Kathleen Geier,  May 27, 2014

Getting Real about Closing the Gender Pay Gap

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The reasons why Jill Abramson was abruptly fired from her position as executive editor of the New York Times remain unclear, but a pay dispute is alleged to be among them. According to The New Yorker’s Ken Auletta, Abramson’s starting salary in 2011 when she began the job was $475,000; her predecessor, Bill Keller, was making $559,000. When Abramson complained, her salary was bumped up—but only to $525,000. A representative for the Times has denied that pay was a factor. But if Abramson was indeed being paid considerably less for doing the same job as a man, she is hardly alone.

There is an 18 percent pay gap between men and woman on the list of best-paid executives in the S&P 500, and a 31 percent pay gap among CEOs. Women at every earnings level suffer from serious pay inequities. There is even, God help us, a gendered pay gap in children’s allowances. In the aftermath of second wave feminism, women made dramatic progress in closing the gender pay gap, but in recent years, there has been little improvement. The ratio of women’s to men’s median earnings for full-time workers is 82 percent for weekly earnings and 76 percent annually. Those numbers have barely budged from a decade ago.

Democrats, sensing women’s frustration at this dismal state of affairs, have made the gender pay gap a campaign issue this election season. Their attention to the issue, after years of neglect, is welcome. Unfortunately, the remedy they offer is inadequate. The Democrats are pushing for a piece of legislation called the Paycheck Fairness Act, which would make wages more transparent, protect workers who raise questions about gender pay equity from retaliation by the employer, and require that gender wage inequities have a business justification.

Those are all steps in the right direction, but they’re not enough. Those changes would level the legal playing field for workers filing sex discrimination lawsuits, but they wouldn’t make structural changes to the American workplace. In order to make real progress in closing the gap, structural changes are needed.

What kind of changes? Here’s one that rarely gets mentioned in the context of the gender gap debate, but is very important: labor unions. A recent analysis showed that women who belong to unions enjoy significantly higher pay compared to their non-union counterparts, and that the finding holds for women at every educational level—from high school dropouts to those with graduate degrees.

Unions tend to be good for women’s wages for two reasons. One is that the wage scale for union employees is more compressed—the lowest paid workers get more, and the highest paid workers get less. Women, alas, are often at the bottom of the earnings scale and rarely at the top, so this works to their advantage. The other reason is that, in unionized workplaces, the rules for raises and promotions are more transparent and systematized. When the criteria for pay and workplace advancement are clear and objective, there is less room for sexist bias to affect the results. That’s why reforming labor laws so that it’s easier to join a union is a feminist issue.

A second structural change that would help close the gender gap is pay equity. Formerly known as “comparable worth,” pay equity helps alleviate a huge problem, which is that female-dominated occupations tend to be poorly paid, regardless of the skills and training they require. Pay equity requires employers to rate jobs based on the skills, experience, and responsibilities they require, and set pay accordingly. That way, clerical workers, for example, would not necessarily be compensated less than truck drivers, and women’s and men’s sports coaches would be paid the same.

As Bryce Covert recently reported for ThinkProgress, during the 1980s, about twenty state governments adopted pay equity policies for public sector employees. Pay for the women affected was significantly increased, and the gender wage gap in those states narrowed. But during the antifeminist backlash of the 1980s, pay equity campaigns in other states faltered, and the courts became hostile to the concept as well. Pay equity laws are still on the books in many states, but they have become less effective because, as Covert notes, adjustments to the process need to be made regularly, and Minnesota is the only state that still does that.

The effectiveness of pay equity laws also been limited by their restriction to public employees; to achieve maximum effectiveness, they need to be expanded to cover the private sector as well. A piece of federal legislation called the Fair Pay Act would do just that. It gets introduced during every session of Congress, but it never goes anywhere.

A third major reform that would narrow the gender gap is increased workplace flexibility. A big new study by Harvard economist Claudia Goldin found that the main factor driving the persistence of the gender pay gap was the lack of workplace flexibility [PDF]. Flexibility refers to the time and place where work is done, and the number of hours that full-time employees are require to work. Occupations and sectors that require a lot of in-office “face time,” that don’t offer employees much control over their schedule, and that require long hours, tend to suffer from the biggest gender pay gaps. To narrow the pay gap, women need more workplace flexibility, and Goldin is even argues that this kind of a change ”does not (necessarily) have to involve government intervention.”

Unfortunately, such optimism is unwarranted. As the New York Times recently reported, few employers offer flexible workplace policies, and those that do tend to offer them only to select employees. In recent years, employers have cut back on some types of benefits that promote flexibility, such as paid family leave. The reality is that few employers are going to grant these benefits out of the goodness of their hearts. We need legislation to guarantee that every worker has a right to them. A paid family leave law and a European-style cap on work hours (six of the ten economies ranked most competitive in the world limit the work week to forty-eight hours) would be great places to start.

It’s been over fifty years since gender-based pay discrimination was made illegal under the Equal Pay Act. Clearly, for women, formal equality under the law is not enough. Major institutional changes in the workplace are vital to transforming the notion of equal pay for women from a quaint legal theory into a meaningful lived reality. Let’s hope women don’t have to wait another fifty years for those changes to occur.

The reasons why Jill Abramson was abruptly fired from her position as executive editor of the New York Times remain unclear, but a pay dispute is alleged to be among them. According to The New Yorker’s Ken Auletta, Abramson’s starting salary in 2011 when she began the job was $475,000; her predecessor, Bill Keller, was making $559,000. When Abramson complained, her salary was bumped up—but only to $525,000. A representative for the Times has denied that pay was a factor. But if Abramson was indeed being paid considerably less for doing the same job as a man, she is hardly alone. There is an 18 percent pay gap between men and woman on the list of best-paid executives in the S&P 500, and a 31 percent pay gap among CEOs. Women at every earnings level suffer from serious pay inequities. There is even, God help us, a gendered pay gap in children’s allowances. In the aftermath of second wave feminism, women made dramatic progress in closing the gender pay gap, but in recent years, there has been little improvement. The ratio of women’s to men’s median earnings for full-time workers is 82 percent for weekly earnings and 76 percent annually. Those numbers have barely budged from a decade ago. Democrats, sensing women’s frustration at this dismal state of affairs, have made the gender pay gap a campaign issue this election season. Their attention to the issue, after years of neglect, is welcome. Unfortunately, the remedy they offer is inadequate. The Democrats are pushing for a piece of legislation called the Paycheck Fairness Act, which would make wages more transparent, protect workers who raise questions about gender pay equity from retaliation by the employer, and require that gender wage inequities have a business justification. Those are all steps in the right direction, but they’re not enough. Those changes would level the legal playing field for workers filing sex discrimination lawsuits, but they wouldn’t make structural changes to the American workplace. In order to make real progress in closing the gap, structural changes are needed. What kind of changes? Here’s one that rarely gets mentioned in the context of the gender gap debate, but is very important: labor unions. A recent analysis showed that women who belong to unions enjoy significantly higher pay compared to their non-union counterparts, and that the finding holds for women at every educational level—from high school dropouts to those with graduate degrees. Unions tend to be good for women’s wages for two reasons. One is that the wage scale for union employees is more compressed—the lowest paid workers get more, and the highest paid workers get less. Women, alas, are often at the bottom of the earnings scale and rarely at the top, so this works to their advantage. The other reason is that, in unionized workplaces, the rules for raises and promotions are more transparent and systematized. When the criteria for pay and workplace advancement are clear and objective, there is less room for sexist bias to affect the results. That’s why reforming labor laws so that it’s easier to join a union is a feminist issue. A second structural change that would help close the gender gap is pay equity. Formerly known as “comparable worth,” pay equity helps alleviate a huge problem, which is that female-dominated occupations tend to be poorly paid, regardless of the skills and training they require. Pay equity requires employers to rate jobs based on the skills, experience, and responsibilities they require, and set pay accordingly. That way, clerical workers, for example, would not necessarily be compensated less than truck drivers, and women’s and men’s sports coaches would be paid the same. As Bryce Covert recently reported for ThinkProgress, during the 1980s, about twenty state governments adopted pay equity policies for public sector employees. Pay for the women affected was significantly increased, and the gender wage gap in those states narrowed. But during the antifeminist backlash of the 1980s, pay equity campaigns in other states faltered, and the courts became hostile to the concept as well. Pay equity laws are still on the books in many states, but they have become less effective because, as Covert notes, adjustments to the process need to be made regularly, and Minnesota is the only state that still does that. The effectiveness of pay equity laws also been limited by their restriction to public employees; to achieve maximum effectiveness, they need to be expanded to cover the private sector as well. A piece of federal legislation called the Fair Pay Act would do just that. It gets introduced during every session of Congress, but it never goes anywhere. A third major reform that would narrow the gender gap is increased workplace flexibility. A big new study by Harvard economist Claudia Goldin found that the main factor driving the persistence of the gender pay gap was the lack of workplace flexibility [PDF]. Flexibility refers to the time and place where work is done, and the number of hours that full-time employees are require to work. Occupations and sectors that require a lot of in-office “face time,” that don’t offer employees much control over their schedule, and that require long hours, tend to suffer from the biggest gender pay gaps. To narrow the pay gap, women need more workplace flexibility, and Goldin is even argues that this kind of a change ”does not (necessarily) have to involve government intervention.” Unfortunately, such optimism is unwarranted. As the New York Times recently reported, few employers offer flexible workplace policies, and those that do tend to offer them only to select employees. In recent years, employers have cut back on some types of benefits that promote flexibility, such as paid family leave. The reality is that few employers are going to grant these benefits out of the goodness of their hearts. We need legislation to guarantee that every worker has a right to them. A paid family leave law and a European-style cap on work hours (six of the ten economies ranked most competitive in the world limit the work week to forty-eight hours) would be great places to start. It’s been over fifty years since gender-based pay discrimination was made illegal under the Equal Pay Act. Clearly, for women, formal equality under the law is not enough. Major institutional changes in the workplace are vital to transforming the notion of equal pay for women from a quaint legal theory into a meaningful lived reality. Let’s hope women don’t have to wait another fifty years for those changes to occur.

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