On March 11, the Senate Health, Education, Labor, and Pensions Committee held a hearing, “A Fair Share for All: Pay Equity in the New American Workplace.”
Chair Tom Harkin (D-IA) said, “America’s women are working harder than ever, but they’re not being fairly compensated for their contributions to our economy. As a result, their families are struggling to put food on the table, pay for child care, and deal with rising health care bills. This isn’t fair, and it isn’t right. Now, it is true that some of the wage gap is explained by how society deals with the realities of working woman’s lives, such as time away from the workforce to have children and care for family members. But, as we will hear today, the substantial gap in earnings between men and women cannot be explained completely by differences in work patterns, or even by differences in education, experience, or occupation. The evidence shows that actual gender discrimination accounts for much of the disparity between men and women’s pay, and our laws have not done enough to prevent this discrimination from occurring.” He added, “That is why I strongly support the Paycheck Fairness Act [H.R. 12/S. 182], which Senators [Chris] Dodd [(D-CT)] and [Barbara] Mikulski [(D-MD)] have long championed. This critical legislation will strengthen penalties for discrimination and help give women the tools they need to identify and confront unfair treatment. In January, the House of Representatives voted overwhelmingly, on a bipartisan basis, to pass the Paycheck Fairness Act, and I look forward to working with my colleagues in the Senate to pass this bill and send it to the President during this Congress.”
“Undeniably, the last several decades have been transformational with regard to women’s opportunities,” said Ranking Member Mike Enzi (R-WY). “Today, more women than men are earning college degrees, and women are enrolling in many graduate degree programs in equal numbers. At some of the nation’s top law schools today, women students outnumber men. As women have become commonplace at every level of the workplace, so have women’s earnings increased in comparison to men’s. Last month I noticed several news articles reporting that the number of dual income families where the wife out earns the husband has increased from four percent in 1970 to 22 percent in 2009. So times have changed, and certainly it is appropriate for this committee to survey the fairness of the American workplace. Some argue that a pay gap continues to exist in terms of compensation levels between men and women, and that this proves current legal protections are not sufficient and must be augmented. Many labor specialists note that pay differentials are a function of labor market economics, that they reflect the choices that individual workers and groups of workers tend to make and their underlying skill sets. A study released last year found that if you factor in observable choices such as part time work, seniority, and occupational choice, the pay gap stands between five to seven percent. I believe the best way to address that gap is by encouraging women to enter higher earning fields.”
Rep. Rosa DeLauro (D-CT), sponsor of the Paycheck Fairness Act, said, “Very early in this Congress, we passed the Lilly Ledbetter Fair Pay Act [P.L. 111-2], ensuring that women who are discriminated against have the right to sue as long as their discriminatory pay continues. But this critical law reaffirming a right which had been denied in a shortsighted 2007 Supreme Court decision only brings us back to where we had been all along. By contrast, the Paycheck Fairness Act will represent real progress for women who fight pay discrimination in the work place every day. It would clarify the ‘any factor other than sex’ defense, so that an employer trying to justify paying a man more than a woman for the same job must show the disparity is not sex-based; that it is job-related and necessary for the business. It would also prohibit employers from retaliating against employees who discuss or disclose salary information with their co-workers. Of course, employees such as HR [human resource] personnel who have access to payroll information as part of their job would not be protected if they disclose workers’ salaries [to] other workers…The Paycheck Fairness Act would also strengthen the remedies available for women to include punitive and compensatory damages. In other words, this Act brings equal pay law into line with other civil rights law, and provides to victims of sex-based discrimination the same standards for lawsuits and options for damages that are already afforded to victims of race-based discrimination.”
Stuart Ishimaru, acting commissioner of the Equal Employment Opportunity Commission (EEOC), discussed the commission’s role in private sector discrimination cases, saying, “Over the last three fiscal years, the EEOC has experienced a 30 percent increase in gender-based wage discrimination charges. Most recently, in FY2009, the EEOC received 2,252 sex-based pay discrimination charges out of a total of 93,277 total charges. Of those, 944 charges alleged violations of the EPA [Equal Pay Act (P.L. 88-38)] specifically (roughly one percent of total receipts). Through our administrative enforcement process alone in 2009, the EEOC obtained almost $19 million in monetary benefits for victims of wage discrimination. Settlements and judgments obtained in litigation make this figure even greater. A number of reasons may account for the relatively small number of wage claims the EEOC receives, but the single biggest challenge the EEOC faces in identifying wage discrimination is the secrecy that surrounds pay information in the workplace. Many workers operate under strict instructions not to discuss their pay with their co-workers, and fear retaliation if they go against those instructions. For this reason, many people earn less for potentially discriminatory reasons for many years without knowing it, just as Lilly Ledbetter did until an anonymous co-worker left her a note telling her the salaries of some of her male peers. These policies that prevent workers from discussing pay create a serious barrier to charge filing under our equal pay laws. We also face broader systemic barriers in the private sector due to inadequate data on wages. While some data is available in the aggregate, federal agencies have very little in the way of company-specific wage data in the private sector, and this hinders systemic enforcement efforts by the Commission in the realm of wage discrimination.” He also said that the EEOC “plays an important role in enforcing equal pay laws for federal employees through our federal sector hearings program, our federal sector appeals program, and our federal sector training programs,” but noted that “federal sector pay discrimination complaints are relatively rare, due in part to the transparency of the GS pay scale.”
“If I believed the Paycheck Fairness Act would advance the goal of eradicating gender discrimination in the workplace, I would ardently support the measure not just for myself and others like me, but for my two daughters and women of their generation,” said Jane M. McFetridge, a partner at Jackson Lewis, LLP in Chicago. “However, based upon my own personal experience, as well as my legal work representing employers, it is my unequivocal belief that passage of the Paycheck Fairness Act is not the solution. The Paycheck Fairness Act would preclude employers from making market-based pay determinations, encourage frivolous litigation, and expose companies to financial ruin by way of uncapped punitive damages and massive class action litigation. Rather than eliminating discrimination, the legislation, if passed, would provide a windfall to attorneys who litigate employment discrimination cases, but result in no meaningful change in the extant wage differential. Furthermore, the Paycheck Fairness Act would levy enormous costs on companies and employers already reeling from the worst economic crisis we have seen in most of our lives…Though we are not quite at the finish line, the existing legal framework has proven successful in narrowing the wage gap and compensating victims of unlawful discrimination.”
Ms. McFetridge added, “Proponents of S. 182 often-cite that, despite the existing legal framework, women continue to make only 77 percent of men’s wages. Not only is this figure overly simplistic in that it is based on the median earnings of men and women as compiled by the U.S. Census Bureau, but the statistic is bandied about as if it were an automatic indication of employers’ discrimination against women. This is simply not the case…Indeed, the U.S. Department of Labor (DoL) has recognized that while the median usual weekly earnings for women working full-time in 1970 was only 62.1 percent of those for men, the raw wage gap had shrunk from 37.9 percent to just 21.5 percent by 2007. Moreover, there are observable differences in the workforce attributes of men and women that account for much of the remaining wage gap. According to a January 2009 report prepared for the DOL by CONSAD Research Corp., these variables include: [a] greater percentage of women than men work part-time, which tends to pay less than full-time work; [a] greater percentage of women than men tend to leave the labor force for childbirth, or to care for their children or elderly relatives. Part of the wage gap is explained by the percentage of women who were not in the labor force during previous years, the number of children in the home, and the age of women; [and] [w]omen, especially working mothers, tend to value ‘family friendly’ employment policies more than men, and are often willing to accept a lower paying job in return for such policies. Part of the wage gap is therefore explained by industry and occupation, particularly, the percentage of women who work in a particular industry and occupation…After adjusting for these non-discriminatory variables, the adjusted gender wage gap is between 4.8 and 7.1 percent, and some, or all, of the remaining differential may be explained by factors not included in the CONSAD study due to data limitations.”
Ms. Fetridge continued, “It is my firm belief that any wage gap between men and women is unacceptable. However, it is important that we talk about real numbers and not the misleading ‘raw wage gap’ proponents of the Paycheck Fairness Act repeatedly point to. Employers cannot control their employees’ educational and career choices. Nor can employers interfere with an employee’s choice to enter or leave the workforce, or work a part- or flex-time schedule, in order to care for her family. All an employer can do is pay two similarly-situated employees the same salary regardless of gender. That is what the law requires. Based on the results of the CONSAD and GAO [Government Accountability Office] studies, this is also what most employers appear to be doing. As the DOL stated in its Foreword to the CONSAD report, ‘[T]he raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of individual choices being made by both male and female workers.’”
Heather Boushey, senior economist at the Center for American Progress, discussed pay discrepancies in the context of the current economic crisis, saying, “The Great Recession…has made pay equity even more urgent because women recently became half of all U.S. payroll workers. This feat, recorded for the first time in October 2009, sadly was not because more women were finding more and better paying jobs. Instead, since December 2007 when the Great Recession began, men have accounted for seven out of every ten jobs lost. The reason for this is because half of all job losses have been in construction or manufacturing industries that disproportionately employ men…This gender disparity in unemployment has real implications for family economic well-being. In the first five months of 2009, there were two million working wives with an unemployed husband. If these families are typical, then they are living on the wife’s lower earnings and likely to be without health insurance because the family secured that employer-provided benefit from his job. The upshot: In the typical married-couple family where both spouses work, the wife brings home less than half 42.2 percent of the family’s earnings, which means families are indeed experiencing an economic hardship directly because of the gender pay gap and are dangerously exposed to the financial pitfalls of a medical emergency. Nor are women working outside the home a short-term blip in response to the recession. It is a long-term trend that shows no signs of reversing. The reality is that women support families in greater numbers than ever before. We need to do more to ensure pay equity for them and for the economic security of their families. The gender pay gap is not just a women’s issue. This is a pressing family issue for working Americans striving to enter or remain in the middle class. For many families, having a working wife has makes all the difference. When we look across income distribution in our country, families in the higher income brackets are more likely to have a working wife and she puts in more hours than less-well off families. In recent decades, the families that were upwardly mobile were those who had a working wife. Recent research by economists at the Boston Federal Reserve shows that over the 1980s and 1990s, the families that moved up the income ladder were those who had a working wife. The shift in women’s workforce participation is not simply about women wanting to work but also about their families needing them to work.”
Deborah Frett, chief executive officer of the Business and Professional Women’s Foundation, and Deborah Brake, a professor of law at the University of Pittsburgh, also testified.