Nov 17, 2010
U.S. Government Cholera Outbreak and Hurricane Preparedness Update
Tuesday Talks: The National Medals Laureates of Science, Technology and Innovation http://goo.gl/fb/q6Tix
Cutting Earmarks http://goo.gl/fb/lfpZV
Press Gaggle by the President en route Andrews Air Force Base http://goo.gl/fb/2Vm2V
APEC/Yokohama: The Leaders' Growth Strategy http://goo.gl/fb/Aebfw
Washington's Equal Pay Obsession - There's no epidemic of gender discrimination. So why is Congress proposing another law?
WSJ, Nov 16, 2010
Women in the workplace don't face rampant pay discrimination, and yet the Senate may soon pass a bill—already passed in the House—premised on the erroneous charge that they do. The Paycheck Fairness Act (PFA) would be a harmful addition to the many federal laws that already protect women and men from labor-market discrimination.
The original Equal Pay Act of 1963 made it illegal for firms to pay different wages to women and men who performed equal work on jobs in the same establishment. Title VII of the 1964 Civil Rights Act outlawed discrimination against women and minorities in all aspects of employment, including hiring, promotion and compensation. Additional protections came with the 1978 Pregnancy Discrimination Act; the 1991 amendments to Title VII, which boosted penalties for discrimination; and the 2009 Lilly Ledbetter Act, which essentially eliminated the time limit for filing discrimination claims.
In addition, for more than 40 years two major federal agencies have been dedicated to fighting labor-market discrimination: the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance.
Why do we need still more legislation? The reason, say the bill's sponsors, is that women earn 77% as much as men, according to the Bureau of Labor Statistics. But this figure refers to the annual earnings of full-time, year-round workers. It doesn't compare comparable men and women, and it doesn't reflect that full-time men work 8%-10% more hours per week than full-time women.
It also doesn't reflect what research of mine and others have shown: Men typically accumulate more continuous work experience and therefore acquire higher productivity in the labor market. In fact, the gender gap shrinks to between 8% and 0% when the study incorporates measures such as work experience, career breaks and part-time work.
The most important source of the gender wage gap is that women assume greater responsibility for child-rearing than men. That influences women's extent and continuity of work, which affects women's skills and therefore wages. In addition, women often seek flexible work schedules, less stressful work environments, and other conditions compatible with meeting the demands of family responsibilities. Those come at a price—namely, lower wages.
The PFA ignores research showing that factors other than discrimination explain the current gender wage gap. The bill would force employers to raise women's pay by sharply reducing their ability to defend what they believe is a justified differential in pay based on merit.
Under the existing Equal Pay Act, an employer charged with gender discrimination in pay can defend himself or herself by offering evidence that the differential is based on nondiscriminatory factors such as work experience and education. But the PFA limits the use of these bona fide factors by requiring that employers demonstrate that they are job-related necessities.
The PFA also empowers complaining employees to propose alternative methods of determining pay that, if accepted by courts, would presumably be imposed on employers. This unprecedented shift in bargaining power would lead to endless lawsuits.
So would the PFA's changes to the rules governing class-action lawsuits. Under the Equal Pay Act, workers are included in class-action suits only if they opt in. Under the PFA, they would be included automatically—just for being women in a firm that is being sued. And the act provides for compensatory and punitive damages, apparently without limit.
A particularly ridiculous provision would authorize grants to "eligible entities"—supporters of the bill like the American Association of University Women—for training women in negotiation skills. Men are excluded. But if women are the equal of men, why do only they need such training?
So the PFA is not fair, sensible or warranted, and it will impose great costs on employers. Some firms undoubtedly discriminate against women, but their number is small and the federal government's existing antidiscrimination apparatus is more than adequate. This new legislation would simply provide a feast for lawyers—and, by increasing the cost of employing women, would likely harm its intended beneficiaries.
Ms. O'Neill is a professor of economics at Baruch College and an adjunct scholar at the American Enterprise Institute.
APEC Leaders Declaration: "The Yokohama Vision - Bogor and Beyond" http://goo.gl/fb/6fIGG
Trans-Pacific Partnership: Progress Towards a Regional Agreement http://goo.gl/fb/xSYB6
Remarks by President Obama and President Medvedev of Russia After Bilateral Meeting http://goo.gl/fb/1cHt8
Statement by the President on the release of Aung San Suu Ky http://goo.gl/fb/kAse9
Conservatives on Federal President's Asia trip: A Failing Agenda Fails
Alzheimer's Disease: Nearly 100 New Medicines - New treatments needed to avert "national crisis"
The Obamacare Burden To Your State Budget