste. The net bottom line effect of the elimination
of the establishment basis for comparison and the narrowing of the
fourth defense is to require that the pay for more and more jobs and
employees be equalized, no matter how even-handed the employer has been
treating the employees.
S. 766 permits the award of unlimited compensatory and punitive
damages. Moreover, it does so without articulating any heightened
standard of liability for the award of punitive damages. This destroys
the compromises that resulted in the Civil Rights Act of 1991 and makes
no sense in light of the standards typically required to be met before
punitive damages can be justified. Under title VII, there has to be a
finding of malice or reckless disregard for the federally protected
rights of the aggrieved individual before punitive damages can be
imposed. That makes sense because these damages are intended to punish
a state of mind that resulted in the discriminatory act.\2\ To permit
punitive damages in the absence of any finding of intentional
discrimination at all, never mind the absence of malice, would be to
misuse that type of damages just to provide unlimited awards against
employers. Under current law, good faith provides a defense to the
imposition of liquidated damages, and that is appropriate. Moreover,
unlimited compensatory damages for pay violations seems very out of
place.
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\2\ In failing to provide any heightened standard of liability for
the award of punitive damages, S. 766 sets itself on a collision course
with Supreme Court precedent and predictably invites years of wasteful
constitutional challenge. In one of the leading cases on punitive
damages, Justice Stevens stated that ``[p]erhaps the most important
indicium of the reasonableness of a punitive damages award is the
degree of reprehensibility of the defendant's conduct . . . punitive
damages my not be `grossly out of proportion to the severity of the
offense.' '' BMW v. Gore, 517 U.S. 559, 575-76 (1996). Writing for the
majority, he made clear that in the award of punitive damages
``aggravating factors associated with particularly reprehensible
conduct'' must be present. Id. S. 766 is devoid of any guidance on the
standard of liability for punitive damages, leaving it vulnerable to
being overturned after years of litigation and uncertainty for
employers.
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The class action rules under the Equal Pay Act are also changed by
this legislation. At present, employees can file an ``opt-out'' class
action under title VII. However, they will have to be able to show some
intentional discrimination in order to proceed with a jury trial and
seek compensatory and punitive damages. This generally requires showing
some central policy or practice that affects the whole class and that
is imbued with intentional bias against women. (A disparate impact
challenge to a specific identified compensation policy may be
permissible, but such a case would be tried to the court without the
availability of compensatory or punitive damages.) The area of pay is
rife with individualized decisionmaking, and it is typically not
amenable to class treatment. This is particularly true when a plaintiff
in an EPA case has to show that a man is doing equal work in order to
recover. That is a highly individualized and fact-specific finding. It
only makes sense in such a situation for individuals who truly believe
that they are being illegally underpaid as compared to a male co-worker
to join the suit. Making such suits opt-out cases with unlimited
punitive and compensatory damages for all class members will force
employers to settle rather than litigate, even when the company has
meritorious defenses, because every female employee would purportedly
be a member of such a class. In light of recent decisions questioning
the viability of class actions seeking individualized punitive and
compensatory damages in situations where there is a need to litigate
each individual's situation separately, it makes no sense to write
another law providing for just such unwieldy and unmanageable cases.
That is not good law nor good policy.
S. 766 directs the Department of Labor to issue guidelines to
enable employers to ascertain which jobs are ``equivalent'' for
purposes of the equal pay law. This means that the Department is being
asked to group jobs which are not of similar content, but which require
similar education or skill, in order to require that they be paid the
same. The explicit goal of this section is to require the payment of
equal amounts to jobs held ``predominantly by men and those held
predominantly by women'' despite the different job content, market, and
other dimensions of those jobs. This is nothing more than the
discredited ``comparable worth'' theory in new clothing. It authorizes
grouping jobs based not on their constituting equal work or not on
differences in pay being driven by a protected characteristic-like
gender, but based on a study of equivalency which is driven by the goal
of making all ``male-dominated'' and all ``female-dominated'' jobs pay
the same. This is misguided and should not be countenanced.
The bill also instructs the Department of Labor to reject the use
of multiple regression analysis and instead to utilize more simplistic
comparisons to draw a conclusion that discrimination is at work. This
is utterly backwards and rejects well-established precedent and basic
statistical principles. The Office of Federal Contract Compliance
Programs issued compensation guidelines in early 2006, and Federal
contractors have been following those guidelines as they monitor their
compensation. This guidance was issued only after years of
consideration of the most effective and accurate way of assessing pay
differences in order to determine whether women are underpaid as
compared to similarly situated men. I do not agree with all of the
elements of the compensation guidance, but in its adherence to multiple
regression analysis as the proper way to study pay differences, as
compared to merely comparing the median pay of men and women in a
salary level or grade. The bill would represent a major step backwards
in terms of securing widespread consensus on the best way to analyze
pay and take remedial steps if warranted.
For all these reasons, I am opposed to this legislation. I believe
in the eradication of discrimination. I believe that our current laws
work to meet that end. Furthermore, the better course would be to
encourage employers to audit their pay systems, through the use of
regression analysis, to make training available so the women can enter
any job and field of endeavor they wish to pursue, to root out true
discrimination, and to provide them with some incentive for doing so.
Enforcement dollars and effort should go into attacking discrimination
and not into DOL's creation of a template for what employers should pay
to their employees based on a formula intended to guarantee equal pay
for male and female employees despite valid and objective differences
in the markets, skills, and other factors that explain pay levels.
Senator Harkin. Thank you very much, Ms. Brown. Now we turn
to Jocelyn Samuels, Vice President for Education and
Employment, National Women's Law Center, Washington, DC.
Ms. Samuels.
STATEMENT OF JOCELYN SAMUELS, VICE PRESIDENT FOR EDUCATION AND
EMPLOYMENT, NATIONAL WOMEN'S LAW CENTER, WASHINGTON, DC.
Ms. Samuels. Thank you so much, Senator Harkin and members
of the committee for chairing this hearing today and being here
and for all of your leadership on this issue. I'm delighted to
be here to testify in support of both the Paycheck Fairness Act
and the Fair Pay Act because I think they address very
important issues and real problems with the current law.
I want to make a few basic points about the operation of
the law but first note that not only do I agree with the
comments that each of you have made about the wage gap in some
significant measure, reflects continuing discrimination against
women but also note that even those factors that are sometimes
cited as non-discriminatory rationales, themselves can embody
barriers and discrimination that women have faced in the past.
So, for example, the length of time that a woman has worked
in a particular industry may not, in fact, be a product simply
of her choice but a barrier that she has faced in entering that
industry. Similarly, women who take time off for childcare
needs because their family decides that as the lower income
earner of the family, she can more easily give up her job to
the demands of childcare, are women who face barriers in the
workforce that are not non-
discriminatory.
To excuse the wage gap on the basis of these kinds of
decision, I think, misconceives the nature of the decisions
that women are sometimes forced to make in the workplace.
I'd also like to say in response to Senator Enzi that we
firmly support getting women into non-traditional jobs and
industries and areas from which they've traditionally been
excluded but I think what is critical here is to ensure that
women are paid fairly and equitably, no matter the job they do,
whether they are childcare workers or house cleaners or
engineers or CEOs. And contrary to Ms. Brown's impressions, I
firmly disagree.
The focus of my testimony today is that far from being
reliable and effective, current law is simply inadequate to
address the wage disparities that women face today and I say
that's so for four reasons.
First, courts have applied the law in ways that make it
exceptionally difficult for plaintiffs to prove that they have
been subject to wage discrimination, even in circumstances
where disparities are clearly based on facts. Initially, a
plaintiff has to show that she has been paid less than a
specific comparator of the opposite sex who holds a job that
requires equal skill, effort, responsibility and it is
performed in the same establishment. That is, to say a distinct
physical place of business, separate and apart from other
locations of the company that may be just a few miles down the
road. Even the jobs compared need not be identical, moreover,
courts have allowed purely minor differences in job functions
to defeat a plaintiff 's showing.
In addition, the factor other than sex defense that Ms.
Brown mentioned has been construed by some courts in ways that
open the door to perpetuation of the very types of sex
discrimination that the Equal Pay Act was intended to prohibit.
Although the Supreme Court long ago, more than 30 years
ago, rejected the argument that market forces--that is, the
perception that men will only work for more or command greater
bargaining power could be a defense to pay violations. Courts
have authorized, excuse me, employers to pay male employees
more than similarly situated female employees based simply on
the higher prior salaries that those male employees have
earned. As one court has said, moreover, an employer can
permissibly continue to pay a transferred or a reassigned
employee his or her previous higher wage, even though the
current work may not justify that higher wage.
The problem with these cases is their failure to recognize
that the prior salary earned by a male comparator may itself be
the product of sex discrimination or may simply reflect the
residual effects of the traditionally enhanced value that is
attached to work performed by men.
Some courts have applied a similarly blinkered approach to
evaluating the legitimacy of an employer's claim that a male is
being paid more based on his prior experience or education,
accepting that argument without examining whether those
qualifications are, in fact, related to the job under
consideration. Several courts have accepted the notion that any
factor that is not explicitly based on sex is a permissible
defense under the law, no matter how tenuous its relation to an
employer's legitimate business purposes.
Because these basis for decisionmaking can so easily mask
criteria that are, in fact, at bottom, grounded on sex, these
cases undermine the spirit of the EPA and the court's failure
to engage in the kind of searching analysis that I think
Congress intended when it passed the EPA now more than 40 years
ago, further circumvents the burden that Congress intended
those employers to bear.
Second, the Equal Pay Act procedures and remedies, I think,
offer insufficient protection for women who are the victims of
wage discrimination. Unlike those who challenge wage
discrimination based on race and ethnicity, who are already
authorized to recover unlimited compensatory and punitive
damages for the injuries that they have suffered, women under
the EPA receive only back pay and in a limited number of cases,
liquidated damages. Those recoveries tend to be insubstantial
and insufficient to compensate women for the discrimination
they have suffered. They are also insufficient to operate an
effective deterrent for employers because the recovery simply
isn't enough of a penalty to encourage them to take the kinds
of steps we'd like to see to root out continuing and systemic
wage discrimination.
In addition, procedures for enforcing the Equal Pay Act
hamstring plaintiffs who are attempting to prove systemic wage
discrimination. Unlike other civil rights claims where
plaintiffs are authorized to bring class actions and have
people opt out, under the Equal Pay Act, plaintiffs have the
burden of searching out plaintiffs who will opt in, which is a
substantial burden that decreases participation.
Third, nothing in the Equal Pay Act addresses disparities
that are premised on occupational wage segregation. Many
occupations today are segregated based on gender and reflect
artificially suppressed wages.
Finally, there is insufficient information available to
people and the government collects no such information today to
enable the government or individuals to know what employers are
paying to others in the workforce.
The Paycheck Fairness Act and the Fair Pay Act would
address these problems in targeted and appropriate and critical
ways and I think it is extremely important for Congress to act
expeditiously to pass both of them. Thank you so much.
[The prepared statement of Ms. Samuels follows:]
Prepared Statement of Jocelyn Samuels
Chairman Kennedy, Ranking Member Enzi and members of the committee,
thank you for this opportunity to testify on behalf of the National
Women's Law Center on ``Closing the Gap: Equal Pay for Women Workers.''
More than 40 years after enactment of the Equal Pay Act of 1963, equal
pay for women is not yet a reality in our country. While progress
toward that goal has been made, women working full-time year-round
still earn only about 77 cents for every dollar earned by men--and
women of color fare significantly worse. There is not a single State in
which women have gained economic equality with men, and gender-based
wage gaps persist across every educational level.
The evidence shows that these gaps cannot be dismissed simply as
the result of women's choices or qualifications. Indeed, substantial
evidence demonstrates that discrimination and barriers that women face
in the workforce must shoulder blame for the wage disparities women
endure.
Because these gaps are neither fixed nor immutable, there is much
that Congress can do to realize the promise of the Equal Pay Act. In
particular, Congress should expeditiously enact the Paycheck Fairness
Act introduced by Senator Clinton and Representative DeLauro, and the
Fair Pay Act, introduced by Senator Harkin and Representative Holmes
Norton. These bills strengthen current laws against wage discrimination
and require the government to step up to its responsibility to prevent
and address pay disparities. Enactment of these bills is critical to
ensure that women have the tools necessary to achieve the pay equity
that has too long been denied them.
THE WAGE GAP REFLECTS SEX DISCRIMINATION
The wage gap cannot be dismissed as the result of ``women's
choices'' in career and family matters. In fact, recent authoritative
studies show that even when all relevant career and family attributes
are taken into account--attributes that themselves could reflect
underlying discrimination--these factors explain at best a minor
portion of the gap in men's and women's earnings.
A 2003 study by U.S. Government Accountability Office
(then the General Accounting Office) found that, even when all the key
factors that influence earnings are controlled for--demographic factors
such as marital status, race, number and age of children, and income,
as well as work patterns such as years of work, hours worked, and job
tenure--women still earned, on average, only 80 percent of what men
earned in 2000.\1\ That is, there remains a 20 percent pay gap between
women and men that cannot be explained or justified.
One extensive study that examined occupational segregation
and the pay gap between women and men found that, after controlling for
occupational segregation by industry, occupation, place of work, and
the jobs held within that place of work (as well as for education, age,
and other demographic characteristics), about one-half of the wage gap
is due solely to the individual's sex.\2\
Studies like these are borne out by case after case, in the courts
and in the news, of suits brought by women charging their employers
with wage discrimination. The evidence shows that sex discrimination in
the workplace is still all too prevalent. Recent examples of pay
discrimination cases include:
In the largest employment discrimination suit ever filed,
female employees have sued Wal-Mart for paying women less than men for
similar work and using an old boys' network for promotions that
prevented women's career advancement. One woman alleged that when she
complained of the pay disparity, her manager said that women would
never make as much as men because ``God made Adam first.'' Another
woman alleged that when she applied for a raise, her manager said,
``Men are here to make a career, and women aren't. Retail is for
housewives who just need to earn extra money.'' \3\ The Ninth Circuit
recently reaffirmed the case as a class action on behalf of more than
1.5 million women who are current and former employees of Wal-Mart.\4\
In February 2007, a Federal judge approved a $2.6 million
settlement against Woodward Governor Company for gender discrimination
with respect to pay, promotions and training. The EEOC sued the global
engine systems and parts company on behalf of female employees working
at two of the company's plants. Pursuant to the terms of the agreement,
an outside individual will oversee the company's implementation and
compliance, including the development of written job descriptions for
the positions at issue as well as performance appraisals and a
compensation review process.\5\
In 2004, on the eve of trial, investment house Morgan
Stanley agreed to settle a sex discrimination class action filed by the
Equal Employment Opportunity Commission alleging that the investment
firm paid women in mid- and upper-level jobs less than men, passed
women over for promotions, and committed other discriminatory acts.
Although it denied the allegations, Morgan Stanley did agree to pay $54
million to the plaintiffs and to take numerous other actions to prevent
discrimination in the future.\6\
In 2004, Wachovia Corporation admitted no wrongdoing but
agreed to pay $5.5 million to settle allegations by the U.S. Office of
Federal Contract Compliance Programs that it engaged in compensation
discrimination against more than 2,000 current and former female
employees over 6 years.\7\
Clearly, sex discrimination plays a major role in producing and
sustaining the wage gap for women. It is thus hardly surprising that
public opinion surveys consistently show that ensuring equal pay is
among women's top work-related priorities. For instance, 9 in 10 women
responding to the ``Ask a Working Women Survey'' conducted by the AFL-
CIO in 2004 rated ``stronger equal pay laws'' as a ``very important''
or ``somewhat important'' legislative priority for them.\8\ Similarly,
a January 2007 national survey of 1,000 unmarried adult women by
Women's Voices Women Vote found that 73 percent of respondents said
that support for pay equity legislation would make them ``much more
likely'' to support a congressional candidate.\9\
CURRENT LAW IS INADEQUATE TO ADDRESS THE WAGE GAP
In 1963, President Kennedy signed the Equal Pay Act into law,
making it illegal for employers to pay unequal wages to men and women
who perform substantially equal work. At its core, the Equal Pay Act
bars employers from paying wages to an employee at an establishment
at a rate less than the rate at which he pays wages to
employees of the opposite sex in such establishment for equal
work on jobs the performance of which requires equal skill,
effort, and responsibility, and which are performed under
similar working conditions . . . \10\
Under the EPA, a plaintiff must establish a prima facie case by
showing that ``(1) the employer pays different wages to employees of
the opposite sex; (2) the employees perform equal work on jobs
requiring equal skill, effort and responsibility; and (3) the jobs are
performed under similar working conditions.'' \11\ If the plaintiff
succeeds in demonstrating each of these requirements, the defendant
employer may avoid liability by proving that the wage disparity is
justified by one of four affirmative defenses--that is, that it has set
the challenged wages pursuant to ``(1) a seniority system; (2) a merit
system; (3) a system which measures earnings by quantity or quality of
production; or (4) a differential based on any other factor other than
sex.'' \12\
Congress intended the Equal Pay Act to serve sweeping remedial
purposes. As the Supreme Court has recognized, the act was designed:
to remedy what was perceived to be a serious and endemic
problem of employment discrimination in private industry--the
fact that the wage structure of ``many segments of American
industry has been based on an ancient but out-moded belief that
a man, because of his role in society, should be paid more than
a woman even though his duties are the same.\13\
Unfortunately, and for several reasons, the Equal Pay Act has
failed to meet Congress' remedial goals. First, the substantive
standards of the law--both with regard to a plaintiff 's prima facie
case and with regard to an employer's affirmative defenses--have been
applied by courts in ways that make it difficult to demonstrate a
violation of the law, even in cases where wage disparities are based on
sex. Second, the remedies and procedures available to plaintiffs under
the Equal Pay Act are insufficient to ensure the effective protection
of this critical anti-discrimination law. Moreover, the law is simply
inadequate to respond to wage disparities produced by the significant
occupational sex segregation that still exists in numerous industries
today. Finally, both because employers often fail to disclose--and
because the government refuses to collect--information on pay
disparities, it is exceedingly difficult for individuals or enforcement
agencies to take effective enforcement action against discriminating
businesses.
Plaintiffs Must Meet a High Burden to Make Out a Prima Facie Case
The plaintiff 's prima facie burden is a demanding one. For
example, plaintiffs must demonstrate that the pay disparity exists
between employees of the same ``establishment''--that is, ``a distinct
physical place of business rather than . . . an entire business or
`enterprise' which may include several separate places of business.''
\14\ Indeed, courts ``presume that multiple offices are not a `single
establishment' unless unusual circumstances are demonstrated.'' \15\
In addition, as one court recently noted, the plaintiff 's showing
under the Equal Pay Act:
is harder to make than the prima facie showing [in other cases]
. . . because it requires the plaintiff to identify specific
employees of the opposite sex holding positions requiring equal
skill, effort and responsibility under similar working
positions [sic] who were more generously compensated.\16\
Although the jobs for which wages are compared need not be
identical, moreover, they must be substantially equal--a comparison
which typically can be satisfied only after courts have performed what
one commentator has called a ``very exacting inquiry.'' \17\
Notwithstanding the remedial purposes of the law, courts have narrowly
defined what they will consider to be ``equal'' work. In Angelo v.
Bacharach Instrument Company,\18\ for example, female ``bench
assemblers'' in light assembly alleged they were paid less than their
male counterparts who were classified as ``heavy assemblers.'' \19\
Both the women and men, as well as an industrial engineering expert,
testified that the men's and women's jobs at the plant were
substantially the same with respect to skill, effort, and
responsibility.\20\ Despite this testimony, the court held that the
positions were ``comparable,'' but not equal.\21\ As one commentator
has stated, therefore,
``despite the admonition contained in the Federal regulations
that ``insubstantial differences'' should not prevent a finding
of equal work, the courts have not ``reach[ed] beyond
comparisons of virtually identical jobs, which in a workforce
substantially segregated by gender, provides women with a very
limited substantive right indeed.'' \22\
For all of these reasons, plaintiffs must meet a particularly heavy
burden to proceed with an Equal Pay Act claim. But even plaintiffs who
successfully make out a prima facie case of unequal pay for equal work
face challenges from courts that have construed an employer's
affirmative defenses in ways that defeat the basic purposes of the law.
Interpretation of the ``Factor Other Than Sex'' Defense Has Created
Loopholes in the Law
The Equal Pay Act provides four affirmative defenses through which
an employer may justify a wage disparity between substantially equal
jobs. As a commentator has noted, the first three of these defenses--
that a pay disparity is based on a seniority system, a merit system, or
a system that bases wages on the quantity or quality of production--are
relatively straightforward ones applied with reasonable consistency by
the courts.\23\ Court interpretations of the last of these affirmative
defenses, however--the defense that a pay differential between equal
jobs is based on a ``factor other than sex''--have in some instances
opened the door to a perpetuation of the very sex discrimination the
Equal Pay Act was designed to outlaw.
In 1974, the Supreme Court rejected the argument that ``market
forces''--that is, the value assigned by the market to men's and
women's work, or the greater bargaining power that men have
historically commanded--can constitute a ``factor other than sex,''
since sex is precisely what those forces have been based upon.\24\
Despite this unequivocal holding, however, courts in the Seventh
Circuit recited a ``market forces'' defense recently as last year.\25\
At the same time, moreover, some courts have accepted as ``factors
other than sex'' arguments that seriously undermine the principles of
the Equal Pay Act. Some courts have, for example, authorized employers
to pay male employees more than similarly situated female employees
based on the higher prior salaries enjoyed by those male workers. In a
case decided just last month, for example, one Federal district court
accepted the argument that higher pay for the male comparator was
necessary to ``lure him away from his prior employer.'' According to
the court, ``salary matching and experience-based compensation are
reasonable, gender-neutral business tactics, and therefore qualify as
`a factor other than sex.' '' \26\ Similarly, another district court
stated that:
[O]ffering a higher starting salary in order to induce a
candidate to accept the employer's offer over competing offers
has been recognized as a valid factor other than sex justifying
a wage disparity.\27\
Indeed, that court has also stated that:
``[i]t is widely recognized that an employer may continue to
pay a transferred or reassigned employee his or her previous
higher wage without violating the EPA, even though the current
work may not justify the higher wage'' (emphasis added).\28\
The problem with these cases is their failure to recognize that the
prior salary earned by a male comparator may itself be the product of
sex discrimination or may simply reflect the residual effects of the
traditionally enhanced value attached to work performed by men. Some
courts have applied a similarly blinkered approach to evaluating the
legitimacy of an employer's claim that a man's greater experience or
education justifies a higher salary. In Boriss v. Addison Farmers
Insurance Company,\29\ for example, the court accepted the male
comparators' purportedly superior qualifications as a factor other than
sex justifying their higher salaries without any examination of whether
those qualifications were in fact necessary for the job. According to
the court, it ``need not explore this issue [of whether a college
degree was a prerequisite for the position] as the Seventh Circuit has
ruled that a `factor other than sex' need not be related to the
`requirements of a particular position in question,' nor that it be a
`business-related reason.' '' \30\ In fact, at least two circuits have
accepted the argument that ``any'' factor other than sex should be
interpreted literally and that employers need not show that those
factors are in any way related to a legitimate business purpose.\31\
Cases such as these undermine both the spirit and analytical
approach of the Equal Pay Act. What was intended to be an affirmative
defense for an employer--a defense that demands that the employer carry
the burden of proving that its failure to pay equal wages for equal
work is based on a legitimate reason--has instead been converted by
these courts into a requirement merely that an employer articulate some
ostensibly nondiscriminatory basis for its decisionmaking. Because
these bases can so easily mask criteria that are at bottom based on
sex, the courts' failure to engage in searching analysis circumvents
the burden Congress intended employers to bear.
The Equal Pay Act's Procedures and Remedies Offer Insufficient
Protection for Women Subjected to Wage Discrimination
Unlike those who challenge wage disparities based on race or
ethnicity, who are entitled to receive full compensatory and punitive
damages, successful plaintiffs who challenge sex-based wage
discrimination under the Equal Pay Act may receive only back pay and,
in limited cases, an equal amount as liquidated damages. Even where
liquidated damages are available, moreover--in cases in which the
employer acted intentionally and not in good faith--the amounts
available to compensate plaintiffs tend to be insubstantial.
These limitations on remedies not only deprive women subjected to
wage discrimination of full relief--they also substantially limit the
deterrent effect of the Equal Pay Act. Employers can refrain from
addressing, or even examining, pay disparities in their workforces
without fear of substantial penalties for this failure. The class
action currently pending against Wal-Mart illustrates precisely this
problem. In that case, Wal-Mart refrained from any examination of the
pay of its male and female employees, even though a discrete inquiry
into the pay for male and female occupants of a mid-level management
job revealed disparities that the company elected not to evaluate
further. While such conduct would certainly be taken into account in
assessing the availability of punitive damages under statutes that
permitted such relief, it is largely irrelevant in calculating remedies
under the Equal Pay Act.
Procedures for enforcing the Equal Pay Act also hamstring
plaintiffs attempting to prove systemic wage discrimination through the
use of class actions. Class actions are important because they ensure
that relief will be provided to all who are injured by the unlawful
practice. But the Equal Pay Act, which was enacted prior to adoption of
the current Federal rule governing class actions,\32\ requires that all
plaintiffs opt in to a suit. Unlike in other civil rights claims, in
which class members are automatically considered part of the class
until they choose to opt out, Equal Pay Act plaintiffs are subjected to
a substantial burden that can dramatically reduce participation in wage
discrimination cases.
Current Law Does Not Address Wage Disparities Premised on Occupational
Sex Segregation
Far too many occupations in the United States remain dominated by
one gender. Ninety-five percent of child care workers are female, while
95 percent of mechanical engineers are male. Similarly, while 99
percent of dental hygienists are women, 99 percent of roofers are men.
In female-dominated fields, moreover, wages have traditionally been
depressed and continue to reflect the artificially suppressed pay
scales that were historically applied to so-called ``women's work.''
Maids and house cleaners, for example, 87 percent of whom are female,
make about $3,000 less each year than janitors and building cleaners,
who are 72 percent male.\33\
Current law simply does not provide the tools to address this
continuing devaluation of traditionally female fields. Courts have
refused to interpret the Equal Pay Act and Title VII of the Civil
Rights Act of 1964 to address this chronic problem.\34\ But it is this
occupational sex-segregation--and the wage disparities associated with
it--that is partially responsible for the wage gap women face today.
Current Sources of Information on Wage Disparities are Inadequate to
Identify, Target or Remedy Problems
Individuals are significantly handicapped in their ability to
enforce their rights under the Equal Pay Act by the inaccessibility of
information about the wages paid to their co-workers. Far from making
such information readily available, in fact, numerous employers
penalize employees who attempt to discuss their salaries or otherwise
glean information about their colleagues' pay.
Relevant Federal enforcement agencies have not only failed to fill
this gap, but have, in the case of the Department of Labor,
affirmatively undermined the government's ability to identify and
remedy systemic wage discrimination. In September of last year, the
Department's Office of Federal Contract Compliance Programs (OFCCP)
published a final rule that guts the Equal Opportunity Survey, a
critical enforcement tool developed over the course of two decades and
three administrations to better allow OFCCP to identify and investigate
Federal contractors most likely to be engaging in pay
discrimination.\35\ Without the Equal Opportunity Survey--the only
enforcement tool for the collection of wage data by sex--the Federal
Government now requires no submission of pay information. This refusal
to collect relevant data deprives the government of any means to
systematically monitor pay disparities or efficiently enforce the anti-
discrimination laws.
The Paycheck Fairness Act and Fair Pay Act Would Remedy the
Deficiencies of Current Law
The Paycheck Fairness Act and the Fair Pay Act would respond, in
appropriate and targeted ways, to precisely the problems discussed
previously in this testimony that have undermined the effectiveness of
current law. Among other provisions, the Paycheck Fairness Act would:
Improve Equal Pay Act Remedies.--The act toughens the
remedy provisions of the Equal Pay Act by allowing prevailing
plaintiffs to recover compensatory and punitive damages. The change
will put gender-based wage discrimination on an equal footing with wage
discrimination based on race or ethnicity, for which full compensatory
and punitive damages are already available. As a result, it will
eliminate the unacceptable situation of an employer defending a denial
of equal pay to a woman of color as based on her gender rather than her
race.
Facilitate Class Action Equal Pay Act Claims.--The act
allows an Equal Pay Act lawsuit to proceed as a class action in
conformity with the Federal Rules of Civil Procedure. This would
conform Equal Pay Act procedures to those available for other civil
rights claims.
Improve Collection of Pay Information by the EEOC.--The
act requires the EEOC to survey pay data already available and issue
regulations within 18 months that require employers to submit any
needed pay data identified by the race, sex, and national origin of
employees. These data will enhance the EEOC's ability to detect
violations of law and improve its enforcement of the laws against pay
discrimination.
Prohibit Employer Retaliation.The act prohibits employers
from punishing employees for sharing salary information with their co-
workers. This change will greatly enhance employees' ability to learn
about wage disparities and to evaluate whether they are experiencing
wage discrimination.
Close the ``Factor Other Than Sex'' Loophole in the Equal
Pay Act.--The act would tighten the ``factor other than sex''
affirmative defense so that it can excuse a pay differential for men
and women only where the employer can show that the differential is
truly caused by something other than sex and is related to job
performance--such as differences in education, training, or experience.
Eliminate the ``Establishment'' Requirement.--The act
clarifies that a comparison need not be between employees in the same
physical place of business.
Reinstate Pay Equity Programs and Enforcement at the
Department of Labor.--The act reinstates the collection of gender-based
data in the Current Employment Statistics survey. It sets standards for
conducting systematic wage discrimination analyses by the Office for
Federal Contract Compliance Programs.\36\ The act also directs
implementation of the Equal Opportunity Survey.
The Fair Pay Act would extend the reach of the equal pay laws in
the following ways:
Providing Equal Pay for Equivalent Jobs.--The act would
equalize wage disparities between jobs that are segregated on the basis
of sex, race, or national origin, but require equivalent skills,
effort, responsibility, and working conditions.
Protecting Victims of Wage Discrimination.--Similar to the
Paycheck Fairness Act, the Fair Pay Act provides punitive and
compensatory damages to victims of wage discrimination. It also
prohibits retaliation against individuals who exercise their rights
under the law.
Requiring Employer Record Keeping.--The act requires all
employers to keep records of the methods they use to set employee
wages. Employers must also provide yearly reports to the EEOC that
describe their workforce by position and salary as well as gender,
race, and ethnicity.
CONCLUSION
In less than 2 weeks, the Nation will mark Equal Pay Day--the
annual shameful reminder that women must wait nearly 4 months into the
year to earn as much as men earned the previous year. This wage gap is
real and cannot be dismissed as the result of women's choices in career
and family matters. Even when women make the same career choices as men
and work the same hours, they still earn less.
The consequences of this wage discrimination are profound and far-
reaching. Pay disparities cost women and their families thousands of
dollars each year while they are working and thousands in retirement
income when they leave the workforce. It is long-past time for Congress
to act to ensure that the promise of equal pay becomes a reality.
REFERENCES
1. U.S. General Accounting Office, Women's Earnings: Work Patterns
Partially Explain Difference between Men's and Women's Earnings 2, GAO-
04-35 (Oct. 2003), available at http://www.gao.gov/cgi-bin/getrpt?GAO-
04-35 (last visited Feb. 26, 2007).
2. See Kimberly Bayard, Judith Hellerstein, et al., New Evidence on
Sex Segregation and Sex Differences in Wages from Matched Employee-
Employer Data, 21 J. Labor Economics 887, 904 (2003).
3. Bob Egelko, Sex Discrimination Cited at Wal-Mart: Women Accuse
Wal-Mart, Lawyers Seek OK for Class-Action Suit, San Francisco
Chronicle, Apr. 29, 2003, at B1, available at sfgate.com/cgi-bin/
article.cgi?file=/chronicle/archive/2003/04/29/BU303648.DTL (last
visited Feb. 26, 2007).
4. Dukes v. Wal-Mart, Inc., 474 F.3d 1214 (9th Cir. 2007),
available at http://www.ca9.uscourts.gov/ca9/newopinions.nsf/
D12BAFD84138E886882572790082A
486/$file/0416688.pdf?openelement (last visited Feb. 26, 2007).
5. The court consolidated the EEOC's case with a class action by
employees alleging race discrimination against African-Americans,
Hispanics, and Asians with regards to pay, promotions, and training.
The terms of the settlement provide that $2.4 million will go to
plaintiffs with race-based claims. Press Release, Judge Approves $5
Million Settlement of Job Bias Lawsuits Against Woodward Governor (Feb.
20, 2007), available at http://www.eeoc.gov/press/2-20-07.html (last
visited Mar. 27, 2007).
6. Press Release, EEOC and Morgan Stanley Announce Settlement of
Sex Discrimination Lawsuit (July 12, 2004), available at http://
www.eeoc.gov/press/7-12-04.html (last visited Feb. 25, 2007).
7. See Office of Federal Contract Compliance Programs, U.S. Dep't
of Labor v. Wachovia Corp., Case No. 2001-OFC-0004 (U.S. Dep't of Labor
Office of Admin. Law Judges, Sept. 21, 2004), available at http://
www.oalj.dol.gov/DMSSEARCH/CASEDETAILS.CFM?CaseId=205183) (last visited
Feb. 26, 2007); Wachovia to Pay $5.5M in Discrimination Case, Tampa Bay
Business Journal, Sept. 24,
2004, available at http://tampabay.bizjournals.com/tampabay/stories/
2004/09/20/daily37.html (last visited Feb. 26, 2007).
8. AFL-CIO, Ask a Working Woman Survey Report, 9 (2004) available
at http://www.aflcio.org/issues/jobseconomy/women/speakout/upload/
aawwreport.pdf (last visited Feb. 23, 2007).
9. Memorandum from Greenberg Quinlan Rosner Research to Women's
Voices Women Vote, 13 (Feb. 12, 2007) (on file with the National
Women's Law Center).
10. 29 U.S.C. Sec. 206(d).
11. Corning Glass Works v. Brennan, 417 U.S. 188, 195 (1974).
12. 29 U.S.C. Sec. 206(d)(1).
13. Corning Glass Works, 417 U.S. at 195.
14. Ingram v. Brink's, Inc., 414 F.3d 222, 232 (1st Cir. 2005)
(citing 29 CFR Sec. 1620.9).
15. Meeks v. Computer Ass'n Int'l, 15 F.3d 1013, 1017 (11th Cir.
1994) (citing 29 CFR Sec. 1620.9(a)).
16. Ingram, 414 F.3d at 232 (citations omitted).
17. Peter Avery, Note, The Diluted Equal Pay Act: How Was It
Broken? How Can It be Fixed?, 56 Rutgers L. Rev. 849, 858 (Spring
2004).
18. 555 F.2d 1164 (3d Cir. 1977).
19. Id. at 1166.
20. Id. at 1167-1170.
21. Id. at 1176.
22. Elizabeth J. Wyman, The Unenforced Promise of Equal Pay Acts: A
National Problem and Possible Solution from Maine, 55 Me. L. Rev. 23,
34 (2003) (quoting Jennifer M. Quinn, Visibility and Value: The Role of
Job Evaluation in Assuring Equal Pay for Women, 25 Law & Pol'y Int'l
Bus. 1403, 1439 (1994)).
23. Avery, supra note 17, at 868.
24. Corning Glass Works, 417 U.S. at 205 (noting that the company's
decision to pay women less for the same work men performed ``took
advantage'' of the market and was illegal under the EPA). See also
Siler-Khodr v. Univ. of Texas Health Science Ctr., San Antonio, 261
F.3d 542, 549 (5th Cir. 2001) (noting that ``This court has previously
stated that the University's market forces argument is not tenable and
simply perpetuates the discrimination that Congress wanted to alleviate
when it enacted the EPA.'') (citations omitted).
25. Merillat v. Metal Spinners, Inc., 470 F.3d 685, 697, n6 (7th
Cir. 2006) (noting that the court has ``held that an employer may take
into account market forces when determining the salary of an
employee,'' although cautioning in a footnote against employers taking
advantage of market forces to justify discrimination).
26. Drury v. Waterfront Media, Inc., No. 05 Civ. 10646, 2007 WL
737486, at *9 (S.D.N.Y. Mar. 8, 2007).
27. Glunt v. GES Exposition Services, Inc., 123 F. Supp. 2d 847,
859 (D. Md. 2000) (citing Mazzella v. RCA Global Comm, Inc., 814 F.2d
653 (2d. Cir. 1987)); Walter v. KFGO Radio, 518 F. Supp. 1309 (D.N.D.
1981)).
28. Glunt, 123 F. Supp. 2d at 859. But see Lenihan v. The Boeing
Co., 994 F. Supp. 776, 798 (S. D. Tex. 1998) (``prior salary, standing
alone, cannot justify a disparity in pay''); Equal Employment
Opportunity Commission, Compliance Manual Section 10: Compensation
Discrimination, at 10-IV(F)(2)(g) (2000), available at http://
www.eeoc.gov/policy/docs/compensation.html#10-IV%20COMPEN
SATION%20DISCRIMINATION (last visited April 10, 2007).
29. No. 91 C 3144, 1993 WL 284331 (N.D. Ill. July 26, 1993).
30. Id. at *9 (quoting Fallon v. State of IL, 882 F.2d 1206, 1211
(7th Cir. 1989) (citing Covington v. SIU, 816 F.2D 317, 321-22 (7th
Cir. 1987)).
31. See Wernsing v. Dep't of Human Servs., 427 F.3d 466, 470 (7th
Cir. 2005) (``The disagreement between this circuit (plus the eighth)
and those that required an `acceptable business reason' is established,
and we are not even slightly tempted to change sides.'').
32. Fed. R. Civ. P. 23.
33. Bureau of Labor Statistics, 2006: Median Weekly Earnings of
Full-Time Wage and Salary Workers by Detailed Occupation and Sex,
available at http://www.bls.gov/cps/cpsaat39.pdf (last visited April
10, 2007).
34. See, e.g., AFSCME v. Washington, 770 F.2d 1401 (9th Cir. 1985).
35. The act refers to a regulation the Office of Federal Contract
Compliance Programs (OFCCP) rescinded on September 8, 2006. See DOL,
Affirmative Action and Nondiscrimination Obligations of Contractors and
Subcontractors; Equal Opportunity Survey, 41 CFR Sec. 60.2.
36. The Paycheck Fairness Act would overturn the DOL's 2006
decision to narrow the scope of its investigations into systematic wage
discrimination. See DOL, Interpreting Nondiscrimination Requirements of
Executive Order 11246 with Respect to Systemic Compensation
Discrimination, 71 Fed. Reg. 35,124 (June 16, 2006).
Senator Harkin. Ms. Samuels, thank you very much and now
we'll turn to Evelyn Murphy, Founder and President of the WAGE
Project, Incorporated, Boston, Massachusetts.
Welcome back to the committee, Ms. Murphy.
STATEMENT OF EVELYN MURPHY, FOUNDER AND PRESIDENT OF THE WAGE
PROJECT, INCORPORATED, BOSTON, MASSACHUSETTS
Ms. Murphy. Thank you, Senator Harkin and Senator Clinton.
I commend both of you for wonderful leadership on this. It is a
great day and a signal right now of importance that we look
once again at pay equity in our laws.
I am a Ph.D. economist, switching gears from the lawyers
here. Let me tell you briefly that the comments that I want to
make today are basically a synthesism of years of being
interested in the pay gap. When I started, it was 59 cents on
the dollar and we have gone up to 77 cents on the dollar. It's
not where it should be but between that and my years of public
office, both appointed and elected office, as the former
Lieutenant Governor of Massachusetts and Secretary of
Environmental and Economic Affairs and then in the private
sector. So what I want to do today is bring these things, all
three parts of my experience together.
I wrote a book called, Getting Even: Why Women Don't Get
Paid Like Men and What To Do About It and this is basically a
case--I spent 8 years researching it and the longer I
researched, the more upset I got. I believe very strongly that
the 23 cents of the gender wage gap today is about
discrimination in the workplace. What you will see in this book
are cases--all kinds of companies, all kinds of public offices,
non-profits as well who had to pay up for some kind of
discriminatory behavior, either because they settled out of
court cases or judges and juries ordered them so this is not he
said, she said. These are charges that went far down the
litigation process.
What you find here is that companies, in many ways, from
hiring, barriers on hiring to slower promotions to pay equity
that is equal pay for equal work, which is not honored,
companies that penalize pregnant women, sexual harassment,
which is wage discrimination. Women who lose money when you're
harassed and can't perform your work and have to change shifts
to escape a harasser and also the every day discrimination, the
kind of--the biases and stereotypes that still kick in at every
workplace today--all these things accumulate and they
accumulate in a way that when you say there's 23 cents of a
gender wage gap, it doesn't mean anything until you personalize
it.
Once you personalize it and you realize that it means that
for a young woman who graduated from high school last summer
loses about $700,000 over her working career compared to the
young man next to her getting his high school diploma and if
she graduated from college, it's a 1.2 million difference
between the young man getting his degree and hers. And if she
gets a law degree or a medical degree or a MBA, it's a $2
million difference over her lifetime. That's a huge amount of
money.
Women don't see that because it comes in the little niches
through paychecks from the very beginning. A couple thousand
dollars difference when she starts out with a guy next to her
with the same job qualifications, the slowness in the
promotion, the missed promotion because she's pregnant and the
boss thinks that she might go part-time, inappropriately thinks
that. All these things add up. And they add up over a period of
time, eventually to $700,000 to a $1.2 million to $2 million.
What excites me about these bills is that it brings back
the attention to the workplace and it tells me that we can
finally look at--we've gone as far as we can go, looking at
women's characteristics. We've been at this for a while now.
When I started it was 59 cents on the dollar, it was well, you
need to be better educated. We've got to work longer, we've got
to work harder. Well, we all know that we now support our
families. We are major contributors. We've been working long
and hard. We are essentially--if all those merit arguments were
true, we should be at zero rather than at a 23-cent difference.
So we've gone as far as we can go looking at women's
characteristics and now we have to look at the workplace
characteristics and that's what these bills do, is looking at
the policies and the practices and the cultures of workplaces,
which I find important and compelling in these bills.
So here's my plea, which is that you act on this promptly.
I will give you from the WAGE Project survey that's up on our
Web site right now, just some highlights. We'll give a full
report on Equal Pay Day.
But Senator Clinton, when you talk about making it illegal
to retaliate, when employers can't retaliate, the quotes I have
from this survey right now are very powerful. These are real
working women who describe instances in which they can't speak
up. They know they are being paid unfairly. They have the facts
behind them. This is not just hearsay. They have data and yet
they're afraid--they've been told--one woman who says--one
example in the testimony, a woman says, ``I am supervising 47
employees and I'm earning $22,500 and the guy next to me is a
supervisor of 17 employees and he's making $28,000.'' How does
she know? Because she just calculated the promotions that
everybody is going to get. So these are real facts.
Now she can't and she was told that she better not mention
that, lest she be fired. Now, it may be that there are other
extenuating circumstances. But if you're too afraid to raise
this issue and start discussing it in the workplace, what has
happened, because you're going to lose your job, it has closed
women down. Women can't talk about this.
So, in this survey, what I keep finding is women saying,
``Well, I need my job. My husband is sick. We need our
paycheck.'' And retaliations are a very serious problem in the
workplace today. So the extent to which this law deals with
that, it is terrific.
What it also does in terms of the salaries--the Secretary's
guidelines on wage structures, pay structures allows women who
believe they may be paid unfairly to have some external data to
look at. I would love to have all employers adopting those
guidelines. I think that's the real strength and the meat and
it's the strength of what Senator Harkin's bill does.
But short of that, just having those guidelines out there
so women will have an external authority to back to their
bosses, opens up a dialogue. Here's my hope on this. If you
will pass this bill and act on it now, what it does, is it
tells both employee--women, working women that we are getting
serious about making sure that we set the conditions so that
they have a fair chance to accomplish fair pay, equitable pay
for themselves. This is not about giving them--establishing
fair pay. It is setting conditions in the workplace that allow
them to make their case.
Three specific points on the bill--your points about
negotiation--clearly, negotiation, training for that is very
important. I would hope that the bill has very sharp language
that focuses on the training because it could be all over the
place on financial planning, whatever, but focuses on women's
paychecks and the effects on women's paychecks and in fact, has
to, in the report, evaluate those training programs so that we
get quickly to what works and what doesn't work in training and
negotiations, which will help women's paychecks.
Second, I would hope that in the Secretary's guidelines
that we could stiffen some language so that employers feel they
have to adopt these guidelines and not just look at them. The
more incentive they have for adopting, the better. I would hope
that if we have a prestigious national award that the
applicants for that award can only apply if they document that
they have had absolute changes. It's not good enough just to do
some appropriate things around pay equity. You have to document
that you have, that there were some changes towards pay equity.
Finally, I'd say this, in terms of the pay data that is
collected, please make it accessible to a larger community.
This needs to be out so the debate on what is happening in the
workplace is debated and seen from many professionals' eyes and
those who also offer service and support for working women.
Thank you.
[The prepared statement of Ms. Murphy follows:]
Prepared Statement of Evelyn F. Murphy
Senator Clinton, Senator Harkin, members of the committee, thank
you for the opportunity to testify today on S. 766, the Paycheck
Fairness Act.
By way of introduction, I am Evelyn Murphy, a Ph.D. economist,
author of Getting Even: Why Women Don't Get Paid Like Men and What To
Do About It and President of The WAGE Project, a national nonprofit
organization dedicated to eliminating the gender wage gap. I am also a
Resident Scholar at the Women's Studies Research Center at Brandeis
University, Vice Chair of the Board of SBLI USA Mutual Life Insurance
Company, a Director of Citizens Energy Corporation, a Director of The
Commonwealth Institute, and a Trustee of Regis College. Earlier in my
career I served as Lt. Governor of Massachusetts, Secretary of
Environmental Affairs and Secretary of Economic Affairs. After public
office, I became Executive Vice President of Blue Cross and Blue Shield
of Massachusetts and a corporate director of several publicly traded
financial institutions.
I outline this to explain that my remarks today combine three parts
of my career. First, as an economist, I have had an interest in the
gender wage gap for almost four decades. Over decades, as I watched
more and more women graduating from college and entering careers, I
just assumed that we would catch up with men's wages in a fairly short
period of time. So, I was startled in the mid-1990s when I realized
that we were nowhere near parity. I have been examining the wage gap
ever since. More about that in a moment. As a former public official, I
know what government can and cannot do. Government cannot regulate this
Nation into pay equity. We will simply never appropriate sufficient
funds to supervise the pay practices of every employer. Finally, from
my experience in business I know that the President, the CEOs, the
boss--whatever that top person is called--has the responsibility and
authority, but not yet sufficient accountability, to insure pay equity
for all of his or her employees.
With these perspectives, let me turn to my analysis of today's
gender wage gap by highlighting material from my book.
The essence of Getting Even--the product of 8 years of research in
which I accumulated evidence of gender wage discrimination never before
assembled--is that practically all 23 cents of the gender wage gap is
caused by inequitable treatment of working women simply because we are
women. That's unfair. It is also illegal: it is discrimination.
Inequitable treatment takes money out of a woman's paycheck, which
accumulates into serious financial losses over the 35 years that she
typically works. Over the course of their working lives, a young woman
graduating from high school this spring will make $700,000 less than
the young man standing in line alongside her receiving his high school
diploma. A young woman graduating from college this spring will lose
$1.2 million compared to the man getting the same degree at the same
time. A woman earning an MBA, law degree or medical degree will make $2
million less.
Because we have heard the gender wage gap ratio bandied about for
decades, it has lost meaning. It has become simply a number. But once a
woman personalizes this ratio by calculating what she is losing over
her lifetime, I can tell you that every woman I talk to daily about
this subject starts listening with laser beam intensity about why she
is losing so much money. Through grassroots organizing that The WAGE
Project is doing to establish WAGE Clubs--groups of women who gather to
discuss their pay and treatment at work--large numbers of women are
figuring out their own personal wage gap and are intent on stemming
their financial losses.
Women do not realize the enormous price that they pay for gender
wage discrimination because they do not see big bites taken out of
their paychecks at any one time. Rather, little nicks in a woman's
paycheck--a promotion delayed because she is pregnant and her boss
guesses (wrongly) that she intends to shift to part-time work, a sales
call she misses because her boss assumes she has gone home to cook
dinner for her family, a request she makes for reassignment to escape a
sexual harasser, leaving the bonus she earned behind--all add up, over
time, to become $700,000, $1.2 million, $2 million.
In Getting Even you will read about employers of all kinds--
businesses, corporations, government offices, nonprofit institutions,
in localities throughout America, who had to pay women employees or
former employees to settle claims of gender discrimination or judges
and juries ordered them to pay up. The behavior of these employers
vividly illustrate the commonplace forms of today's wage
discrimination: barriers to hiring and promoting qualified women;
arbitrary financial penalties imposed on pregnant women; sexual
harassment by bosses and co-workers; failure to pay women and men the
same amount of money for doing the same jobs. You will read about
everyday discrimination, that is, the biases and stereotypes which
influence manager's decisions about women. Acts of everyday
discrimination may seem slight to a woman at the time, aggravating but
certainly not worth legal action, yet these biases, too, cut into
women's paychecks over time.
While all these pay-nicking activities occur daily in workplaces--
sometimes intentional, other times simply unreflected biases--in recent
years, public discourse has tried to explain away the gender wage gap
as mothers opting out to raise families, women choosing low-paying
professions, women preferring flex-time and part-time work. I would be
glad to refute each of these as causes of the gender wage gap in our
discussion. These so-called ``causes'' simply cannot withstand close
scrutiny and commonsense as causes of the wage gap. Please do not
misinterpret this point. We need pay equity AND better working
conditions for working mothers. These are not tradeoffs.
The gender wage gap--the fact that women earn 77 cents for every
dollar that men earn--has been stuck for 14 years. Think about that.
Women have been graduating from college at the same rate as men or
higher for a quarter century. More and more women are the sole
financial providers for themselves and their families. Women work as
hard as men; women are as committed to their jobs as men. Women need
their paychecks just as much as men. So if all the reasons about merit
which I heard when I started work (when women earned only 59 cents for
a man's dollar!) were right, the gap today should be, in essence, zero!
Since the gap has not closed even a penny in more than a decade
with women essentially equal to men by traditional measures of merit,
then we have to conclude that we are looking in the wrong places to
explain the gender wage gap. The gap is now not about women's
characteristics, it's about workplace characteristics--the policies and
practices of employers and the cultures that employers sanction.
What gives me great hope today is the fact that the Paycheck
Fairness Act points public attention and policy to the right place: the
American workplace. This bill, with its emphasis on altering workplace
pay practices, creates the appropriate conditions for American women to
achieve gender pay equity once and for all. Working women are not
looking to have pay equity handed to them. Women can and will take
responsibility for ensuring they're paid and treated fairly. But
employers must also take responsibility to ensure that their pay
policies and practices are fair and equitable. S. 766 helps women and
employers achieve this common goal.
So, in my time today, I would call your attention to two matters:
first, the need for prompt passage of S. 766; and second, consideration
of specific language in the current bill.
1. THE NEED FOR PROMPT PASSAGE OF THE PAYCHECK FAIRNESS ACT
First and foremost, I urge you to act promptly on this bill because
working women need help--no special treatment, no special breaks--
simply the kind of help that this bill offers them. Let me explain.
Several months ago, The WAGE Project initiated a modest survey of
working women. We secured their participation through collaborations
with national women's organizations, specifically, the National
Committee on Pay Equity, The Business and Professional Women, The Young
Women's Christian Association, the American Association of University
Women, and the National Organization for Women. Using these networks
almost 800 working women have filled out this survey. They work in
every State in the Nation. They work in large corporations and small
businesses, in manufacturing and financial service outfits, in
nonprofit health care agencies and hospitals, social service
organizations, colleges and universities and in municipal, State and
Federal agencies. They take home small paychecks as waitresses, modest
paychecks as office managers and technicians, and relatively large
salaries as senior executives, professors and physicians. While this is
not a randomly selected sample of working women, their voices offer a
candid window into today's working conditions and their recent
experiences with pay inequity.
We asked women to respond to three questions--tell us of any recent
experience(s) at work when you have been paid or treated unfairly;
second, on what basis--with what data and facts--do you conclude that
this treatment was inequitable or unfair; and third, what, if anything,
did you do about it.
The responses are now being analyzed and a full report will be
released, as planned, on Equal Pay Day, April 24, 2007. However,
because the survey has direct bearing on this hearing, I would like to
draw upon some survey responses to illustrate what women face and how
S. 766 can assist and support them.
For example, one college educated woman in her late 40's living in
the South reported: ``About 3 years ago I worked for a major
corporation in a supervisory capacity. My staff was 47 people and my
male colleague's staff was 12. His salary was $28,000, mine was
$22,500.'' She knew this because ``I helped the manager calculate the
salary increases for the upcoming year. The Vice President advised me
that if I told what I found out I could be fired.''
The Paycheck Fairness Act would help this woman. The nonretaliation
clause in section 3 would enable this woman to raise her objections to
the inequity she sees without worrying that she will be fired.
She is not alone. Many women in this survey reported fears of
firing or retaliation in explaining why they chose not to act even
though they had solid documentation of unfair pay. One woman said:
``stayed silent. Would obtain worse treatment if confronted him,'' said
one woman. Another: ``I need this job. My husband is sick and cannot
work.'' Another explained: ``I need my salary and benefits.'' A former
Vice President in a financial services institution, with a title and
job you'd think would make her secure in raising an objection to unfair
pay, explained in some detail: ``I took too long to speak up. I feared
being fired. When I finally did, I was given the cold treatment. It was
an awful environment to work in and since I value my health, I decided
to find another career.''
Another survey respondent, a Vice President in a call center said
``in the 23 years I have worked here, I have never been paid the same
pay as the male managers'' How did she know this? ``I have total access
to payroll records.''
If her company adopted the guidelines which the Secretary of Labor
develops in section 7 to enable employers to evaluate job categories
based on objective criteria, this woman could use these measures to
initiate an objective discussion about her pay compared with others in
her job category and equivalent jobs where she works. Even if her
company does not adopt these guidelines, the existence and availability
of the guidelines enables women to access some objective external data
to make their case about pay equity for their particular jobs with
their bosses.
The survey shows that all too often, even though women can document
unfair treatment, there are other reasons that they do not act. For
example: they have lost hope that they can rectify their circumstances
or change the culture of their workplace. One women said: ``That's the
way it has always been here.'' ``Just the facts of life!'' exclaimed a
50-year-old office manager in the Midwest. ``They don't care about the
unempowered.'' ``I tried once, and nothing happened.''
Passage of S. 766 sends these women a message: that the Federal
Government recognizes that they are experiencing unfair and inequitable
treatment and pay; is taking action to bring them external data on
which to raise their objections with their employers; and is pressing
employers to be more accountable for pay equity among their employees.
In the absence of Federal legislation for decades, many women have lost
hope that their employers feel any pressure to do more to comply with
anti-discrimination laws.
Financially, the passage of S. 766 would give women hope that
working conditions will become more equitable where they now work. They
would not have to leave their jobs. Listen to this woman, a 37-year-old
case worker in a nonprofit organization. ``They just hired a male and
asked me to train him. He is starting out making more than me. There is
(sic) certain criteria you must meet for this position which he does
not meet. Then they want me to train him to do the same job I am
doing.'' In response to the question ``what did you do about it?' she
replied ``Nothing, because I have to keep my job to feed my children. I
am, however, looking for another job.'' Her response is indicative of
many others: when women encountered blatant pay inequity, often they
decide to leave. Women said: ``I quit.'' ``I gave notice and left 1
month later.'' ``I used up my vacation time and never went back.''
Don't miss the financial point: it costs women money when they have
to leave a job in order to be paid and treated fairly. They may lose
several months of income until they find another job. They lost
whatever seniority they had built up with the last employer. They may
have to take a pay cut if the pressure to bring in a paycheck forces
them to settle for a lesser position.
One other reason why women do not act can be found in this woman's
account: ``I challenged it and all I received was a hostile work
environment, harassment, suspension with trumped up charges. Found a
law firm to take the case. . . . it is almost cost prohibitive to take
this on. I am at $20,000 and counting and I haven't even gotten through
the investigative phase . . . This is why I feel that most women do
nothing. They can't get the finances to do it.'' I can tell you from
all the women whom I've interviewed, most women who pursue litigation
to the very end lose their jobs, lose their careers, lose their
husbands, lose their mental health. Lose, lose, lose. The only reason
they stick it out through years of litigation, they say, is because
they believe they just might make their employer treat other women
better. This is not the price we as a society should ask women to pay
to make workplaces more equitable.
Some women did speak up, but few reported reaching an equitable
resolution. ``I spoke my piece about how unfair it was but nothing ever
came of it.'' ``I spoke with personnel but it was swept under the
carpet.'' After seeing a male colleagues' pay stub left out on her desk
and learning that he, with fewer credentials and less seniority, was
earning 40 percent more than she was, ``I approached HR and was told
paychecks are private and I shouldn't have looked at it. I decided not
to pursue it any further for fear of backlash.''
The Secretary's guidelines for evaluating pay for job categories
can help these women make their cases for pay equity and protect them
from retaliation as well.
For all women whose employers adopt and enforce the Secretary's
guidelines for pay equity, they will be working in a workplace where
pay equity is not only the law, but is also, where the practice of the
employer and the values the employer embeds in the daily culture of the
workplace. Let me be very clear, every employer should adopt the
guidelines to be developed by the Secretary of Labor. That is the
surest way to establish pay equity in every American workplace in the
near future.
And, speaking of the future, I also urge you to promptly pass S.
766 to avoid an unintended, painful legacy. Think about the economy
during the last 14 years. In the late 1990s, this Nation enjoyed
unprecedented economic advances. Yet we couldn't close the gap through
that time! Not even a penny much less all 23 cents. The fact that the
gender wage gap has been stuck for 14 years tells us that there is
nothing inevitable about the wage gap going away on its own if we
continue to rely only on current laws and their implementation. We will
pass on to the next generation, and the next after that--to your
daughters, Senators, and your granddaughters, nieces, aunts, and all
the younger women in your families whom you love and respect--the same
financial losses working women face today. Personalize that loss for
your daughter or granddaughter or niece. Is that a legacy you want to
pass on? Of course not. None of us wants to. But that will happen if no
action is taken to address today's discriminatory treatment of women at
work.
2. SPECIFIC LANGUAGE IN THE CURRENT BILL.
Now I would like to draw your attention to language in several
sections of the current draft.
2a. Section 3. Enhanced Enforcement of Equal Pay Requirements. (d)
Nonretaliation Provision
I have already illustrated how important this provision is to help
working women act on their own behalf without fear of retaliation. Some
employers may resist open discussion among employees about their
salaries and pay scales as this woman confirms: ``my employer
intimidates us. We don't dare talk about what we earn while we're
working.'' But those employers who do treat and pay women equitably
have nothing to hide. Open discussions among employees and their
employer about pay and pay scales can enable all employees to feel
fairly and adequately compensated. As I have listened to working women,
they are thoughtful and fair minded about pay. More transparency about
pay and pay scales in America's workplaces would be beneficial for
employers and employees alike. S. 766 promises to open up workplaces to
healthy discussions about who gets paid what and why. I urge the
committee to insist on this language in the final bill.
2b. Section 5. Negotiation Skills Training for Girls and Women
Here are my concerns. I leave to staff to wordsmith this section.
First, I would urge language which clarifies that the intent is to
focus on negotiation skills directly related to salary and total
compensation matters, including not only skills in bargaining and
communicating, but also, benchmarking techniques. It would be easy for
rules and regulations to interpret the current language of this section
to permit a broader set of negotiating skills in financial planning,
flex time and other workplace conditions. These are important matters.
But the key here is to maintain the priority and focus on negotiations
skills training which bear directly on a woman's earnings. That is a
hard task to accomplish through negotiation training and would be easy
to avoid unless specifically given priority. Clarifying language to
amend this section might not necessarily exclude these other topics
involving a woman's finances, just establish that priority is given to
funding training which bears directly on women's paychecks.
Secondly, in (a) (5) Use of Funds. In the second sentence, I would
suggest substituting the words ``equitable salaries and fair, equitable
compensation packages for themselves'' for the current language
``higher salaries and the best compensation packages possible for
themselves.'' The purpose of this bill is to establish pay equity.
Training which focuses on women getting paid what they should, what is
fair compared with others where they work given their job, experience,
responsibility, etc. fits with the purpose of the bill. The current
language suggests women training women to get promotions (higher
salaries) and the most money (compensation package) they can. I have no
doubt that once women get trained to negotiate for fair pay they will
have the necessary skills for gaining more pay. But the intent of this
bill as I understand it, is for women to achieve pay equity first.
That, in itself, will be a significant outcome.
Finally, (c) Report. I hope the report includes not only
``describing activities conducted under this section'' but also ``and
an evaluation of the effectiveness of these activities in enhancing
equity in women's paychecks.'' In these times of limited funds for
domestic initiatives, some assessment of which training programs
actually advance women's earnings and which do not is essential. I hope
the committee will require an evaluation of training programs.
2c. Section 7. Technical Assistance and Employer Recognition Program
(a) Guidelines
The time available to prepare for this hearing did not allow me to
reflect on this section in detail. So, I cannot offer suggested changes
in language. But I do want to express my hopes for revised language in
this section. Voluntary guidelines are just that: voluntary. However,
the adoption of such guidelines by every employer would dramatically
advance pay equity. I ask the committee to strengthen this section so
that employers are incentivized to adopt these guidelines and/or
conversely, face disincentives for not adopting these guidelines over
some period of time.
(b) (2) Please insert ``or layoffs of employees'' after men in the
clause (. . . lowering wages paid to men). Women need men as allies in
achieving fair and equitable treatment where they work. This clause is
intended to make clear that neither layoffs nor lowered wages are an
acceptable means for employers to achieve pay equity. The experience of
the State of Minnesota is illuminating on this point. Minnesota
achieved pay equity (97 cents on the dollar) without one man losing a
job or losing money in his paycheck. Pay equity can be achieved not at
men's expense.
2d. Section 8. Establishment of the National Award for Pay Equity in
the Workplace. (b)(1)
I would urge the committee to add language which requires
applicants for this prestigious award to disclose the relevant salaries
by gender and by job category which were made more equitable. The
language now makes it possible for an employer to describe worthy
efforts but not report what actual effects their pay equity initiative
had. Without measurable and measured advances, I would argue, no
applicant should be eligible to receive this award.
2e. Section 9. Collection of Pay Information by the Equal Opportunity
Employment Commission
This section of the bill is extremely important. It has the
potential to provide breakthroughs in the Nation's understanding of pay
inequities in today's workplaces and in the Nation's capability to
eliminate the discrimination which underlies pay inequity.
I hope the committee will specify access and availability of the
pay information gathered under this section to researchers, public
policy analysts, and social service organizations. These professionals
need this data to advance our understanding of workplace discrimination
and what to do about it. While the Secretary of Labor may perform
studies and inform the public under section 6, insuring access to a
larger audience would stimulate the cross checks and debates of data
which only develop when many and varied professionals look at the same
data. The standard here ought to be the accessibility that
professionals now have to data gathered by the Census Bureau and the
Bureau of Labor Statistics.
The designation of the EEOC as lead agency for surveying available
data and determining data needed to enhance their enforcement
activities is appropriate. Anticipating that some adaptation of the
EEO-1 form to capture pay information appears the most likely means to
collect pay information, I call to your attention how limited the
availability of EEO-1 data has been to this larger community of
interests. Until 2000, EEO-1 data was unavailable to almost everyone
and even now, only a handful of academics have access. I respect the
need for confidentiality concerning company specific data, but believe
that, with adequate resources, the EEOC could devise ways to enable
more researchers and practitioners to access EEO-1 data. The difficulty
in gaining EEO-1 data has seriously limited public debate, policy
formulation, and even enforcement remedies. I have tremendous sympathy
for extensive enforcement mandate the EEOC implements and I do not
intend this as criticizism of the agency. Rather I want to ensure that,
if the EEOC, becomes the collector of pay information, that the agency
has the mandate and resources to make this data available to a large
community of analysts and practitioners.
IN SUMMARY
Forty years ago, Title VII of the Civil Rights Act and the Equal
Pay Act made gender discrimination illegal in America's workplaces and
embraced the principle that women should be paid like men when they do
the same work. More recently, in the 14 years since the last
Congressional hearings on pay equity, one fact stands out: our Nation's
progress toward reaching these goals has stalled. Prompt passage of The
Paycheck Fairness Act can and will reactivate momentum.
Paycheck Fairness Act sends a strong message to working women that
this Nation intends to eliminate paycheck discrimination in the
foreseeable future. At the same time, the Paycheck Fairness Act sends
just as strong a message to employers that they can and should pay for
the job, not who does the job. If employers do that--pay for the job,
not who does the job--we will eliminate pay discrimination not just for
women, but for minorities, older workers, and handicapped workers. That
is the power of concepts in this bill.
I commend you on your leadership on this bill and offer to help in
whatever you wish.
Thank you.
Senator Harkin. Thank you, Ms. Murphy. And now we turn to
our final witness and that would be Dr. Philip Cohen, Associate
Professor and Director of Graduate Studies Department of
Sociology at the University of North Carolina, Chapel Hill.
Welcome, Dr. Cohen.
STATEMENT OF PHILIP COHEN, ASSOCIATE PROFESSOR AND DIRECTOR OF
GRADUATE STUDIES DEPARTMENT OF SOCIOLOGY AT THE UNIVERSITY OF
NORTH CAROLINA, CHAPEL HILL, NORTH CAROLINA
Mr. Cohen. Thank you. I'd like to thank Chairman Kennedy,
Senator Harkin, and Clinton for holding the hearing and
inviting me here, giving me the opportunity to speak to you
today, the other members as well.
I'm going to step back for just a moment and put some of
this discussion of pay equity in the broader context of gender
equality trends in the country to establish where we are at the
moment that we look at these bills.
There are a number of indicators that show dramatic
improvements since the Equal Pay Act that was passed in the
sixties but on closer scrutiny, those improvements are
concentrated in the seventies and eighties and I'll give
several examples. Starting with the gender pay gap itself,
which was stalled from 1960 to 1980 at 60 cents on the dollar.
In the eighties, there was a sharp increase. It went up to 72
cents and since then, we've picked up another few points but
progress has largely stalled on the gender pay gap.
On women's employment rates, there were dramatic
improvements again up until the mid-1990s, especially married
mothers' employment. Their employment rates doubled in the 20-
year period up to that point. But now they've leveled off and
women's employment rates have actually declined absolutely for
the first time during the recent recession and so-called
jobless recovery. So their progress has also stalled.
And on gender segregation, the tendency of men and women to
work in different jobs, again we had steady progress until
about 1990 and then by most measures, it is now a much slower
or even stalled--actually apropos of Senator Enzi's comment
about blue collar work integration--occupational integration
among blue collars has been much slower and more for
professional and women with advanced education where
integration has gone faster.
What were the sources of these positive developments when
they were moving quickly? It's worthwhile to look at some of
them because some of them, the conditions have changed. Some
were not directly related to women's wages. For example, the
birth control pill gave women a lot more options for planning
their lives and their futures and increasing the incentives for
them to make long-term investments in their careers. Overall
economic shifts in the growth of the service economy, which
drew women in because they were the occupations that
traditionally hired women. They were growing so rapidly.
Feminism itself, which gave the popular expression, to the
opportunity for equality for women. The declines in fertility,
the possibility, the social acceptability of delayed marriage,
all these things increased women's own investments in their
careers.
But the government also intervened in important ways during
this era. Not only the Equal Pay Act and Civil Rights Act but
subsequent Federal equal employment opportunity and affirmative
action enforcement, Roe versus Wade--these changed the ground
on which gender played out in this country.
I just mentioned those to say that the economic, social and
political engines of gender equality in this country seem to
have lost steam in the last 10 years and I think that's an
important context for today's hearing.
The benefits of equal pay for women are far reaching and
some have already been touched on here today. I want to
highlight lower pay for women means higher poverty rates for
single mothers, in particular. We have 3.5 million poor,
single-mother families in this country and they're twice as
likely to be poor as single father families, even when they are
both employed full-time and year round. The poverty rate is
lower for those men and women but twice as high still for
single mothers in that condition.
Lower pay means lower pensions for women when they retire.
Obviously this is an issue of growing importance, the public
burden of retirement support as the population ages and lower
pay also increases stress on families, we now know, in a number
of ways. Poor couples are less likely to get married when women
have lower wages. Couples are more likely to divorce when women
have lower wages and fathers are more likely to be involved in
parenting and housework when women earn more within the couple.
Government intervention in this regard has been helpful
before in important ways. In the seventies and eighties, EEO
enforcement and affirmative action did change employer
practices in some ways that we can now document and show that
they had beneficial effects. More accountability and
formalization in hiring and promotion practices, the reliance
on human resource professionals, for example--these practices
spread through industries and had a ripple effect beyond the
targeted organizations.
I'm just going to touch briefly on one aspect of the two
bills here. The expansion of the narrow definition applied
under the Equal Work Standard of the Equal Pay Act. Men and
women in this country largely do work in different jobs and
that is an important part of the gender wage gap as Senator
Harkin mentioned at the beginning. I can add an example to what
you had. Nurse aids and truck drivers both do jobs that require
medium amounts of strength. Both require the same amount of on-
the-job training. Nurse aids have a higher average education.
They are both the same average age and yet nurses' aids earn 57
percent of what truck drivers earn and that's 3.5 million
workers in this country.
Because of this, if we only eliminate the wage gap within
identical jobs at the same job location, we're just not going
to close the gender gap in pay. And I see my time is expiring,
so I'll wrap up on this point.
I did a very simple analysis that you have in my details in
the testimony of 500 occupations in the Census Bureau and if we
equalize the pay within each occupation, the gender gap would
be reduced by about half. But we can't do that because under
current law, even when those occupations--even within those
detailed occupations, for example, bus driver, there are finely
graded occupational job title classifications, which prohibit
or prevent action for disparate pay between men and women.
We have to be able to challenge those small differences in
job classification and title that are sometimes used to justify
large gender disparities in pay and I think the reforms
proposed in both of these bills might help address that
shortcoming and help close the gender gap.
Thanks again for the opportunity to speak with you today.
[The prepared statement of Dr. Cohen follows:]
Prepared Statement of Philip N. Cohen \1\
1. CONTEXT: TRENDS TOWARD GENDER EQUALITY STALLED BY 2000
Today's discussion of gender pay equity comes at an opportune time
in the history of gender inequality in this country. The 1970s and
1980s witnessed dramatic improvement in many intersecting arenas:
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\1\ I would like to express my gratitude for intellectual
contributions by my advisors and mentors, Reeve Vanneman and Suzanne
Bianchi; my colleague Matt Huffman, with whom I have conducted much of
my research on gender inequality; graduate students with whom I have
worked on these issues, including Jeanne Batalova, Makiko Fuwa, Jamie
Lewis, Danielle MacCartney, and Miruna Petrescu-Prahova; and colleagues
with whom I consult or collaborate with regularly, including Lynne
Casper, David Cotter, Paula England, Joan Hermsen and Liana Sayer.
---------------------------------------------------------------------------
Women's employment soared.--This was concentrated among
married mothers with children under six. For this group, annual hours
worked increased from under 600 in 1978 to almost 1,100 by 1998. The
percentage working full-time, year round more than doubled during that
time, reaching 35 percent by 1998.\2\
---------------------------------------------------------------------------
\2\ Cohen, Philip N. and Suzanne M. Bianchi. 1999. ``Marriage,
Children, and Women's Employment: What Do We Know?'' Monthly Labor
Review 122(12):22-31.
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The gender pay gap narrowed.--From 1960 to 1981, women
working full-time, year-round consistently had median earnings stuck at
about 60 percent of men's. The 1980s were the most dramatic period of
improvement, and the gap closed to 72 percent by 1990.
Occupational segregation by gender decreased.--The level
of segregation (which ranges from 1 to 100) dropped from 54.4 in 1970
to 46.3 in 1990. This occurred as women entered historically male-
dominated occupations (such as medicine and law), and integrated
occupations (such as those in real estate and educational
administration) expanded, increasing opportunities for women's
advancement.\3\ One aspect of this desegregation involved access to
management positions and the ``glass ceiling.'' From the late 1970s to
the late 1990s, women's representation in management occupations
increased from about one-quarter to almost one-half (although they
remained concentrated in the lower reaches of managerial
hierarchies).\4\
---------------------------------------------------------------------------
\3\ David A. Cotter, Joan M. Hermsen, and Reeve Vanneman [2004],
Gender Inequality at Work, Russell Sage Foundation and Population
Reference Bureau.
\4\ Philip N. Cohen and Matt L. Huffman (forthcoming), ``Working
for the Man? Female Managers and the Gender Wage Gap,'' American
Sociological Review.
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Wives and husbands shared housework more equally.--The
most rapid change occurred between 1975 and 1985, when the ratio of
married mothers' to married fathers' housework time dropped from 4.5 to
2.1--meaning married mothers did just over twice as much housework as
their husbands.\5\
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\5\ Suzanne M. Bianchi, John P. Robinson and Melissa A. Milkie
(2006), Changing Rhythms of American Family Life, Russell Sage
Foundation.
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Public attitudes toward equality for women warmed.--From
the late 1970s to the mid-1990s, there was a steep increase in the
percentage of Americans expressing support for female politicians and
for mothers working outside the home; and opposing the idea that women
should stay at home, and that children suffer when their mothers work
for pay.\6\
---------------------------------------------------------------------------
\6\ David A. Cotter, Joan M. Hermsen, and Reeve Vanneman (2007),
``The End of the Gender Revolution? Gender Inequality in the 1990s and
Beyond,'' paper presented at the annual meetings of the Population
Association of America. Details are available at http://
www.bsos.umd.edu/socy/vanneman/endofgr/.
---------------------------------------------------------------------------
Women gained access to political and administrative
power.--The increases were especially pronounced in State government,
among both elected legislators and State executives and
administrators.\7\ As noted, women's representation in management
positions broadly increased as well.
---------------------------------------------------------------------------
\7\ Cotter et al. (2007).
What drove this unprecedented progress? Three of the most important
---------------------------------------------------------------------------
factors were:
The pill.--An often-overlooked medical breakthrough--the
birth control pill--permitted young women in the 1960s and 1970s to
control (and therefore plan) the sequencing of their family and
professional lives to an unprecedented degree, especially by delaying
childbearing and increasing their career investments.\8\
---------------------------------------------------------------------------
\8\ Claudia Goldin (2006), ``The Quiet Revolution That Transformed
Women's Employment, Education, and Family,'' American Economic Review
96(2):1-21.
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Economic restructuring.--Women made these choices in a
rapidly changing economic context marked by the expansion of the pink
collar and service occupations that traditionally employed women,
creating a booming demand for women's labor.\9\
---------------------------------------------------------------------------
\9\ Cotter, David A., Joan M. Hermsen, and Reeve Vanneman (2001),
``Women's Work and Working Women: The Demand for Female Labor,'' Gender
& Society 15(June):429-452.
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Culture and politics.--These economic and technological
changes added fuel to the fire of change in the cultural and political
realms. The feminist movement, declining fertility and the growing
acceptability of divorce and delayed marriage all propelled women's
independence and empowerment. Legal and legislative innovations, from
the Equal Pay and Civil Rights Acts, to Equal Employment Opportunity
and Affirmative Action, to Roe v. Wade, changed the ground upon which
gender played out.
This era of rapid progress toward gender equality now has
definitively stalled. Equalizing trends in these areas have slowed (the
wage gap, desegregation, political representation), stopped (women's
employment, the division of housework) or even reversed (mother's
employment, public attitudes) in the last 10 years.\10\ The economic,
social and political engines driving gender equality appear to have
lost steam.
---------------------------------------------------------------------------
\10\ Trends in the last few years are ambiguous, complicated by the
recession and weak employment during the recovery. See Heidi Hartmann,
Vicky Lovell, and Misha Werschkul (2004), ``Women and the Economy:
Recent Trends in Job Loss, Labor Force Participation, and Wages,''
Institute for Women's Policy Research Publication #B245. On the recent
pay gap see, David Leonhardt, ``Gender Pay Gap, Once Narrowing, Is
Stuck in Place,'' New York Times December 24, 2006.
---------------------------------------------------------------------------
In summary, today's discussion of pay equity occurs in the context
of an overall movement toward gender equality that sorely needs a
boost. Can equal pay provide such a boost?
2. EQUAL PAY: FOUNDATION FOR EQUALITY AND WELL BEING
Improving pay equality between men and women can be an important
impetus for equality in many areas, and for other social benefits for
women, families and children, with far-reaching consequences:
Poverty.--Because of lower earnings for women, single
mothers are twice as likely to live below the Federal poverty line as
single fathers (36 percent versus 18 percent). Thus, there are 3.5
million single mother families in poverty. Even among single parents
who work full-time and year-round--the comparison we commonly make to
assess the gender wage gap--single mothers are more than twice as
likely to be in poverty as single fathers (12.1 percent versus 5.7
percent).\11\
---------------------------------------------------------------------------
\11\ Figures reported by the U.S. Census Bureau, from the March
2006 Current Population Survey (http://www.census.gov/hhes/www/poverty/
poverty.html).
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Pensions.--Men are more likely than women to work in jobs
that provide pensions upon retirement, but even among men and women who
do receive pensions or Social Security, accumulated earnings
differences lead to large gender gaps in pension amounts.\12\ This
issue is of growing importance as the number of retirees and the costs
of public retirement support increase.
---------------------------------------------------------------------------
\12\ William E. Even and David A. Macpherson (2004), ``When will
the gender gap in retirement income narrow?,'' Southern Economic
Journal 71(1):182-200; William E. Even and David A. Macpherson (1994),
``Gender Differences in Pensions,'' Journal of Human Resources,
29(2):555-587.
---------------------------------------------------------------------------
Marriage and children.--Wives' higher levels of earnings
and employment are associated with greater marital stability, even as
they make it more possible for women to leave bad marriages,\13\ and
reduce the negative repercussions of divorce for children.\14\ Higher
earnings--for women as well as for men--also increase the chance of men
and women marrying, especially among the poor.\15\
---------------------------------------------------------------------------
\13\ R. Schoen, S.J. Rogers and P.R. Amato (2006), ``Wives'
employment and spouses' marital happiness: Assessing the direction of
influence using longitudinal couple data,'' Journal of Family Issues
27(4):506-528; Liana C. Sayer and Suzanne M. Bianchi (2000), ``Women's
economic independence and the probability of divorce: A review and
reexamination,'' Journal of Family Issues 21(7):906-943. For a review,
see Lynn White and Stacy J. Rogers (2000), ``Economic Circumstances and
Family Outcomes: A Review of the 1990s,'' Journal of Marriage and the
Family 62(4):1035-1051.
\14\ Yongmin Sun, Yuanzhang Li (2002), ``Children's Well-Being
during Parents' Marital Disruption Process: A Pooled Time-Series
Analysis,'' Journal of Marriage and Family 64(2):472-488. (This finding
is with regard to family income, not mother's income specifically.)
\15\ Megan M. Sweeney (2002), ``Two decades of family change: The
shifting economic foundations of marriage,'' American Sociological
Review 67(1):132-47; K. Edin and J. M. Reed, ``Why don't they just get
married? Barriers to marriage among the disadvantaged,'' Future of
Children 15(2):117-137.
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Domestic labor.--Within marriages, housework and childcare
are divided more evenly in couples with more equal earnings,\16\ partly
because wives' deploy their own incomes toward domestic and caring
services.\17\ Husbands' contributions to childcare improve children's
development,\18\ and their greater contribution to housework, in turn,
boosts wives' career prospects and encourages them to invest more in
their careers.\19\
---------------------------------------------------------------------------
\16\ Suzanne M. Bianchi; Melissa A. Milkie; Liana C. Sayer; John P.
Robinson (2000), ``Is Anyone Doing the Housework? Trends in the Gender
Division of Household Labor,'' Social Forces 79(1):191-228; Liana C.
Sayer and Sanjiv Gupta (2007), ``Who's Opting Into Housewifery?'',
paper presented at the Population Association of American annual
meetings.
\17\ Philip N. Cohen (1998), ``Replacing Housework in the Service
Economy: Gender, Class, and Race-Ethnicity in Service Spending'' Gender
& Society 12(2):219-231.
\18\ Lenna Nepomnyaschy and Jane Waldfogel (2007), ``Paternity
Leave and Fathers' Involvement with Their Young Children,'' paper
presented that Population Association of America annual meetings.
\19\ For evidence that reducing women's housework increases their
wages, see, e.g., Joni Hersch and Leslie S. Stratton (1997),
``Housework, Fixed Effects, and Wages of Married Workers,'' Journal of
Human Resources 32(2):285-307. The unequal division of housework and
the gender wage gap are therefore mutually reinforcing.
If government policy can help rekindle the movement toward gender
equality, then the prospects for a more equal society will be greatly
enhanced. What role, then, can government play?
3. LAW AND POLICY EFFECTS ON EQUALITY
In the 1970s and 1980s, research shows that government policy,
especially Equal Employment Opportunity enforcement and Affirmative
Action practices, led to changed practices among employers. This
improved pay and access to jobs for women and minorities (especially in
management). These policies promoted the formalization of hiring
practices, which reduces particularism, or subjective hiring and
promotion without adequate consideration of the merits of
candidates.\20\ For example, more companies began relying on human
resource professionals and formal internal labor markets for
promotion.\21\ The influence of State policy has been shown, for
example, with the finding that establishments with closer institutional
ties to the State (public agencies, non-profits, those in California,
and those with personnel offices and ties to labor attorneys) were more
vigorous in their adoption of due process mechanisms for employees
(disciplinary hearings and grievance procedures) in the 1970s and
1980s.\22\ As some firms implement practices that reduce
discrimination, these practices diffuse through industries. Thus even
targeted legal or social interventions can have important ripple
effects.
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\20\ Frank Dobbin, John R. Sutton, John W. Meyer, and W. Richard
Scott, (1993), ``Equal Opportunity Law and the Construction of Internal
Labor Markets,'' American Journal of Sociology 99(2):396-427.
\21\ Donald Tomaskovic-Devey and Kevin Stainback (2007),
``Discrimination and desegregation: Equal opportunity progress in U.S.
private sector workplaces since the Civil Rights Act,'' Annals of the
American Academy of Political and Social Science 609(Jan.):49-84.
\22\ John R. Sutton, Frank Dobbin, John W. Meyer and W. Richard
Scott (1994), ``The Legalization of the Workplace,'' American Journal
of Sociology 99(4):944-971.
---------------------------------------------------------------------------
A drop in government involvement can also have negative effects.
For example, many firms responded to civil rights enforcement in the
1970s with EEO and AA programs. But when enforcement was curtailed
during the Reagan years, such programs were systematically eroded.\23\
---------------------------------------------------------------------------
\23\ Erin Kelly and Frank Dobbin (1998), ``How Affirmative Action
Became Diversity Management: Employer Response to Antidiscrimination
Law, 1961 to 1996,'' American Behavioral Scientist 41(7):960-984. Note
that anti-discrimination enforcement is just one area where policy can
have an effect on gender inequality. ``Family-friendly'' workplace
regulations and policies may also promote more equitable employment
practices (although some leave policies have been shown to reduce
women's labor force participation, which may backfire on gender
inequality). See Hadas Mandel and Moshe Semyonov (2005), ``Family
Policies, Wage Structures, and Gender Gaps: Sources of Earnings
Inequality in 20 Countries,'' American Sociological Review 70(6):949.
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4. POTENTIAL EFFECTS OF THE PROPOSED LAWS
This brief review suggests several possible benefits of the
proposed legislation, the ``Paycheck Fairness Act'' and the ``Fair Pay
Act'' (bill numbers not available at this writing). I will only comment
on a few aspects of these proposals here.
Punitive and compensatory damages, class actions, procedural
reform.--Both bills appear to improve incentives for employers to make
employment practices more equitable, by increasing potential costs and
narrowing exclusions. Successful lawsuits or settlements in this area
may spur organizational innovations that spread through affected
industries, as happened with earlier EEO and title VII cases.\24\
Significantly, both bills would improve data collection and analysis,
which are crucial tools for identifying and remedying problems of
gender inequity.
---------------------------------------------------------------------------
\24\ Alexandra Kalev and Frank Dobbin (2006), ``New Legal Realism:
Enforcement of Civil Rights Law in Private Workplaces: The Effects of
Compliance Reviews and Lawsuits Over Time,'' Law and Social Inquiry
31:855-903.
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Best practices.--Despite several decades of attempts at equal
employment and anti-discrimination reforms, there is little consensus
on what practices have been most effective.\25\ The Paycheck Fairness
Act's proposed rewards for innovative employers, and support for
training and assistance, may help set examples to encourage the spread
of such innovation. Past research has clearly shown that the benefits
of occupational desegregation, for example, extend to all women in the
surrounding labor market.\26\
---------------------------------------------------------------------------
\25\ Alexandra Kalev, Erin Kelly, and Frank Dobbin (2006), ``Best
Practices or Best Guesses? Assessing the Efficacy of Corporate
Affirmative Action and Diversity Policies,'' American Sociological
Review 71(4):589-617.
\26\ David A. Cotter, JoAnn DeFiore, Joan M. Hermsen, Brenda
Marsteller Kowalewski, and Reeve Vanneman (1997), ``All Women Benefit:
The Macro-Level Effect of Occupational Integration on Gender Earnings
Equality,'' American Sociological Review 62(5):714-734. Cohen and
Huffman (2003), ``Individuals, Jobs, and Labor Markets: The Devaluation
of Women's Work,'' American Sociological Review 68(3):443-63.
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The ``equivalent jobs'' standard.--Because men and women are so
often segregated into jobs with different titles, even when they are
similar in skill requirements and working conditions, the proposed
change in the EPA standard language might permit legal scrutiny of
segregation practices when those outcomes include unequal pay for men
and women. This could have profound effects on both equal pay and
segregation.
This last point requires additional elaboration. Men and women are
largely segregated across occupations, establishments, and jobs within
establishments. In 2000, 51 percent of either men or women would have
had to change occupations in order to achieve equal distributions.\27\
How does segregation affect the pay gap? Consider this example. There
are 1.1 million nurse aides and 2.5 million truck drivers in this
country. The nurse aides have more education on average, with 38
percent having at least some college training, compared with 29 percent
of truck drivers. Both groups' average age is 43. Both do work that
requires ``medium'' amounts of strength, and nursing aides require more
on the job training to perform their duties (according to measures from
the Bureau of Labor Statistics). And yet, those nurse aides, 89 percent
of whom are women, have median earnings of only $20,000 per year, just
57 percent of the median earnings of truck drivers--97 percent of whom
happen to be male.\28\ This example suggests that segregation is a
major source of wage inequality.\29\
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\27\ I use the standard index of dissimilarity and data on about
500 occupations from the 2000 Census, from Earnings Distribution of
U.S. Year-Round Full-Time Workers by 28 Occupation: 1999 (PHC-T-33);
available at: http://www.census.gov/population/www/cen2000/phc-
t33.html.
\28\ Analysis of data from the 2004 Current Population Survey,
published in Philip N. Cohen and Christin Hilgeman, review of
Occupational Ghettos: The Worldwide Segregation of Women and Men, by
Maria Charles and David B. Grusky, Contemporary Sociology (35[3],
2006). Job characteristics are from the Dictionary of Occupational
Titles. Restricting the analysis to those working full-time and year-
round, narrows the gender gap slightly, to 64 percent (Census 2000 data
available at http://www.census.gov/population/www/cen2000/phc-
t33.html).
\29\ Segregation among lower-status workers has been more severe,
and slower to change in recent decades (See Cotter et al. [2004]). Most
analyses find small direct effects of segregation on the wage gap,
compared to the size of the wage gap within occupations. I conducted a
simulation testing the effect of (1) men and women being redistributed
into the average overall occupational pattern, but keeping their
average earnings in each occupation the same, which reduced the gender
gap from .67 to .73 (a 19 percent reduction in the gap); and, (2) men
and women earning the same average earnings within each occupation,
which reduced the wage gap to .85 (55 percent reduction). This is
within the range of previous estimates. Researchers in the 1990s found
that anywhere from 9 to 38 percent of the wage gap was accounted for by
the difference in occupational distributions. See David A. Cotter,
JoAnn DeFiore, Joan M. Hermsen, Brenda Marsteller Kowalewski, and Reeve
Vanneman (1997), ``All Women Benefit: The Macro-Level Effect of
Occupational Integration on Gender Earnings Equality,'' American
Sociological Review 62(5):714-734. In my study with Matt Huffman, we
analyzed the distribution of men and women across 62,000 occupation-by-
industry cells, and found that gender segregation at that level of
detail accounted for 27 percent of the gender wage gap in 1990. See
Cohen and Huffman (2003).
---------------------------------------------------------------------------
Even though such a gap might seem unjust, the courts have not
favored challenges based on the ``comparable worth'' of different jobs,
preferring to let ``the market'' determine such differences--while
disparities in wages within ``equal'' jobs have been successfully
challenged under the rules of EPA.\30\ Yet, at the very detailed level,
studies that examine specific job positions in the same establishment
often find very small gender gaps in pay.\31\ If you look close enough,
maybe everyone's job is a little different.
---------------------------------------------------------------------------
\30\ These cases are summarized in the CRS report ``Pay Equity
Legislation in the 110th 31 Congress,'' by Jody Feder and Linda Levine
(2007).
\31\ Trond Petersen and Laurie A. Morgan (1995), ``Separate and
Unequal: Occupation-Establishment Sex Segregation and the Gender Wage
Gap,'' American Journal of Sociology 101(2):329-365. For background,
see Paula England (1992), Comparable Worth: Theories and Evidence,
Aldine de Gruyter.
---------------------------------------------------------------------------
What is the proper balance? The Census data show, for example,
average earnings of $170,000 for male physicians, compared to $100,000
for female physicians, which suggests a large pay disparity for men and
women in the same jobs. Yet within those groups men and women
specialize very differently, and work at different establishments.\32\
If comparable worth permits too much legal intervention into wage
setting, the current rules appear to permit too little--allowing small
differences in job characteristics to justify large gender disparities
in pay. Ultimately, eliminating the wage gap will require both
integrating men and women more into the same occupations, and
eliminating disparities within occupations and jobs. The chief benefit
of the ``equivalent jobs'' reform might be to permit a broader
comparison of work that is substantively equivalent but that is
classified differently by employers. The pressure this brings to bear
on employers might reduce the wage gap by calling into question
practices that segregate men and women into different jobs--and that
reward similar jobs differently.
---------------------------------------------------------------------------
\32\ Many studies that try to account for all known sources of
inequality, such as the 2003 GAO report on the gender gap, control for
occupations at an even higher level of categorization--comparing, for
example, all ``service/household'' workers with all ``professional and
technical'' workers. The GAO report finds that women earned 20 percent
less than men in 2000 once occupation and other standard variables,
including work experience and patterns, were controlled. See ``Women's
Earnings: Work Patterns Partially Explain Difference Between Men's and
Women's Earnings,'' GAO-04-35 (2003).
Senator Harkin. Dr. Cohen, thank you very much. Thank you
all for excellent statements and for keeping them relatively
short. I appreciate that very much.
To start our questioning, I will turn to Senator Clinton.
Senator Clinton. Well, Professor Cohen, thank you for your
very thorough understanding of this issue and I wanted to ask
you about the study that came out yesterday by Vanderbilt
University. Joni Hersch, a Professor of Law and Economics,
found that even when taking into consideration characteristics
that might affect wages, such as choices over household and
child-related responsibilities, market characteristics, working
conditions, occupational segregation and so forth, sex
discrimination remained a strong explanation for the gender pay
gap. What accounts for that, Dr. Cohen? I mean, if you were to
really just strip it all away, why is it so hard to penetrate
society and the economy so that people get the best out of all
their workers, regardless of gender?
Mr. Cohen. Well, Senator Clinton, that is, in my line of
work, the million dollar question. It's difficult to answer. I
think a very important part of it remains job segregation and
that's why I think it's so important to broaden that
consideration of equal work and equivalent work and also to
consider jobs in different establishments as my colleagues
mentioned.
Women do make choices that have negative effects on their
long-term earnings but the choices they make are highly
constrained and a lot of the times, those choices are
constrained by factors at their places of work. So that you may
be comparing women and men in different positions at the same
workplace who have responded to opportunities at that
workplace. It is very important to consider the factors in
hiring and promotion and wage setting that work through
people's careers, even within the workplace that they're in.
But I think from the research that we have, family
obligations and burdens do account for some but when we account
for that, like you say and the recent study shows--I haven't
read in detail but we do have--in aggression terms, it's the
coefficient that won't go away. The effect of being a woman is
always there and I think the segregation of tasks is an
important part of that and if we could look at the equivalency
of jobs, which are classified somewhat differently and equalize
those differences, I think it would have a big effect.
Senator Clinton. Thank you. Dr. Murphy, you have spent so
much of your career wrestling with these issues and I really
personally admire your commitment to this both in the public
sector and through your ongoing efforts to try to untangle the
wage gap. What I would like to ask you is, with respect to the
women who you have interviewed over a number of years, how much
do you think they blame themselves for wage gaps and for their
not getting ahead and how much do they see structural systemic
problems that they think they just can't overcome?
Ms. Murphy. Interesting question, Senator Clinton and thank
you. You have been heroic in pressing for better opportunities
for women for a long time as well.
My sense in the conversations, the discussions I have with
working women every day is that most women today need jobs. It
is such an important part of a family income or for their
families if they are the sole supporter that they are
struggling very hard to maximize their job performance and as
much money as they can make. Sometimes there's a second guess,
well, if I had done something a little differently, maybe I
could make more money or be a better worker but I am struck by
the troublesome part of how much women feel in the workplaces
that they're just unfair--inequitably treated. It is profoundly
there. And because we're so socialized not to grumble too much,
we tend to--women get quiet and they don't confront this or
because they do need the job or they quietly leave, which also
costs them time in promotions and time in rank wherever they
were. So I'm finding--and then there's a kind of despair in all
of this, an emotional part of it, which is they are either so
angry or they despair and say, ``I just can't change the
stuff.''
So to me, I think we are coming to the place where I think
we've turned the corner, that with the wage gap stuck for the
last 14 years, we've suddenly come to the place where we have
to acknowledge there's something going on in the workplace that
we're not dealing with here and while women have been quiet,
it's largely because they haven't seen ways in which they can
act constructively without losing their jobs or being set back.
So I think a large part of this right now is the kind of
trouble, the systemic intransigence that we need to get at.
Senator Clinton. Finally, let me ask about the equivalence
issue because that is a much harder case to make for many
people. Senator Harkin's bill really requires people to more
fairly assess the requirements for a job and to consider them
more equivalent or comparable, even if they're not the same.
I'll start with you, Ms. Samuels, do you have any advice about
how best to make the case for comparability? And I know that
it's worked in Minnesota and Iowa but how would you make the
case more generally?
Ms. Samuels. Well, I think the key for it rests on what Dr.
Cohen discussed, which is the continuing gender-based
occupational segregation that we see in far too many industries
and in far too many lines of work. It has worked in places like
Minnesota and there are various State laws that do mandate the
kind of comparability comparison that the Fair Pay Act would
ask the government to undertake.
This is not a government mandate that would set pay for
different industries. What it would require is that employers
take a careful look at the credentials and qualifications that
are required for each of their job lines and make a fair
assessment about the value of that work to the company. It
maintains employer discretion but also addresses this very
systemic, endemic problem that traditionally female jobs,
because of the historical devaluation of women's work, continue
to pay significantly less than traditionally male fields.
Senator Clinton. Dr. Murphy.
Ms. Murphy. Thank you. Let me just add, you mentioned
Minnesota and Minnesota is a very interesting example because
Minnesota pays 97 cents on the dollar for all of the women
versus American men. The interesting thing here is Minnesota
took every job under the umbrella--under the roof of the State
as an employer and ranked it, similar to the guidelines that
you're suggesting and they ranked it by the qualifications and
skills, the experience, the accountability, the dangers and all
those things and it allows them to do--to solve this problem
that you're hearing about sizing right now, which is about the
job segregation because when you rank all the jobs under the
State's umbrella as an employer, you can compare the nurse in
the State hospital with the man who is driving the snowplow
truck for the DPW and the woman who is a teacher at a
professional university with the guy who is out managing the
forests and parks. It allows you to compare all those jobs and
it gets at this occupational segregation problem under that
roof.
So holding that employer accountable for that kind of
fairness and equity allows you to pay for the job not who does
the job. And once you do that and once every employer pays for
the job not who does the job, you could solve all kinds of
discrimination in the workplace. This is about race and
handicap and age as well as gender. So it's a powerful concept
and one final thing and then I'll shut up.
I interviewed Faith Remke, the State of Minnesota--it cost
the State of Minnesota to do this, to implement this bill, One
Paycheck right now. Her name is Faith Remke and I talked to
Faith Remke in preparing my book and I asked her whether the
methodology that the State of Minnesota uses could be used by
any employer and she said, ``yes.'' I mean, this can be used by
a private employer as well as a public--so the methodology is
here. The intellectual work has been done. It just needs to be
applied to other employers.
Senator Clinton. Thank you.
Senator Harkin. I mean, heck, all you've got to do is look
at the Board of Directors of all these companies and it is
mostly white males.
Ms. Murphy. Yes, indeed.
Senator Harkin. And they try to get a few token women once
in a while. But you look at who is running the businesses, who
is running the companies.
Ms. Murphy. That's right.
Senator Harkin. And they set the policies. That's no
secret. I mean, change the Board of Directors of a lot of these
companies and put a majority of women on it and you might get
some changes made.
Ms. Murphy. I think you would.
Senator Harkin. Senator Murray.
Senator Murray. Mr. Chairman, thank you so much for having
this hearing. I think this is really enlightening. Senator
Clinton, I want to thank you for your leadership on this issue
and as I listened with interest to your question about women
and perceptions, one of my concerns is that women oftentimes
don't believe this is a problem. Your leadership really helps
highlight it. You can't solve a problem if people don't believe
it is a problem. Ms. Murphy, you talked about women just
deciding to be quiet. I'm more concerned that perhaps they're
not speaking up because they don't know it's an issue. Do you
find that out there?
Ms. Murphy. Oh, yes. Oh, yes, particularly women on
campuses. I mean, I spent a lot of time the last couple weeks
on campuses and young women think it's all equal and fair. When
they graduate, they're sort of excited and then when you sort
of talk about what happens and what they can lose, these women
listen up in a way that's amazing because they suddenly get it.
But this is a part in which lots of other women don't as well,
Senator Murray but for young women on campuses, this is a very
important lesson.
Senator Murray. Dr. Cohen, do you agree with that?
Mr. Cohen. Yes, I do. I think the one consequence of
occupational segregation is women often don't have direct
comparisons to make with men in the same job in the same
establishment I guess, if I can, while I'm already talking, in
response to that question about this segregation issue, because
it does get to the perceptions. The market does have some
equalizing tendencies. You know, if you're way out of step with
under paying or over paying some group, you may put yourself at
a competitive disadvantage.
But the market also has a lot of historical and cultural
baggage in the way that things are interpreted and so, it may
be that the comparable work standard, the idea of comparing
very different jobs and trying to establish the value of
meddles in the market too much, as some courts have found. But
the current mechanism seems to meddle too little. It doesn't
allow enough comparison in ways that sometimes the market needs
and I think the perceptions thing is a big part of that
because, well, like I said, people don't see other occupations
as being directly comparable and I think this sort of
discussion can help highlight those comparisons.
Senator Murray. I think it is really important to have this
discussion. I think part of the Paycheck Fairness Act is to
help train young women with negotiation skills when they start
work. The numbers you gave were startling--how much did you say
you lose if you just have a high school education?
Ms. Murphy. Seven hundred thousand dollars.
Senator Murray. And if you have a Ph.D., it was over----
Ms. Murphy. Ten million.
Senator Murray. We want to make sure these young women know
early on that there is a wage gap that will really impact them.
Could you tell me what happens to the wage gap the longer a
woman stays in the workforce? Does it close? Does it widen?
Does it ever even up?
Ms. Murphy. It tends to widen. I mean, the interesting
thing is if you think about a young woman who graduates from
college and gets a $30,000 job and she's excited because she
says, ``My heavens, I'm earning more money than I ever expected
to. I didn't realize I was worth that.'' It's more than my mom
ever made and the young man who just graduated from college
with her gets a job in the same place and he's making $33,000
and so--well, it's not that much money. At the end of the year
when the bonuses are paid, he gets a bigger bonus because it's
a percentage of the salary. The end of the year, the boss says,
``He's a real comer. He's hard charging, he's fired up so we'll
bump him up to $38,000 and she's good, she's solid, she's
working hard so we'll move her to $33,000'' and suddenly she's
earning the same the next year as he was the first year and the
bonus at the end of the year is even bigger and at the end of
that year, the boss says, ``Well, he's going to be one of our
executives. He's managerial potential. We'll bump him up to
$43,000 and she just said she's pregnant and so, well, we want
her when she comes back, when she's had her child and she's
very good so we'll move her up to $35,000.'' And the longer
they work, the wider this differential becomes until it
accumulates to those huge losses.
Senator Murray. Talk to me then about the retirement gap.
Senator Clinton and I have spent a great deal of time on it,
especially with regard to the Social Security. What happens
there?
Ms. Murphy. Oh, it's huge. Because all the way along, we
have an employer who is contributing to the IRA or you don't
have as much money to put aside for your own retirement or your
employer doesn't put aside as much retirement so that
accumulates as well. And because, as Senator Harkin said, women
live longer. Then at the end of life, you have less money over
a longer life so you're actually right. This confirms the
problem for later on, if you don't get at it from the very
beginning.
Senator Murray. Thank you very much. I really appreciate
again, the leadership of Senator Harkin and Senator Clinton. I
hope that we can start making women more aware that a gap
exists and work to put in place the tools that women need to
earn as much as they can. We will all benefit from that. Thank
you very much.
Senator Harkin. Thank you very much, Senator Murray. I just
wanted to ask first Dr. Cohen--I hope I don't catch you off
guard on this. How does the pay gap affect men and what would
closing the pay gap mean to men? Married men, single men? I
don't care, just men. How will it affect them?
Mr. Cohen. Well, if it would be accomplished by raising
women's wages, it would improve the family incomes of married
men, certainly.
Senator Harkin. OK. Fine.
Mr. Cohen. It's not clear--I don't know of any evidence
that remedying problems of gender discrimination has resulted
in lower wages for men. There may be cases where that's the
case but that certainly has not been the historical trend. When
the gender gap was closing, it was not in general at the
expense of male wages. The last few years actually are an
interesting exception there, when wages for men were falling
and the last couple points of the gender gap that we got were
mostly from men's falling wages. But that's not a consequence
of raising wages for women as far as I can tell.
Senator Harkin. I throw this out for your consideration.
You might get more men willing to take those jobs that have
been previously considered women's jobs. Certainly there is a
nurse's aid paid the same as a truck driver. Hey, I might not
like getting beat around that truck cab all the time. I might
want to be a nurse's aid if I had the same equal pay and
benefits and retirement benefits and that type of thing. It
might be a more appealing job but if there is this huge wage
gap, well then, I'd gravitate to something else.
Mr. Cohen. Absolutely, I agree.
Senator Harkin. So it would allow men to be able to pursue
different careers and different occupations than they might
want to pursue right now.
Mr. Cohen. It also does give families more flexibility as
far as fathers----
Senator Harkin. That's right, if the women's--then the man
maybe has more flexibility to do different things than what
they have right now, to choose different options, for example.
So I think that we tend to forget that men would be
beneficiaries of this. We're always thinking about this as some
kind of a zero sum game. If they win, we lose. I don't think
that at all. I think that the whole society would gain on that.
Oh yes, I know--I want to ask--the example, I think that
Ms. Samuels, you had in your--and I'm going to read it. You
didn't read it but I'm going to read it.
Recent examples of pay discrimination cases because this is
one that is very prominent now in the public. In the largest
employment discrimination suit ever filed, female employees
have sued Wal-Mart for paying women less than men for similar
work and using an old boy's network for promotions that
prevented women's career advancement. One woman alleged that
when she complained of the pay disparity, her manager said that
women would never make as much as men because ``God made Adam
first.''
Another woman alleged that when she applied for a raise,
her manager said, ``Men are here to make a career and women
aren't. Retail is for housewives who just need to earn extra
money.'' The Ninth Circuit recently reaffirmed the case of the
class action on behalf of more than the 1.5 million women who
are current and former employees of Wal-Mart. I read that again
because look--I mean, unless you live in some kind of isolated
bubble in our society and you lack all sensitivity whatsoever,
you know this goes on every day in workplaces all over this
country. And again, I think in many cases--I've read a lot
about this case and these women were very brave to come forward
like they did. I think a lot of times women don't do that
because they are single mothers. They do have kids to provide
for and they're hanging on and they just don't need to be fired
from a job and go out and beat around looking for another one.
So they just tend to absorb it. And this old boy's network kind
of thing goes on all over the place. We know that. Come on. We
can't kid each other about this. So that's why I think it is so
important not only for the Paycheck Fairness to provide for the
kind of increased penalties and increased wherewithal for women
to take these cases and to pursue them but also for broadening
things out as we're trying to do with the pay equity, Fair Pay
Act.
I just--again, I ask Ms. Brown. You are on the plaintiff's
side in all this but surely you must recognize also that this
kind of discrimination goes on every day--every day. Every day
and so because women simply don't have the wherewithal a lot of
times to file these suits and you go up against them, does it
behoove us as government--and your statement, I read your
statement. You're saying that there are things that government
can do and government can't. Government can do training and
better education and things like that. But I ask rhetorically,
hasn't the government intervention in the past provided for
better workplaces, everything from OSHA laws to the Americans
with Disabilities Act that I'm probably more familiar with, the
Civil Rights Act, all these things that would not have occurred
other than through government intervention.
And are we short-sighting ourselves by saying that that's
all that needs to be done? Now there were people before this
Civil Rights Act who said, ``We don't need that.'' We've done
everything. There were people before the Americans with
Disabilities Act who said, ``We don't need to do that. We've
done all these things.'' There are plenty of ways for people to
access the courts and take their cases on. And I'm just
wondering if we aren't being a little shortsighted now by
saying, ``Well, we've done all we can do. We don't need to do
any more in that regard because we know that these things
happen every day,'' your comments.
Ms. Brown. Yes, Senator, thank you. I'm usually on the
defense side but I really--first of all, I really disagree with
you that this happens every day everywhere. If you pluck a
number of anecdotes out of the experiences of millions and
millions of people, you get a distorted view and I think you
should be comforted that at least in those workplaces that I
interact with, I read cases about, I teach seminars. There has
been radical change. I think the point of all the laws is to
allow people to fulfill their potential, to express their
values, to work in job conditions that they want to work in.
Maybe they don't want to drive a truck. Maybe they would rather
be in an office. But to tinker with the market forces in
private employment, it seems to me, to get at the problem in a
very, very potentially destructive way because it's the
vibrancy of that market, the ability to come up with new jobs,
to develop new technology, new services that we can sell
globally that provides the opportunity for employees.
So what we need and what we have is the laws that say if
you want a job, if you want the skills, if you want the
education, if you want to work here, then go for it and to the
extent that you find barriers there, I don't think it's the job
of courts or Congress to read people's minds and decide for
them, I think you're being mistreated or I think you're in the
wrong job.
I think people have to step forward and the retaliation
protections are substantial. These cases aren't little negative
value cases. There are attorney fees provisions, there are
punitive and compensatory damages so I think what we want to do
is say, we're not going to decide that these jobs are
comparable to these other jobs. In a public sector, if an
employer--if a State or a locality chooses to do that, that's a
legitimate choice. But for the private economy, you're talking
something very different.
Senator Harkin. But look what happened in Minnesota. First
of all, you say that these anecdotes may give you this sort of
view. I'm pained to ask, is Wal-Mart a distortion? I don't
think so and I think life's experiences teach us that that's
not a distortion. It's an every day occurrence.
Secondly, just take a look at what Minnesota did. Now
Minnesota closed its pay gap 97 percent. They only have a 3
percent disparity. So we have a case study in what a change in
policy can mean on that level. So it's not as if we don't have
something to base this on, we do. So what is so different about
Minnesota than compared to Massachusetts or New York or Iowa?
We did a little bit in Iowa, not much. So I'm just saying--that
wouldn't have happened had it not been for a government--in
that case, the State government, doing something.
Ms. Brown. Well, what they've said is we're going to spend
more money and we're going to pay jobs in a way that is not
consistent with what the market would pay for them. We're going
to say that conditions, skills, responsibility and perhaps
other factors----
Senator Harkin. Working conditions.
Ms. Brown [continuing]. Are not necessarily going to drive
what jobs are paid but we're going to make a decision by FEOT
that we're going to have an equal result. That has never been
the law. The law is, you can't intentionally discriminate
against an individual because of a protected characteristic and
you can't pay people who are doing equal work under similar job
conditions, different amounts because of their gender.
But to tinker with the economy, to have the Labor
Department say, ``We think a job is worth a certain amount,''
when we need people to go do the jobs that the economy needs
and wants and values, seems to me to be a very, very wrong way
to go about solving the problem if you believe there is a
problem. What you need to do is have a level playing field so
that people can make the choices they want to make and take the
jobs that they want to take, not to decry an equality of
result. That's just not been the way that the equal opportunity
law----
Senator Harkin. Then you obviously haven't read my bill.
The Equal Pay Act provides that level playing field. It doesn't
mandate exactly what you've got to pay. It just says, ``Let's
put it all out there. Let's get the information we need and
let's compare them and let's provide a basis that if it
requires equal skill, responsibility, effort and working
conditions, then the pay should be equalized.''
It just provides an avenue for women to bring an action, if
employers aren't living up to that. We didn't say you've got to
do it. But Minnesota did it because that was the public sector.
I'm just saying that in that case, you can see what happens
when the government did do that. It closed the gap. And did it
in a way, I think, that benefits all of the State. I don't know
about that but I'm just saying that the Equal Pay Act basically
says, ``Look, we're going to get the information out. We're
going to compare these. We're going to make this information
available so that women know what these other jobs are paying
and therefore, then they have a case of action to take.'' It's
similar to what we've done under so many other civil rights
laws in our country.
The Americans with Disabilities Act doesn't say you have to
hire a person with a disability. We didn't say that. We just
said, if you're hiring people, you can't discriminate against
someone because they have a disability. That's all we're
saying.
Ms. Brown. Absolutely.
Senator Harkin. And that's what we're saying in the Equal
Pay Act, too.
Ms. Samuels. Senator Harkin, if I could just respond to
your comment for 1 minute. I agree with you completely that
there is unfortunately pervasive and systemic sex
discrimination as well as discrimination on the basis of race
and national origin and disability that still persists in the
workforce.
Where I part company with Ms. Brown is that I think that
the problem that these bills are intended to address is that
the market forces themselves, not only cannot alone solve these
inequities but, in fact, are based on the kinds of prior
barriers and discrimination that have prevented people like
women, like minorities, like people with disabilities from
reaching the same level playing fields that men have occupied.
All these bills will do--they would not diminish
innovation. They would not mandate particular levels of pay for
particular jobs. What they would do is insist that employers
take a look at the jobs that they have in their workforces and
make sure that there aren't artificial barriers that are
limiting the pay that people should get for working in them.
Senator Harkin. So your point being, how can you expect a
system to adjust itself to change the basis when the system
itself is set up on that basis? You're right. Interesting
point.
Ms. Samuels. It's metaphysical.
Senator Harkin. Yeah, it's getting metaphysical here,
you're right. I really didn't have anything else that--oh, one
question I just want to get on to the record, to all of you. Do
you believe that there is an incentive for bringing frivolous
lawsuits under the current law? Are there incentives for
bringing the frivolous lawsuits? I hear that all the time. Is
there an incentive for that or can you speak to that or not?
Mr. Cohen. I can't speak very much to that but I can say
one thing about that, which is, it's hard for women whose
damages are not great to be able to bring lawsuits because they
can't afford the upfront costs or get lawyers to take on their
cases. So the way the law is now certainly privileges those who
have higher earnings and therefore higher damages when they are
discriminated against. Unless you can get qualified as a class
and do the Wal-Mart thing, which is very difficult, it's very
hard to get over those hurdles.
Ms. Samuels. I might also add that it is not a pleasant
experience to be engaged in a lawsuit. I don't know very many
people who would choose that route and in fact, part of the
problem with the current law that the Paycheck Fairness Act and
the Fair Pay Act would fix is that the likelihood of success,
even in meritorious cases under current law, is very low
because of the procedural hurdles, because the remedies, as Dr.
Cohen mentioned, are not great enough to ensure that a woman
will be fairly compensated for her time and because the
substantive standards of the law don't allow her to make her
case in a way that really goes to the heart of the basis for
these wage disparities.
Ms. Murphy. And to pile on--in addition--women know. It's
very expensive to pursue any kind of litigation. And most of us
don't have that money to do this. So you have to think long and
hard whether you want to sue and pursue even the slightest
grievance for the cost, both financially for what it does. You
lose your job. You can lose your career. You lose your husband
often and your mental health. Every woman I've talked to who
has pursued litigation have paid a horrific personal price and
usually hangs on only to try and change that employer's
environment for the women who are working there or come after
her because it is such a long, hard and expensive process.
Senator Harkin. Ms. Brown.
Ms. Brown. Yes, if I may, several points. First of all, I
think there are a certain number of frivolous lawsuits but I
think that the courts are set up to screen those out. I think
that the more energy is spent and would be spent under this
bill with employers having to try to think about whether they
could record contemporaneously every objective factor that goes
into every pay decision, which is something they have to make
about every employee periodically, than they make defending
frivolous lawsuits.
The problem with the bill is that it's putting the onus on
the employer for all sorts of choices that people make that are
a result of social and familial patterns of behavior and I
think to try to dictate something different is wrong and to
suggest that if those guidelines are out there, they'll be
purely voluntary, I think is naive and I don't think that's
really the intention because the expectation or the hope would
be that courts will impose them on employers and I think that
really would wreck havoc.
The other thing I would say is, since the Supreme Court in
the sexual harassment context and the punitive damages context,
urged employers to create effective, internal complaint
processes so that they could avoid liability or the imposition
of punitive damages, there has been a very, very healthy
development of effective internal complaint processes. So you
only see the tip of the iceberg when you see things that get to
court. But the effective resolution of many, many complaints
doesn't reach the public record and I think it's an encouraging
development since those cases that has greatly helped work
things out informally.
Ms. Murphy. I'd just add that I think that's a perfect
example of the way in which the laws can spur necessary social
change.
Senator Harkin. All right. Anything else? Well listen, this
has been a very good, very enlightening hearing. I thank you
all for being here and your testimonies and I thank Senator
Clinton again, for her great leadership on this issue and for
calling this hearing together and making sure that we have it.
I think that this is an issue that's not going to go away and
we've just got to keep at it until we overcome the obstacles
and get a better system of fairness out for people in our
society, on so many bases--sex discrimination, race,
disability--all these areas, just to make our society more fair
and more equitable and I think then the free enterprise system
works even better.
So with that, the committee will stand adjourned.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of Senator Kennedy
One of the most profound economic shifts of the past
century has been the entry of vast numbers of women into the
workforce. In 1900, women made up only 18 percent of the
working population. Today, more than 46 percent of our workers
are women. Nearly three-quarters of all mothers are in the
labor force, and nearly four million women hold multiple jobs
in order to provide adequately for their families.
Although America's women are working harder than ever,
they're not being fairly compensated for their contributions to
our economy. Today, women earn 77 cents for each dollar earned
by men, and the gap is even greater for women of color.
African-American women earn only 67 percent of what white men
earn, and Hispanic women earn only 56 percent. Women are
routinely paid less than men for performing the same jobs, and
occupations dominated by women tend to be lower-paying than
male-dominated occupations, even when the skill sets required
are the same.
The problem is not getting better. This year's wage gap of
23 cents is the same as it was in 2002. Since 1963, when the
Equal Pay Act was passed, the wage gap has narrowed by less
than half of a cent a year. At that rate, women won't achieve
fairness in the workplace for at least another 50 years. That's
unacceptable in the 21st century.
It's true that the wage gap is caused in part by how
society deals with the realities of working women's lives. Many
women have to take time out from the workforce to care for
children or other family members, and these gaps in employment
can permanently reduce their future earnings. It's an
unfortunate reality, but it shouldn't have to be this way. No
one should have to give up fair treatment in the workplace in
order to have children or care for elderly parents.
We also can't blame the pay gap exclusively on women's
dominant role in child care. Outright gender discrimination
also accounts for the disparity between men and women's pay.
There's ample evidence of such discrimination. Multiple
studies--including a study by the Census Bureau in 2004, a
General Accounting Office report in 2003, and a 2006 study by
the Maryland Department of Labor, Licensing, and Regulation--
have examined the gap in earnings between men and women and all
reached the same conclusion. This gap cannot be explained by
differences in education, tenure in the workforce, working
patterns, or occupation. Gender discrimination alone causes a
significant portion of the pay gap, and it illustrates the
continued prevalence of discrimination against women in our
society.
It's appalling that such discrimination still exists in
America. It's preventing working women from achieving their
full potential, and Congress needs to act now to bring fairness
to the workplace.
Women are not getting paid equally for doing the same jobs
as men. It's illegal and it's unacceptable, but it happens
every day. There are too many gaps in the law, and too many
barriers to effective enforcement.
Senator Clinton's Paycheck Fairness Act will give America's
working women the support they need to fight for equal pay. It
will make sure our fair pay laws apply to everyone, and it will
strengthen the penalties for employers who are not obeying the
law. These basic reforms are long overdue, and I urge my
colleagues on the committee to support this important
legislation.
Equal pay for equal work is a key part of the solution. But
we also need to deal with the problem that our economy often
undervalues and therefore underpays work done by women,
particularly women of color. Women are not getting paid what
they are worth for doing jobs that may be different than those
performed by men, but are of equal value to the employer.
Senator Harkin's Fair Pay Act addresses this challenge. It
will require employers to provide equal pay for jobs that are
comparable in skill, effort, responsibility, and working
conditions. It will give workers the information they need to
determine whether female-dominated jobs are being under-valued,
and it provides a remedy for workers who are victims of such
systemic discrimination. It is the second key step on the path
to workplace fairness, and it deserves our strong support as
well.
I look forward to hearing from our witnesses today about
these important proposals and other ideas for closing the wage
gap. America's working women deserve full fairness on the job,
and today's hearing is a step in the right direction.
Prepared Statement of Senator Brown
I want to thank the Chairman for holding this important
hearing and I also want to thank the witnesses who have joined
us today.
All of us have mothers, sisters, daughters, or female
coworkers and I think we would all agree that if they're doing
the same work as their male counterparts, they deserve to be
paid the same wage. Too often this is not the case.
The wage gap between women and men has remained stagnant
for 14 years, even though more and more women are graduating
from high school and college and entering the workforce.
It is unacceptable that in this day and age, on average, my
three daughters can expect to earn $1 million less over the
course of their lives than their male co-workers on the same
career path.
In 1963 when President Kennedy signed into law the Equal
Pay Act, who would have imagined that 44 years later women
still wouldn't be earning an equal wage for equal work? With
that bill women made real and important gains. But the expected
economic equality is yet to materialize.
In my home State of Ohio, 25 percent of single mothers live
in poverty. Yet these women, who need our help the most, still
earn more than 20 percent less than men.
I'm proud to be a co-sponsor of the Paycheck Fairness Act,
legislation that will help close the pay gap for good.
The Paycheck Fairness Act would create a training program
to help women strengthen their negotiation skills, allow
employees to pursue litigation for punitive damages, and
require the Department of Labor to continue collecting and
distributing much needed information on women workers.
I am also a co-sponsor of the Fair Pay Act. This bill would
amend the Fair Labor Standards Act to prohibit discrimination
in the payment of wages on the basis of sex, race, or national
origin. It would require employers to provide equal pay for
jobs that require comparable levels of skill and enable
employees who are discriminated against to file a complaint
with the EEOC or go to court.
When the Equal Pay Act became law, women had the hope of
righting years of economic injustice by earning equal pay for
equal work. With these pieces of legislation we can finally
make these hopes a reality.
I again would like to thank the Chairman for holding this
hearing and look forward to working with all of my colleagues
to pass this important legislation to ensure the rights of all
American workers. Thank you.
Response to Questions of Senator Kennedy by Barbara Brown, Jocelyn
Samuels, Evelyn Murphy, and Philip N. Cohen
BARBARA BROWN
Question 1. In your testimony you argue that much of the pay gap
between men and women is a result of choices made by individual
employees. Yet, several recent studies have found that a substantial
pay gap remains even when controlling factors such as amount and type
of education or training, prior experience, hours worked, and family
obligations are accounted. How do you explain these troubling findings?
Do you agree that some portion of the pay gap must be attributable to
actual gender discrimination?
Answer 1. Not available.
Question 2. You have stated you don't believe additional
legislation is necessary to address the pay inequity between men and
women. Yet, despite years of progress for women, the pay gap has held
relatively steady since the late 1980s. How do you believe that the pay
gap will be remedied in the absence of a change in the law?
Answer 2. Not available.
JOCELYN SAMUELS
Question 1. Opponents of the Paycheck Fairness Act have argued that
the bill would make it impossible for employers to prove that there was
a legitimate non-discriminatory reason that explain differences between
the salaries of male and female employees. How would an employer make
such a demonstration under the act? Do you believe the changes the act
makes would unfairly disadvantage employers in such litigation?
Answer 1. Under the Paycheck Fairness Act, an employer could
continue to rely on the four affirmative defenses authorized under the
Equal Pay Act--namely, that a pay disparity was based on ``(1) a
seniority system; (2) a merit system; (3) a system which measures
earnings by quantity or quality of production; or (4) a differential
based on any other factor other than sex.'' These defenses would
continue to offer the employer a robust opportunity to explain, and
justify, a decision to pay a female employee less than a male employee
performing equal work.
What the Paycheck Fairness Act would do is simply to ensure that
the ``factor other than sex'' defense--which has been applied under the
Equal Pay Act in ways that seriously undermine the principles of equal
pay for equal work--could be used only in circumstances in which sex
discrimination did not in fact taint pay decisions. The Paycheck
Fairness Act would restore Congress's original intent, as recognized by
the Supreme Court, to ensure that factors like the value assigned by
the market to men's and women's work, or the greater bargaining power
that men have historically commanded, were not used to excuse pay
disparities. As such, the Paycheck Fairness Act would clarify that the
``factor other than sex'' defense applies only where the employer can
show that a pay differential is truly caused by something other than
sex and is related to job performance.
The bill's clarification of the defense would not unfairly
disadvantage employers. Employers would be able to satisfy the defense
by using familiar principles of anti-discrimination law, including
those that underlie the requirement of Title VII of the Civil Rights
Act of 1964 that a practice that disproportionately disadvantages a
protected group be shown to be ``job related and consistent with
business necessity.'' Like that disparate impact defense, the Paycheck
Fairness Act's treatment of the ``factor other than sex'' defense is
not designed to--and would not--prevent an employer from basing pay
decisions on legitimate business considerations. It would simply ensure
that those considerations could not be used in a way that would mask
underlying sex discrimination.
Question 2. In her testimony, Ms. Brown argued that there is a
significant amount of frivolous litigation on equal pay issues under
current law. Does empirical evidence bear this out? Given the
relatively low awards in such cases and the Supreme Court's recent
ruling addressing punitive damages more generally, do you expect the
Paycheck Fairness Act to generate an onslaught of frivolous lawsuits?
Answer 2. The Equal Pay Act has not generated, and the Paycheck
Fairness Act will not generate, an onslaught of frivolous lawsuits. As
noted in my testimony, a plaintiff pursuing an Equal Pay Act claim
faces numerous hurdles to proving and obtaining remedies for pay
disparities based on sex, starting with showing that she is paid less
than a male employee performing equal work at the same establishment--a
demanding standard that one commentator has said ``provides women with
a very limited substantive right indeed.'' Even those women who do
succeed in proving pay discrimination receive only limited relief.
Unlike those who challenge wage disparities based on race or ethnicity,
who are entitled to receive full compensatory and punitive damages--and
unlike those who challenge sex discrimination in other employment
decisions, such as hiring, promotions and the like--successful
plaintiffs under the Equal Pay Act receive only back pay and, in
limited cases, an equal amount as liquidated damages. These limitations
on remedies not only deprive women subjected to wage discrimination of
full relief; they also substantially limit the deterrent effect of the
Equal Pay Act.
The Paycheck Fairness Act would address these limitations, but not
in ways that will produce frivolous litigation. The act would simply
ensure that the prohibitions of the Equal Pay Act are applied
effectively and would place women subject to wage discrimination on an
equal footing with those who challenge pay discrimination on grounds of
race or ethnicity. There is simply no basis to assert that ensuring
that the law means what Congress intended it to mean more than four
decades ago--or providing women the same remedies available to other
civil rights plaintiffs--will produce meritless claims. To the
contrary, these improvements to the law are necessary to ensure that
the promise of equal pay for equal work becomes a reality.
Question 3. In your testimony, you point to a few recent gender
discrimination cases where the companies involved are household names--
Wachovia, Wal-Mart, and Morgan Stanley stand out because of their
prominence and the number of Americans they employ. It appears that pay
discrimination is not an anecdotal phenomenon practiced by a few ``bad
apples'' but is instead a widespread phenomenon affecting some of our
Nation's largest employers. How do these prominent cases illustrate the
need for improvements in our equal pay laws?
Answer 3. Pay discrimination, far from being an anecdotal
phenomenon practiced by a limited number of employers, is unfortunately
all too often a way of doing business across the country. Shortly after
this committee's hearing took place, for example, Morgan Stanley agreed
to pay--in its second settlement of a sex discrimination lawsuit in 3
years--at least $46 million to settle a class-action suit filed by
eight current and former female brokers who claimed that they were
subject to discrimination in training, promotion and pay. And the
American Association of University Women recently released a study,
Beyond the Pay Gap, which reveals that just 1 year out of college,
women working full-time already earn only 80 percent of what their male
colleagues earn, even when they work in the same field. The report
shows that 10 years after graduation, the pay gap widens--women earn
only 69 percent of what their male counterparts make.
As studies have repeatedly shown, these pay gaps are not the result
of choices that women make. A 2003 study by the U.S. Government
Accountability Office found that, even when all the key factors that
influence earnings are controlled for--demographic factors such as
marital status, race, number and age of children, and income, as well
as work patterns such as years of work, hours worked and job tenure--
women still earn, on average only 80 percent of what men earn, leaving
a 20 percent pay gap that cannot be explained or justified. The just-
released AAUW study confirms this point.
The persistence of the pay gap, more than 40 years after enactment
of the Equal Pay Act, demonstrates the critical need to improve the
protections of that act. While Congress intended to sweepingly prohibit
pay discrimination when it passed the Equal Pay Act in 1963, subsequent
interpretations of the act have significantly limited its
effectiveness. In addition, because the act was signed into law before
the other major anti-discrimination laws passed by Congress, it does
not reflect the remedies and procedures that have been efficacious in
addressing other forms of discrimination. Enactment of the Paycheck
Fairness Act and the Fair Pay Act is critical to making the promise of
equal pay for equal work a reality.
EVELYN MURPHY
Question 1. Some have argued that evidence for actual cases of pay
discrimination is mostly anecdotal. Given your experience with the WAGE
project, would you agree? What does research demonstrate about how
widespread such discrimination truly is?
Answer 1. Not available.
Question 2. You pointed to the excellent example set by Minnesota
in the State's own hiring practices. Clearly, the State's efforts have
been very successful in dramatically narrowing the pay gap among its
employees. Can you point to similar examples where public employers
have proactively adopted these kinds of policies? How successful have
they been? How well would these kinds of efforts transfer into the
private sector?
Answer 2. Not available.
Question 3. You have said that one factor greatly affecting the
inequality of wages is the fear of asking for a raise or bringing an
issue of inequality to a superior. Do you have any knowledge of, or
experience with, programs that train women to be more effective in
salary negotiations? Is there reason to believe that such programs
would make a real impact in pay disparity?
Answer 3. Not available.
PHILIP N. COHEN
Question 1. Ms. Brown argued against making a comparison of pay
between jobs in different establishments of the same employer because
of variances in local markets. However, without comparing across
establishments, employees working for the same bank in different
branches across the street or the city cannot be fairly evaluated.
Do you believe that comparisons between establishments are valid?
What limitations do we face in addressing the wage gap when we limit
our comparison to within a single establishment?
Answer 1. Because the level of gender segregation is so high,
between occupations, but also between establishments and within
establishments, a very strict standard of comparison--such as the
current standard--makes it very difficult to address gender inequity.
Even if we were to require comparisons only across identical job titles
or job descriptions, the requirement to make comparisons only within
establishments is unnecessarily restrictive and permits gender
discrimination in the sorting of workers across establishments within
an organization.
Question 2. You have made a compelling case for looking at the
comparable worth of jobs that require different tasks but relatively
equal skill levels. You gave the example of nurse aides and truck
drivers, which are roughly comparable in terms of education, training,
and the strength required to do the job.
Do you have other specific examples of such comparable occupations
and the difference in their wages? Has there been any research done to
systematically identify these pairings or groupings?
Answer 2. I do not have other specific examples at hand. The most
systematic analyses have been conducted by State governments (e.g.,
Washington State), in attempts to implement comparable worth standards
in State employment. A rough comparison is readily achieved using
levels of formal education and work experience from surveys such as the
Current Population Survey, combined with occupational characteristics
from the Dictionary of Occupational Titles or the new O*Net
occupational classification scheme.
Response to Questions of Senator Enzi by Jocelyn Samuels
Question 1. This committee also has jurisdiction over education. It
strikes me that much of the ``occupational segregation'' that exists is
due not to decisions made by an employer, but to decisions made by the
employee when she was still a student. These decisions were no doubt
heavily influenced by her teachers, school environment, family
environment and peers. How can we most effectively address THIS aspect
of occupational segregation?
Answer 1. Occupational segregation is indeed influenced by
educational sex segregation at an earlier stage; educational sex
segregation remains pervasive in fields that have traditionally been
dominated by one gender. The National Women's Law Center has, for
example, studied enrollment patterns of girls and boys in high-school
level career and technical education (CTE) classes that are
nontraditional for their gender. Although title IX has been in effect
for 35 years, girls remain pervasively under-represented in
traditionally male CTE fields; nationwide, girls make up 87 percent of
students enrolled in traditionally female training courses, such as
cosmetology and home health care, and only 15 percent of those taking
courses in traditionally male fields such as construction or
welding.\1\
---------------------------------------------------------------------------
\1\ National Women's Law Center, Tools of the Trade (October 2005),
available at http://www.nwlc.org/pdf/NWLCToolsoftheTrade05.pdf.
---------------------------------------------------------------------------
These enrollment patterns have critical consequences for girls'
economic security as adults; girls who take up traditionally female
occupations can expect to earn half (or less) of what they could make
if they went into traditionally male fields. In fact, the highest
median wage for a traditionally female category ($14.63 for health
professions) was lower than the lowest median wage in a traditionally
male field ($16.63 for agricultural management).\2\
---------------------------------------------------------------------------
\2\ Id.
---------------------------------------------------------------------------
But critically, the Center's research has also revealed that these
patterns of sex segregation, far from resulting exclusively from
choices made by young men and women, are in fact in large measure the
product of barriers and discouragement that students face, ranging from
steering by guidance counselors to selective recruitment of boys or
girls for particular courses to harassment and differential treatment
in nontraditional classrooms.\3\
---------------------------------------------------------------------------
\3\ Id.
---------------------------------------------------------------------------
It is critical to take the steps necessary to address this
educational sex segregation and its impact on employment opportunities
and wages for women. Congress' reauthorization of the Carl E. Perkins
Act last year made progress in creating enhanced mechanisms to hold
States accountable for eliminating barriers to recruitment and
retention of students in CTE classes nontraditional for their gender.
But more must be done. Among other things, the Department of Education
must step up to its responsibility to proactively and fully enforce
title IX to investigate, and ensure elimination of, school-based
barriers that limit girls' access to educational opportunities. And
Congress should both exercise its oversight responsibilities over the
Department of Education and move expeditiously to enact additional laws
that would provide incentives for students to explore nontraditional
training and requirements that schools take proactive steps to address
gender-based barriers in education.
These steps would substantially advance efforts to realize the
promise of gender equity in education enacted by Congress in title IX
three and one-half decades ago. But such steps will not be effective in
fully addressing occupational segregation and pay disparities in the
workforce without the additional enactment of the Paycheck Fairness Act
and the Fair Pay Act, both of which create appropriate and targeted
mechanisms to remedy the sex discrimination in which far too many
employers across the country continue to engage.
Question 2. If much of the ``occupational segregation'' that exists
today IS due not to decisions made by an employer, but to decisions
made by the employee, is it fair to hold the employer responsible for
any of these choices?
Answer 2. It is simply not accurate to state that much of the
occupational segregation that exists today is due to decisions made by
employees. As noted in my previous response, the educational sex
segregation that contributes to continued segregation in the workplace
is not a product of choice but of a multitude of factors including,
importantly, gender stereotyping and artificial barriers to equal
educational opportunity that are imposed at or by schools. And
additional barriers are imposed in the workforce when women apply for
jobs that are nontraditional for their gender. While schools and
employers may have largely abandoned the types of explicit statements
that ``women need not apply'' that characterized education and
employment several decades ago, the constraints on women's choices
remain as powerful, albeit perhaps not as overt, as they have ever
been. The recent Supreme Court decision in Ledbetter v. Goodyear Tire &
Rubber Co. illustrates all too forcefully the problems faced by women
in nontraditional work environments. Lilly Ledbetter, who was one of
the very few female supervisors at the Goodyear tire plant in Gadsden,
Alabama, faced persistent sexual harassment at the plant and was told
by her boss that he didn't think a woman should be working there.
Before her case was dismissed by the Supreme Court on statute of
limitations grounds, moreover, Ledbetter had proven that she was
subject to sex discrimination in pay so egregious that a jury awarded
her $3.3 million in compensatory and punitive damages.
Moreover, the pay scales that currently attach to female-dominated
occupations reflect not the intrinsic value of that work to employers
or to the economy, but the fact that wages have historically been
suppressed for fields that are viewed as ``women's work.'' The
pernicious and persistent effects of the stereotypes that limit the pay
for jobs held by women were recently reflected in the class action
lawsuit filed against Wal-Mart, in which a plaintiff stated that when
she applied for a raise, her manager said ``[m]en are here to make a
career and women aren't. Retail is for housewives who just need to earn
extra money.'' \4\ As a result, employers who continue to undervalue
female-dominated occupations are simply benefiting from historic
patterns of discrimination that have yet to be corrected.
---------------------------------------------------------------------------
\4\ Bob Egelko, Sex Discrimination Cited at Wal-Mart: Women Accuse
Wal-Mart, Lawyers Seek OK for Class-Action Suit, San Francisco
Chronicle, Apr. 29, 2003, at B1, available at sfgate.com/cgi-bin/
article.cgi?file+chronicle/archive/2003/04/29/BU303648.DTL.
Question 3. There are some choices we are discussing here that I
hope you agree women should be permitted to continue to make, such as
taking time out for child rearing. Once we allow for those choices,
what is the appropriate statistical wage gap?
Answer 3. It is critical that employers across the country develop
workplace policies that enable all employees, both male and female, to
integrate career and family and other responsibilities. This is why,
for example, the Center supports enactment of the Healthy Families Act,
which would provide 7 paid days of sick leave for employees to address
the health needs of themselves and their families. It is also crucial
that the Department of Labor maintain and expand strong protections in
regulations implementing the Family and Medical Leave Act and that
Congress enact amendments to that law to ensure, for example, that the
leave it provides is fully available to workers in smaller businesses.
Employers must also be encouraged to provide flexible work arrangements
to ensure that workers need not choose between their families and their
jobs.
But even allowing for the fact that some employees, including
women, may choose to take time out of the workforce for child-rearing,
available evidence demonstrates that unexplained pay disparities
persist. For example, a 2003 study by the U.S. Government
Accountability Office (then the General Accounting Office) found that,
even when all the key factors that influence earnings are controlled
for--demographic factors such as marital status, race, number and age
of children, and income, as well as work patterns such as years of
work, hours worked, and job tenure--women still earned, on average,
only 80 percent of what men earned in 2000. \5\ That is, there remains
a 20 percent pay gap between women and men that cannot be explained or
justified.
---------------------------------------------------------------------------
\5\ U.S. General Accounting Office, Women's Earnings: Work Patterns
Partially Explain Difference Between Men's and Women's Earnings 2, GAO-
04-35 (Oct. 2003), available at www.gao.gov/cgi-bin/getrpt?GAO-04-35.
---------------------------------------------------------------------------
Moreover, new research released in April 2007 by the American
Association of University Women Educational Foundation shows that just
1 year out of college, women working full-time already earn less than
their male colleagues, even when they work in the same field--and even
though women typically outperform men on academic measures in college.
According to the report, Behind the Pay Gap, 1 year after college
graduation, women earn only 80 percent of what their male counterparts
earn. Ten years after graduation, women fall further behind, earning
only 69 percent of what men earn. Even after controlling for hours,
occupation, parenthood, and other factors known to affect earnings, the
research indicates that one-quarter of the pay gap remains unexplained
and is likely due to sex discrimination. Over time, the unexplained
portion of the pay gap grows.\6\
---------------------------------------------------------------------------
\6\ American Association of University Women Educational
Foundation, Behind the Pay Gap (April 2007), available at www.aauw.org.
---------------------------------------------------------------------------
This research unequivocally demonstrates that pay disparities
persist regardless of choices that women--or men--make and that all
necessary steps must be taken to address the underlying discrimination
that these disparities manifest.
Response to Questions of Senator Harkin by Evelyn F. Murphy
Question 1. Dr. Murphy, data from the Census Bureau, the Department
of Labor, and others have shown that the pay gap has been decreasing at
a greater rate in recent years than during the 1990s.
To what extent can this decrease be attributed to the drop in men's
wages rather than gains made by women? Are there other factors?
Answer 1. Let me start with highlighting some puzzling aspects of
gender wage gap since 1990 according to U.S. Census data, along with
policy questions raised by these seeming anomalies.
1. In 1993, the gender wage gap reached an historic low of 23
cents--that is, median weekly earnings for year-round, full-time
working women were 77 cents for every dollar earned by year-round full-
time working men. Then the gap widened to 26 cents over the next 4
years even though the Nation's economy was in an expansion which would
last through the rest of the decade. Policy researchers attributed this
erosion in the gender wage gap to the passage of national welfare
reform legislation, saying this was the result of large numbers of
welfare women forced into taking low paying jobs. An analysis I did for
my book, Getting Even, indicated that the effects of welfare reform
legislation only took effect in the late 1990s when the wage gap was
narrowing once again. The welfare reform explanation for changes in the
gender wage gap in the mid-1990s is simply wrong when the time allowed
after passage of the law before women were forced to take jobs and the
related TANF data sets about when women actually took jobs are examined
in detail. What then really explains the gender wage gap's erosion in
these years? Using the current data, no one has a credible answer.
2. The gender wage gap only returned to 23 cents in the early years
of the 21st century--when the Nation's economy was contracting, not
expanding. In the booming economy between 1993 and 1999, why couldn't
women lop off one penny of difference in their wages compared with
men's? Again, using the data currently gathered by the Census
Department and Bureau of Labor Statistics, no one has a credible
explanation.
3. If the reasons for the gender wage gap were simply about merit--
that women are not as well educated, as well trained, do not work as
hard, have not worked as long as men--then the Nation should be
debating why women only earn 95 cents or so for every dollar men earn
because these differences have been essentially gone for several
decades now. So, if the gender wage gap cannot be explained by
differences in the characteristics of working women and working men,
what is the explanation? I am a Ph.D. economist whose dissertation was
based on regression analyses, correlation coefficients, tests of
significance, and the like. If you carefully examine technical papers
``explaining'' the gender wage gap by the most respected statistical
economists in this field, you will find sufficient caveats about their
``explanations'' to undermine any certainty that more than 5 cents of
this difference is due to differences in women's characteristics
compared with men's. In short, using Census and BLS data, no one has a
definitive answer.
All of these questions are to caution you about drawing conclusions
regarding the causes of the gender wage gap and changes in the gap
based only on analyses of the labor force and ignoring analyses of
employers' behavior. Researchers and policy analysts can only use what
data are available, i.e., U.S. Census and Labor Department of labor
force characteristics. Their answers get framed by the data they have
to use. These data historically have taken into account only one
dimension: workers characteristics. Employers' contributions to the
gender wage gap have been left out. EEO-1 filings, the only data
currently collected by the Federal Government about employers, are the
only large scale data set about workplaces. These filings give only
glimpses into employer's behavior regarding wages. A more comprehensive
EEO-1 data gathering effort would give the U.S. Senate and policy
analysts information to assess how much of the 23 cents difference is
due to employer's discrimination. In 1999, an analysis by Professors
Alfred and Ruth Blumrosen of EEO-1 filings \1\ showed de facto
``visible, intentional job discrimination'' by gender and race on the
part of a significant number of employers. Their analysis covered only
differences in job titles held by women and men. A more rigorous
comparison of wages by gender by job title would enable policy analysts
to gain a first approximation of the part employers pay practices in
contributing to the gender wage gap. I urge the committee to review the
complete report of the Blumrosens to understand the value of employer
data in addressing the gender wage gap.
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\1\ THE REALITY OF INTENTIONAL JOB DISCRIMINATION IN METROPOLITAN
AMERICA--1999; ALFRED W. BLUMROSEN, Thomas A Cowan Professor of Law,
Rutgers Law School, Director, Intentional Discrimination Project,
Rutgers Law School; RUTH G. BLUMROSEN, Adjunct Professor of Law,
Rutgers Law School, General Advisor, Intentional Discrimination
Project, Rutgers Law School.
---------------------------------------------------------------------------
So when you ask what other factors affect the gender wage besides
men's declining real wages, I would ask you to look at employer data
about: (1) differences in wages paid by gender for employees holding
similar job titles who have similar training and education, years of
experience, comparable responsibilities and conditions at work; (2)
differences by gender in time to promotion (and more pay) for employees
with similar performance ratings along with comparable training,
experience, responsibilities, conditions; and (3) turnover of employees
by gender with comparable skills, experience, authority, conditions of
work. These three analyses would provide a solid start at assessing,
for the first time in this Nation's history, the contribution of
employer's discriminatory behavior to the gender wage gap.
Finally, in response to the matter you raise with regard to women's
recent gains in the wage gap due to men's declining real earnings,
here's a cautionary note. Because the gender wage gap is a ratio, one
needs to look at what happens to both the numerator and the
denominator. For example, according to the Census Bureau, the gender
wage gap narrowed between 2003 and 2004. You asked whether this is due
to men's real median earnings declining. The answer is yes, but that's
not a complete picture. Women's earnings declined, too, yet at a lower
rate than men's. In that particular year, women did not gain at men's
expense. Both lost ground. Women just lost less ground relative to men.
Thank you for the opportunity to respond to your question. I would
be glad to discuss this further with staff or committee members. I hope
that the committee will report out favorably the pay equity legislation
before them at this time. These bills are much needed to help not only
working women, but also the families who rely on their paychecks to
maintain a decent standard of living.
Response to Questions of Senator Reed by Philip Cohen
Question 1. Dr. Cohen, evidence suggests that the effects of the
pay gap are more pronounced when we look specifically at single
mothers. In particular, data from my State of Rhode Island shows that,
in 2005, the median income for female-headed households was $19,964;
yet, for single fathers, the median income was $31,016.
What pressures does this disparity put on the economy as a whole?
What provisions within the bills we have been discussing today will
most directly address this particular part of the pay gap?
Answer 1. The lower incomes and higher poverty rates among single
mothers are important because children of unmarried parents are much
more likely to live and be cared for by their mothers. When those women
do not earn wages that can lift their families out of poverty,
children's poverty is increased. This increases the cost of welfare and
harms the quality of life for those children and their mothers.
The proposed legislation could have a beneficial effect in this
regard. Occupational segregation between men and women has declined
much slower among workers with lower levels of education than it has in
the professions. Because single mothers are disproportionately less
educated, that means they are more likely to work in
female-dominated jobs that suffer from gender devaluation--the tendency
of women's work to be paid less, partly because of the historical
association of female workers with secondary incomes (``pin money'').
That historical legacy is very hard to shake, even when a simple
examination of worker skill levels reveals that women's jobs are
equally skilled as men's. So the proposed provisions that would allow
broader comparison of compensation across non-identical but equivalent
jobs under the Fair Pay Act might benefit working-class women directly.
On the other hand, gender segregation among working-class women
also means women are excluded from jobs that do require more skill and
therefore provide more lifetime earnings and security. That is, the
problem is not just that women are paid less for working at the same
skill level--they are also blocked from many skilled blue-collar jobs.
I am not aware of provisions in the proposed laws that would directly
address occupational segregation (beyond the possible ripple effect of
desegregation following from more equal pay scales). This remains a
serious problem, not easily challenged under current anti-
discrimination law, which makes it difficult to sue employers for not
hiring people fairly.
Response to Question of Senator Clinton by Barbara Brown
Question 1. I noticed throughout your testimony that you emphasized
the importance of training and trying to get women into high paying
jobs. I think I can safely say that nobody on this panel is suggesting
women shouldn't be helping themselves. As Senator, I've introduced and
supported several pieces of vocational training legislation, including
the Workforce Investment Act and legislation specifically honoring
tradeswomen. The ``Paycheck Fairness Act'' itself actually includes
negotiating training for women so they can combat a difference in
salary before it starts.
It seems there are three parties responsible for ensuring equity:
(1) the employee, who is responsible for complying with the law; (2)
the government, to make sure everyone is playing by the rules and (3)
the employee. Ms. Samuels and Ms. Murphy have shared some stories with
us today, however, that illustrate how there's only so much a woman can
do to help herself if discrimination exists in the workplace.
In your testimony, you suggest the committee's time might be
``better spent on creating opportunities for women to choose whatever
jobs they want, including those that the market rewards with high
levels of pay.'' Women today, however, are heeding your call to achieve
higher-paying jobs. From the year 2000 through 2005, women posted a net
increase of 1.7 million jobs paying above the median salary, while men
gained a net increase of just over 220,000 of such positions, according
to a Bureau of Labor Statistics. The issue of the wage gap, however,
continues to affect women workers. In 2005, the median weekly pay for
women was $486, or 73 percent of that for men--$663. And just this
year, Wimbledon has finally agreed to pay its women tennis champions
the same amount of prize money as their male counterparts. Last year's
men's champion received $1.170 million, while the tournament's women's
winner got $1.117 million.
Just because women are entering fields with higher pay doesn't mean
we shouldn't be looking at other professions. And to that end, my
question is--rather than just encouraging women to get higher-paying
jobs, which is one part of the equation--shouldn't we also be examining
professions traditionally held by women such as teaching, nursing, and
child care so we can learn to value them in the same way we value other
professions?
Answer 1. Not available.
Response to Questions of Senator Clinton by Evelyn Murphy
and Jocelyn Samuels
Question 1. I'd like to direct this question towards Ms. Murphy and
Ms. Samuels. As you heard, Ms. Brown states ``current law is reliable
and effectively remedies discriminatory practices,'' and yet each of
you and your studies show that the wage gap is stagnating and
discrimination remains prevalent today.
In fact, in 2003, the GAO found that, even when all the key factors
that influence earnings are controlled for--demographic factors such as
marital status, race, number and age of children, and income, as well
as work patterns such as years of work, hours worked, and job tenure--
women still earned, on average, only 80 percent of what men earned in
2000. That is, there remains a 20 percent pay gap between women and men
that cannot be explained or justified.
And over time, as you note in your statement, Ms. Murphy, this adds
up. Over the course of a woman's working life she stands to make a
considerably smaller sum than that of her male counterpart. If she is a
high school graduate, that sum amounts to $700,000. If she is a college
graduate, she will lose $1.2 million compared to a man receiving the
same degree during the same year. And if she earns an MBA, law degree
or medical degree? She'll lose $2 million.
And yet, some continue to claim not only that current law is
adequate, but also that legislation to strengthen what we have on the
books now--bills like the ``Paycheck Fairness Act'' and the ``Fair Pay
Act'' are gratuitous. Given what you know about the wage gap, how would
you respond to those who argue that: (a) current law supplies
sufficient protection for women and that (b) additional legislation to
strengthen current law is unnecessary?
Answer 1. Current law is simply inadequate to make the promise of
equal pay for equal work a reality. This is so for several reasons,
some of which I discuss below. First, court interpretations of the
Equal Pay Act have narrowed its application in ways that make it
difficult to demonstrate a violation of the law, even in cases where
wage disparities are in fact based on sex. For example, it is
insufficient for a plaintiff to show that she is paid less than an
individual who works at a branch of her company several miles away; she
must instead find a comparator within her same physical
``establishment.'' In addition, judicial interpretations of the
employer's ``factor other than sex'' defense have in some cases
authorized pay disparities based on the very types of sex
discrimination the Equal Pay Act was intended to prevent--such as a
man's higher prior salary or greater bargaining power, which can
themselves be the product of underlying sex discrimination.
Second, the Equal Pay Act's remedies and procedures, which were
enacted before the seminal civil rights acts that began to follow in
1964, are insufficient to protect women who are subject to wage
discrimination. For example, unlike those who challenge wage
disparities based on race or ethnicity, who are entitled to receive
full compensatory and punitive damages, successful Equal Pay Act
plaintiffs receive only back pay and, in limited cases, an equal amount
as liquidated damages. These amounts not only deprive women subjected
to wage discrimination of full relief; they also substantially limit
the deterrent effect of the Equal Pay Act.
Additionally, current law does not address wage disparities
premised on occupational segregation. In female-dominated fields, wages
have traditionally been depressed and continue to reflect the
artificially suppressed pay scales that were historically applied to
so-called ``women's work.'' But courts have not interpreted the Equal
Pay Act or Title VII of the Civil Rights Act of 1964 to address this
chronic problem.
The Paycheck Fairness Act and the Fair Pay Act would respond, in
appropriate and targeted ways, to each of these deficiencies in current
law. Enactment of these bills is critical if the promise of equal pay
for equal work is to become a reality.
Question 2. Ms. Samuels, I'd like to call on your legal expertise
to address some of Ms. Brown's concerns expressed in her testimony
regarding the ``Paycheck Fairness Act.''
Ms. Brown claims that by not requiring a court to find intentional
discrimination before liability is imposed under the Equal Pay Act,
employers are left ``legally defenseless.'' In fact, Brown claims this
provision would make it ``virtually impossible for an employer to prove
the legitimacy of its compensation decisions.'' Is that true?
Answer 2. The claim that it is ``virtually impossible for an
employer to prove the legitimacy of its compensation decisions'' in a
lawsuit brought under the Equal Pay Act is incorrect. Under the Equal
Pay Act, a plaintiff bears the initial burden of establishing that she
is being paid less than a man who is performing equal work in the same
establishment. Courts have imposed a heavy burden on plaintiffs trying
to make this showing. Once a plaintiff meets this burden, moreover, an
employer may avoid liability by proving that the wage disparity is
justified by one of four affirmative defenses--that is, that the
employer has set the challenged wages pursuant to ``(1) a seniority
system; (2) a merit system; (3) a system which measures earnings by
quantity or quality of production; or (4) a differential based on any
other factor other than sex.''
These defenses hardly leave the employer unable to justify its
compensation decisions. In fact, the ``factor other than sex'' defense
has been interpreted by some courts in ways that seriously undermine
the principles underlying the Equal Pay Act and allow employers to
justify decisions that are, in fact, based on sex. Some courts have,
for example, accepted a ``market forces'' defense to pay
discrimination; others have allowed employers to pay men more on the
grounds that higher pay was necessary to attract a male candidate away
from his prior employer. These cases fail to recognize that the prior
salary earned by a male comparator may itself be the product of sex
discrimination or may simply reflect the residual effects of the
traditionally enhanced value attached to work performed by men.
These cases also convert what Congress intended to be an
affirmative defense for an employer--a defense that demands that the
employer prove that its failure to pay equal wages for equal work is
based on a legitimate reason divorced from sex discrimination--into a
requirement merely that an employer articulate some ostensibly
nondiscriminatory basis for its decisionmaking. The Paycheck Fairness
Act would correct this problem by requiring an employer to show that a
pay differential is truly caused by something other than sex and is
related to job performance. It would in no way prevent an employer from
justifying legitimate pay decisions; it would simply ensure that the
``factor other than sex'' defense could not be used to mask decisions
that in fact rest on discriminatory rationales.
Response to Questions of Senator Clinton by Evelyn Murphy
Question 1. I'd like to direct this question towards Dr. Murphy and
Ms. Samuels. As you heard, Ms. Brown states ``current law is reliable
and effectively remedies discriminatory practices,'' and yet each of
you and your studies show that the wage gap is stagnating and
discrimination remains prevalent today.
And yet, some continue to claim not only that current law is
adequate, but also that legislation to strengthen what we have on the
books now--bills like the ``Paycheck Fairness Act'' and the ``Fair Pay
Act'' are gratuitous. Given what you know about the wage gap, how would
you respond to those who argue that: (a) current law supplies
sufficient protection for women and that (b) additional legislation to
strengthen current law is unnecessary?
Answer 1. Senator Clinton, first allow me to thank you for your
leadership in rekindling American women's quest for pay equity. Through
your initiative, the hearing on the The Paycheck Fairness Act and the
Fair Pay Act has refocused public policy discussion away from its
preoccupation over the last decade with women's qualifications and
commitment to work toward the conditions working women encounter in the
workplaces throughout America. That is a much-needed paradigm shift.
In response to this specific question, Senator Clinton, you are the
lawyer, I am not. So you understand better than I do the tactics of
those who claim that current laws sufficiently protect women. They
shift the burden of proof to those of us who cannot disprove their
claim without data about what is happening to women at work.
The Federal Government does not now collect from employers and make
readily available the essential salary data to disprove this assertion.
EEO-1 filings by employers provide a starting point in examining
workplace discrimination. More salary information from employers still
needs to be collected. The EEOC's track record with protecting the
privacy of information should assure employers that additional company-
specific salary data can be protected, too.
Absent that data, let me raise questions to challenge the assertion
that current laws sufficiently protect women:
1. If current laws provide sufficient protection then the gender
wage gap is not about discrimination at work. So why is the gap still
so large? If the gap were simply about women's qualifications, years of
experience, commitment to work, etc., that is, the ``merit'' arguments,
the overall differences in these measures between year-round, full-time
working men and women have been essentially gone for over a decade. By
``merit'' reasoning, why isn't the wage gap closer to 5 cents than a
gaping 20 cents?
2. In 1999, Professors Alfred and Ruth Blumrosen reported their
analysis of EEO-1 data about the gender and racial composition of job
holders (Executive Summary attached). Using very conservative
methodology, they found a large portion of employers exhibiting de
facto intentional discrimination. How do those who claim that women are
sufficiently protected with current laws refute this documentation that
workplace discrimination exists on a significant scale?
3. For years, national surveys have reported that working women put
pay equity as a top concern and legislative priority. In the recent
WAGE Project survey of over 700 women living and working in every State
in the Nation and in a wide variety of public, private and nonprofit
jobs, 7 out of 10 respondents reported a recent
experience with unfair treatment or pay. (See Executive Report at
http://www.wageproject.org/content/news/ under National Wage Survey
Results, Wage Survey of Working Women Highlights, April 24, 2007.) The
EEOC reports a steady stream of over 23,000 sex discrimination filings
each year for the last decade. Add to that 10,000 retaliation claims
filed each year under title VII. Bear in mind that these figures do not
include the claims of sex discrimination filed with State
discrimination authorities every year. So, when one looks beyond Census
and BLS data, which are used to compare workers' characteristics, and
instead looks at workplace characteristics, there is considerable
evidence that workplace discrimination in America is widespread. If
laws provide adequate protection, why do so many women continue to
claim discrimination? Why don't they feel protected?
Question 2. Ms. Murphy, thank you for your testimony and for
sharing so may women's personal experiences with the wage gap. Their
voice is one that is constantly silenced--be it in the boardroom or on
the assembly line, and we thank you for representing those voices
today. After hearing from you and some of our other witnesses, I think
it's fair to say there is a consensus that: first, the pay gap is not
improving; second, current law is not covering the problem, or at the
very least, is not being used effectively; and third, that's why
Senator Harkin and I have introduced legislation in an attempt to
address this discrimination.
Could you discuss how, from your perspective, the ``Paycheck
Fairness Act'' would help the average female employee who suspects
discrimination from her employer or, worse, a female employee who has
learned of discrimination in her workplace?
Answer 2. I see four significant ways in which the average female
employee who suspects she has been disadvantaged by discrimination by
her employer or knows about the existence of discrimination where she
works could be helped by passage of the Paycheck Fairness Act:
(a) She would be able to share salary information with co-workers
in order to validate or disprove her suspicions without fear of
retaliation; over the last 2 years, I have discussed working conditions
with literally thousands of women in groups of 20-200. On practically
every occasion one woman will say she cannot find out whether her
salary is fair because her employer has threatened her with dismissal
if she mentions her salary to anyone at work. Such threats are
commonplace today in America's offices, plants, and worksites. Because
so many women and their families depend on a woman's paycheck, these
threats effectively stop women from pursuing even reasoned and
reasonable questions about unfair pay.
(b) She would be able to consult the Secretary of Labor's
guidelines on job categories in order to get an external, objective
criteria to compare her job with others. The Secretary's guidelines
would give her a starting point to make sure she is comparing her job
fairly with another--apple to apple--before she compares her salary
with that of a comparable job.
(c) She and her female and male co-workers could urge their
employer to adopt practices which eliminate pay inequities identified
through the research and studies authorized by the Secretary of Labor.
Most importantly, they could urge their employer to adopt the practices
of the company which wins the prestigious national award. Many women do
not want to litigate. They know the financial and emotional price they
would pay. Nonetheless, women do want to change the conditions where
they work so that they and others are treated fairly and equitably. The
prescriptive information generated by the Paycheck Fairness Act would
be a valuable resource to help women change the culture where they
work.
(d) Finally, for women who have substantial evidence of
discrimination and consider litigation, the financial penalties which
would be available to them if their litigation were successful would
pressure employers to resolve pay inequities to avoid costly judgments
or settlements.
Not only would passage of the Paycheck Fairness Act offer working
women added protections and support at work, it would signal employers
and working women alike that Congress intends to pursue its 40-year
agenda to eliminate discrimination against working women until all
vestiges of inequity are erased.
Thank you for this opportunity to respond to questions prompted by
my testimony at the hearing before the U.S. Senate Committee on Health,
Education, Labor, and Pensions. If I can be of further assistance,
please have your staff contact me.
Attachment
The Reality of Intentional Job Discrimination in Metropolitan
America--1999 \*\
---------------------------------------------------------------------------
\*\ This study was supported by a grant from the Ford Foundation to
Rutgers University. The views expressed are those of the authors, not
necessarily those of the Foundation or the University.
---------------------------------------------------------------------------
Alfred W. Blumrosen--Thomas A. Cowan Professor of Law, Rutgers
Law School, Director, Intentional Discrimination Project,
Rutgers Law School
Ruth G. Blumrosen--Adjunct Professor of Law, Rutgers Law
School, General Advisor, Intentional Discrimination Project,
Rutgers Law School
Executive Summary
Intentional discrimination was ``the most obvious evil'' that the
Civil Rights Act of 1964 was designed to prevent. Is intentional
discrimination still a potent force restricting job opportunities for
women and minorities? Or, is it what University of California Regent
Ward Connerly suggested in 1998, ``Black Americans are not hobbled by
chains any longer. We're free to compete. We're capable of competing.
It is an absolute insult to suggest that we can't.'' \1\ Which is it: a
``level playing field,'' or an uphill struggle for women and minorities
against intentional job discrimination that favors whites/males?
---------------------------------------------------------------------------
\1\ Interview on ``60 Minutes'' by Mike Wallace, Aug. 2, 1998,
transcript, p. 22.
---------------------------------------------------------------------------
This question is answered in a 4 year, 1,400 page study of the race
color and sex of employees in large and mid sized private business
establishments--THE REALITIES OF INTENTIONAL JOB DISCRIMINATION IN
METROPOLITAN AMERICA--1999, by Rutgers Law School Professor Alfred W.
Blumrosen and adjunct Professor Ruth G. Blumrosen. Supported by a grant
from the Ford Foundation to Rutgers University, the study is based on
employers' annual reports to the Federal Government involving 160,000
establishments employing 37 million workers. It involved a computer
analysis of these reports, combined with Supreme Court and
Congressional rules to identify ``patterns and practices'' of
intentional job discrimination of the Supreme Court and Congress.
In 1991, Congress confirmed that intentional discrimination exists
when ``race, color, religion, sex or national origin was a motivating
factor for any employment practice, even though other factors also
motivated the practice.'' \2\ ``Intent to discriminate'' is not the
equivalent of ``evil motive,'' where a personal wish or desire to
oppress women or minorities is the only explanation for the harm done.
If an employer has both a legitimate reason for its practices and also
a discriminatory reason, it is engaged in intentional discrimination.
---------------------------------------------------------------------------
\2\ Sec. 703 (m) of Title VII.
---------------------------------------------------------------------------
The study found that intentional job discrimination
continues on a major scale. Blacks, Hispanics, Asian Pacific workers
and White Women who have the knowledge, skills, abilities, and
experience to compete are deprived of that opportunity by intentional
discrimination between a quarter and a third of the time they seek such
opportunities.
In 1999, intentional discrimination affected 2 million
minority and female workers. It exists in every region of the country,
in each of nine occupational categories from officials and managers to
labor and service jobs.
Seventy five thousand establishments discriminated
intentionally against 1.3 million minorities; while 60,000
establishments discriminated intentionally against 952,000 women.
Despite the persistence of intentional discrimination, the majority of
establishments did not appear to engage in it. As a result, minorities
and women have increased their participation in the labor force and in
their proportion in better paying jobs.
Forty industries were ``equal opportunity
discriminators''--discriminating against 75 percent of the Blacks,
Hispanics, Asian-Pacific workers and White women who were affected. The
top 10 of these industries were Hospitals, Eating and Drinking Places,
Department Stores, Grocery Stores, Nursing and Personal Care
Facilities, Computer and Data Processing Services, Hotels and Motels,
Telephone Communications, Commercial Banks and Motor Vehicles and
Equipment Manufacturing.
Medical, Drug and Health related industries alone
accounted for 20 percent of Women, Blacks, Hispanics and Asian Pacific
workers affected by discrimination.
Ninety percent of the affected workers were subjected to
discrimination that was so severe that there was only one chance in 100
that it occurred by accident. That is far more than enough to trigger a
legal presumption of intentional job discrimination.
Between one third and one half of this discrimination was
caused by ``hardcore'' establishments that had been discriminating for
at least 9 years.
Response to Questions of Senator Clinton by Philip Cohen
Question 1. Dr. Cohen, I believe your knowledge of the history of
gender inequality in this country may lend itself well to this
question. Most criticism of legislation aimed at strengthening current
equal pay law is rooted in the belief that such legislation would place
an undue burden on employers.
I think it's critical to note, however, that these bills are not
anti-employer. For example, the Paycheck Fairness Act creates a
``Secretary of Labor's National Award for Pay Equity in the
Workplace.'' This bill is not anti-employer. It's anti-discriminatory
employer--a label I think most, if not all, people in this room would
adopt. In order to achieve pay equity, we have to reward the good
actors as often as we seek to remedy practices by bad ones.
My question to you is whether you agree with this notion. Is their
sociological research that shows rewarding successful companies might
in fact have a positive impact on competitors, if by only leading by
example?
Answer 1. I cannot site a specific study that confirms this
prediction. However, there are two reasons to suspect it is true based
on current research. First, we know that organizations within a field
compete with each other in many ways. To the extent that the treatment
of workers and their compensation is visible to those outside an
organization, more equitable treatment may confer a competitive
advantage on an employer. This could affect who applies for jobs at the
organization, or who patronizes it. We know from some studies that
organizations that hire more female managers have benefited from that
competitively, and that companies hire more female managers when their
clients themselves have more women in leadership positions. Second,
organizations learn from others within their fields, and often copy
each other's practices in order to increase their legitimacy or to
appear in compliance with a changing social or legal environment. All
of this suggests that public recognition of firms dedicated to gender
equity might lead to more widespread adoption of such practices.
Question 2. Related to the idea that work-family flexibility ideas
need to be a part of the solution to the wage gap, this question is for
anyone on the panel.
I recently read in Business Week that Best Buy has started an
endeavor called ROWE--``results-only work environment.'' The ROWE
concept defies the traditional notion that physical presence at work
directly results in productivity. Best Buy is now expanding this
successful experiment to give all employees at its corporate office 100
percent flexibility and the company plans to roll out the clock-free
world to its retail stores. Since the program's implementation, Best
Buy reports that the average voluntary turnover has fallen drastically
and productivity is up an average 35 percent in departments that have
switched to ROWE. Of course, all employees, not just women enjoy this
policy; but surely it helps the mother who is struggling to make it
home on time for her kids while keeping her job.
And Best Buy is not alone--Sun Microsystems Inc. calculates that
it's saved $400 million over 6 years in real estate costs by allowing
nearly half of all employees to work anywhere they want. At IBM, 40
percent of the workforce has no official office.
Can anyone share other stories of corporate efforts to make the
workplace more flexible not just for their female employees, but for
everyone? And do you think these sorts of policies can eradicate the
pay gap?
Answer 2. Not available.
[Whereupon, at 3:25 p.m., the hearing was adjourned.]