POLICY MEMORANDUM
TO: Rep. Charles B. Rangel and the 114th United States Congress
FROM: Arielle Crayton, Tamara Poghosyan, Atara Frank and Erinda Horanlli - Advocates of Equal Pay
RE: Ending the Gender Pay Gap
December 8, 2016
Executive Summary
The gender pay gap that continues to persist is a violation of the social contract that we as Americans subscribe to. This gap can be attributed to the way women are viewed and their changing roles in this country. Although it’s difficult to quantify the specific gender pay gap, it’s clear that discrimination on the basis of gender is very real and the current data available puts it at roughly 79 cents to the dollar. Through research we have found four options that are intended to close the gender pay gap. Strengthening the existing gender discrimination legislation to address loopholes that the current Equal Pay Act does not address, promoting laws that support working families, tackling women’s underrepresentation in high-wage, predominantly male occupations and finally by encouraging women to join unions. The implementation of these policies will gradually help to change society’s antiquated views on how women are perceived.
Problem
Despite the strides that have been made in the United States since the Equal Pay Act of 1963, on average women make 79 cents to a man’s dollar. Equal Pay is seen as an issue that only affects women, but as women have increasingly become the breadwinners or co-breadwinners for their families, equal pay has become a family issue. Making up close to half of American workers, women’s earnings have created an economy 13.5 % larger adding two trillion dollars in GDP to the labor force since 1970. Women should be paid equally for the same work. The Paycheck Fairness Act needs to be passed and policies promoting transparency need to be put in place to reflect and honor the Equal Pay Act for women and all Americans.
While women’s rights are at the forefront of the Equal Pay Act, it must be noted there is also a disparity in pay amongst people of color. Equal pay must include all Americans. On average Black and Hispanic women earn much less than White and Asian men and women. The same goes for Hispanic and Black men, although they make more than their female counterparts respectively. According to the U.S Bureau of Labor Statistics Asian women make 95.3% of white male earnings, White women make 80.8%, black women make 66.8% and finally Hispanic women make 61.5 % of white male earnings. Black men make 73.9% of what White males earn and Hispanic men make 68.5%. The highest earners are Asian men making 117% of white male earnings. All of these figures represent full time workers.
As women become more educated (education allows for an increase in “take home pay”) and are more likely to attend school than men, they still earn less having bachelors and postgraduate degrees in comparison to men. The gap grows wider when looking at black and Hispanic women as mentioned earlier, even amongst workers with the same level of education.
Studies show that regardless of where women work, on average they earn less than men even in professions where women are the dominant group. For example, female elementary and middle school teachers earn 87.2% of what male elementary and middle school teachers make. There is a similar gap with nursing where women make 90.4% of what their male counterparts do.
There are several causes for the pay gap between men and women. The first of which, and most egregious, is discrimination. Research suggests that 38% of the pay gap might actually be caused by discriminatory practices. Lack of transparency in the workplace is partially to blame. Many employees are advised against or even forbidden to see what their co-workers are making. When cases have been brought to court, it was found that many women were and continue to be paid less hourly for the same work. Regardless of skill, there is a lack of access to higher paying jobs and clear discrimination with regard to promotions.
Another reason is that jobs that are predominantly held by women provide less earnings than jobs predominantly held by men or occupations where there is a more mixed or balanced amount of men and women. Women also account for the majority of workers at minimum wage jobs and low income jobs. In fact, it was reported by the Bureau of Labor statistics, that in 2014 women accounted for two thirds of workers being paid minimum wage or below.
Women’s role as the primary caretakers in families also plays a role in the pay gap. 70 % of mothers (whose children are under 18) work and have the responsibility of caring for their children as well as other family members that may be ill, elderly or disabled. Women actually spend twice as much time caring for children than men do. Employers don’t offer many women solutions to this issue despite these statistics. The Family Medical Leave act allows for employees who work in firms that have 50 or more employees to have a guarantee of 12 weeks of unpaid leave. Unfortunately, this only covers 60% of workers, the other 40% face job insecurity when facing childbirth, childcare and family care.
The gender pay gap is harmful not only to women but to families overall. As women are increasingly becoming the breadwinners or co-breadwinners of their families, the gender pay gap only serves to diminish the earnings of families. These are families that have become dependent on women’s salaries. Not paying them equally for the same work is unfair and detrimental to a family’s income and ultimately, well-being. For those who argue that men’s earnings make up for the pay gap in terms of family income, it is important to take into account single mothers. Single mothers now make up a quarter of all households with children. To be the single breadwinner of a family and make less money simply based on your gender in unconscionable. According to the Institute for Women’s Policy Research, in 2014 48.5% of children who are raised by single mothers grow up in poverty. This is a direct correlation to the disparity in pay. Poverty is also more prevalent among women because of the gap. The gender pay gap also plays a significant role in women earning less over their lifetime, as well as creating an income gap during retirement.
Women are essential to the fabric of American society. The facts are clear and we urge you to take them into consideration and pass the Paycheck Fairness Act as well as institute new legislation regarding equal pay that provides for the advancement of not only women but for all Americans. Below you will find several policy options that we feel can remedy the pay gap, tackling equal pay laws, working family laws, under-representation and the unionization of women.
Strengthen Equal Pay Laws
The current equal pay laws need to be strengthened if we’re to achieve any success in reducing the gender wage gap. The legislation that was passed by President Obama, the Lilly Ledbetter Fair Pay Act of 2009, left unaddressed some very important loopholes. We seek to close those loopholes by passing the Paycheck Fairness Act which was first introduced to Congress in 1997, and has been reintroduced multiple times since then, including this year. According to the American Bar Association as well as the ACLU, the important provisions of this act would help address the current EPA shortcomings. Paraphrasedbelow are some of the most crucial benefits of the Paycheck Fairness Act as explained by the American Bar Association:
- Update the definition of a work “establishment”.
Many businesses are located in various areas so clarification is needed that wage comparisons can be done for similar work, regardless of where the business is located. - Clarify the “factor other than sex” defense.
This is a provision that requires employers to demonstrate that any wage differences are based on factors other than sex (acceptable factors would be for instance: education, training, or experience). - Strengthen the remedies available under the EPA to help deter future violations.
Basically this would help enforce financial penalties for violators and it would help to bring gender discrimination along the same lines as racial and ethnic discrimination. - It will update the “class action provisions” of the current EPA.
This will facilitate class action suits and thereby make it easier to fight systemic compensation discrimination based on sex. - PFA will strengthen oversight and enforcement mechanisms.
This provision requires that the Department of Labor and the EEOC collect data on compensation and other employment-related data by race, nationality and sex which will enhance its ability to detect violations and also improve enforcement. The DOL will play a much more active role in fighting gender-based discrimination by requiring research, education, outreach, and public access to compensation information. - PFA prohibits retaliation for disclosure of salary information.
For the most part, there aren’t any current protections for employees that disclose their own wages to colleagues or that inquire about their employers’ wage practices. This provision would offer protection for those circumstances.
Combined, these provisions would offer the necessary transparency that will contribute to the reduction of the wage gap. However, given the incredibly poor track record of congress as well as the fact that the PFA has failed to pass the Senate various times, we imagine plenty of resistance. Any possible objections to the above provisions will likely be presented under the guise of cost. It is a valid concern that these proposals could contribute to some internal cost to businesses when they start auditing their compensation practices. However, this cost would be only temporary and no deadline is being requested for these changes to happen. In the long term, the benefits that the PFA will bring to our society far outweigh any temporary incurred costs.
Strengthen Work-Family Policies
Equal pay is a family issue. Women make up almost half of the work force and most of the U.S’ children live in a home where their mother works. Women are statistically the majority of caregivers not only to their children but also to sick family members. Supporting families and implementing paid sick leave as a mandatory benefit for employees would allow women, families and American businesses to flourish. While five states have adopted paid sick days, there are millions of citizens that are unable to benefit from these policies.
There are a number of benefits that paid sick days would provide to workers as well as employers. When employees are sick and can’t afford to stay at home (workers without paid sick leave are 1.5 times more likely to go to work sick), there is risk of spreading illness within the workplace. If the paid sick leave was put into place, the likelihood of workers spreading sickness would be greatly diminished. In addition, productivity will increase. When employees attend work sick, they tend to not be as effective. Reports show that workers lose on average 1.3 hours of work a week when going to work sick. It must also be noted that along with productivity, paid sick days would also provide a safer environment as healthy workers cause less work-related injuries. Whether having to take a leave for personal illness or to care for an ill family member, in certain cases taking time off can lead to an employee’s termination or resignation. If paid sick leave were put into place according the Medical Expenditure Panel survey, the likelihood of “Job separation” would decrease by 25%. This means that the job turnover rate would also be reduced. This benefit is twofold as it serves the employer and employee. When families are allowed paid sick time off they are able to stay financially stable.
On the whole, paid sick leave allows for the improvement of public health as it encourages preventative care services by enabling workers to get more regular checkups. This would be an enormous benefit to the economy as well. A study from 2011 showed that emergency room visits were lower among workers with paid sick leave. 1.3 million visits to the ER could have been prevented altogether if more individuals had access to preventive care. Consider that an estimated $1.1 billion extra is spent on top of regular doctor’s office visit. Also worth considering is that $500 million of that $1.1 billion were in fact funded by programs like Medicaid.
While paid sick leave is beneficial to employees, and in many instances also to employers, many would argue that paid sick leave will not help to end the pay gap, and that it is implausible for certain employers. One such argument is that mandated paid sick leave will force the prices of services to go up, causing a reduction in work hours and in benefits as a whole. There is also the possibility of employers laying off workers if they are forced to cover paid leave. This is particularly a concern for low wage jobs (a study in San Francisco showed 30% of low wage workers reporting layoffs and reduced hours). The study also shows that a scale back on bonuses and vacation pay could also be a result of paid sick leave. Part time work, which many Americans rely on, could also be reduced. Finally, the one size fits all approach for paid leave is something that both employers and employees could be deterred by. There is the argument that employees may prefer take home pay rather than more benefits.
Tackle Women’s Underrepresentation in High-Wage, Predominantly Male Occupations
There are a number of different programs and opportunities that can help open up more options for women thus making it easier for them to get jobs in nontraditional fields that are also higher paying jobs. Mainly males occupy these jobs and it is that much harder for a woman to claim such a desired position. A great example of a program would be the reauthorization of the Carl D. Perkins Career and Technical Education Act of 2006. The Perkins Career and Technical Education Act was a source of federal funding to states and grantees for the promotion of secondary and postsecondary education. This applied specifically for career and technical based studies (for example, construction, plumbing, STEM research, etc.) Unfortunately, this grant was stopped due to the lack of funding. Recently, however, Advance CTE, joined by ACTE, developed the FY 2016 funding request to encourage Congress to restore the funds to the Carl D. Perkins grant. If this grant were to be reinstated it might make it easier for women to obtain slots in technical careers because there will be more funding and more opportunities.
While this grant and other opportunities like it would be extremely helpful to women to obtain jobs, the same downfalls as before still exist. This option presents a twofold issue: Firstly, who’s to say that women will get an opportunity to participate in the grant just because the funding is restored? If the gender pay gap is largely based off of the fact that men are more competent than women and make better employees, then the slots in the program can still go to men before women which will result in the same issue. Secondly, even if women manage to obtain more slots and they receive the necessary education and even manage to secure themselves a decent job; there’s no guarantee that the pay gap will be reduced and women will be paid an equal salary as their male coworkers.
Unionization of Working Women
What is a union? It is an organized association of workers formed to defend and promote their rights and interests. In order to organize a union common cause must be present. First of all organizational committee must be formed. In order to get help which union to join American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) will provide detailed information on individual unions or will help one to organize a new union. There are many AFL- CIO local offices around the country that help workers to come together with a common cause and create a Union.
Unionizing women is a sound and solid strategy that decreases the wage gap that exists between men and women in the workforce. This is due to the fact that when women are members of workers unions, they are paid on average a 13% higher wage than women who are non-unionized, rendering their salaries higher and decreasing the gap (Jones, Schmitt, Woo, 2013). In 2014, women earned 24% more than their non-unionized counterparts (DPE.com, 2015). Furthermore, women who are members of workers unions are more likely to receive health insurance, and are also more likely to enroll in a retirement savings plans such as a 401-K (Jones, Schmitt, Woo, 2013). Based on these three reasons, it is apparent that unionizing women is one of the best ways to decrease the pay gap since it allows them to receive benefits that are both sound for their pockets and their short-term and long-term health.