Senate Democrats

Fair Pay for Women and All Americans is Critical to Our Nation’s Economic Recovery

Equal Pay Day – celebrated this week on April 28, represents the day on which women’s earnings catch up to men’s earnings from 2008.  Put another way, it has taken the average American woman nearly 17 months to earn what the average American man earned in 12 months.  This disparity not only places women at a significant economic and social disadvantage, it hurts families and is slowing our nation’s economic recovery. 

“[I]n this economy, when so many folks are already working harder for less and struggling to get by, the last thing they can afford is losing part of each month’s paycheck to simple and plain discrimination.” President Barack Obama at the Signing Ceremony for the Lilly Ledbetter Fair Pay Act of 2009 (January 29, 2009), available here.

Early this year, the Democrat-led Congress passed the Lilly Ledbetter Fair Pay Act, which restored the ability of workers to effectively seek legal redress for pay discrimination on the basis of sex, race, religion, age, or disability.  Signed into law on January 29 by President Barack Obama, Ledbetter was one of the first major achievements of the 111th Congress and the Obama Administration, and embodied the economic and social change Americans hoped for when they went to the polls on November 4, 2008. 

“[In] signing this bill today, [we are] send[ing] a clear message: … making our economy work means making sure it works for everybody; … there are no second-class citizens in our workplaces; and … it’s not just unfair and illegal, it’s bad for business to pay somebody less because of their gender, … age, … race or their ethnicity, religion or disability[.]” President Barack Obama at the Signing Ceremony for the Lilly Ledbetter Fair Pay Act of 2009 (January 29, 2009), available here.

Though a victory for the American people, Ledbetter represents only one step in the ongoing battle to end pay discrimination in the workplace and repair our nation’s struggling economy.  As Congressional Democrats work with Republicans, the President, employers, and employees to advance pay equity through education and legislation, the American people can be assured we are committed to making sure that all Americans receive equal pay for equal work.

 

Male

Female

%

All

$44,255

$34,278

77.5%

White alone

$50,139

$36,398

72.6%

Black

$35,652

$31,035

87%

Hispanic

$29,239

$25,454

87.1%

Asian

$51,174

$40,664

79.5%

U.S. Census Bureau, 2007 American Community Survey, available S.2002&-ds_name=ACS_2007_1YR_G00_&-CONTEXT=st&-tree_id=307&-redoLog=true&-geo_id=01000US&-format=&-_lang=en" target="_blank">here.
STATE DATA: How large is your state’s wage gap? Visit U.S. Census Bureau, 2007
American Community Survey, Fact Finder, available
here.

America’s women are working hard but earning less.  According to the Census and the Bureau of Labor statistics, American women who work full time earn only 78 cents for every dollar a man makes annually (78% of men’s earnings).  While the percentage may change when broken-out by race, women earn less than men regardless of race or ethnicity. 

Wage disparities appear immediately after college and continue to widen over a woman’s lifespan.  In their “Behind the Pay Gap”report, the American Association for University Women (AAUW) found that female college graduates earned only 80 percent of what their male counterparts earned one year after graduation.  Ten years later, that disparity grew to 69 percent.  Because retirement benefits are tied to earnings, women also earn fewer Social Security and pension benefits.[1] 

It must also be acknowledged that women’s “choices,” especially within the family context, are often driven by their inability to earn as much as their husbands or significant others, e.g. families will naturally prioritize the higher-income job in daily and long-term decisions.  Testimony of Lisa Maatz, AAUW, before the Joint Economic Committee (April 28, 2009), available here.

Different choices are not completely to blame for different earnings.  According to the AAUW, while a good portion of pay disparity can be attributed to personal choices (such as college major, educational attainment, occupation, family, hours worked, and continuity) and other factors (such as race and age), a twelve percent difference in earnings at the ten-year mark is still left unexplained once all of those factors are taken into account.[2]  And this may be a conservative figure, as a 2003 GAO study estimated the unexplained gap at nearly 20 percent.[3]  Many researchers have attributed this disparity to discrimination, whether in the form of outright bias against women or a subconscious suppression of salaries for female-dominated jobs, even though those jobs are equivalent to male-dominated jobs.  Janitors are traditionally paid more than housekeepers, for example, even though the work is similar.[4]

Moreover, gaps are consistently found between men and women who hold the same occupation.  Indeed, men outpace women in earnings in almost every occupation from the highest-paying – where women earn between 64.4 (physicians and surgeons) to 86.9 (computer and information systems managers) percent of men’s earnings – to the lowest-paying – where women earn between 83.3 (laundry and dry cleaning workers) to 91.8 (food preparation workers) percent of men’s earnings.[5]  Disparities even exist in professions where women make up a super-majority of the field.  As of 2007, female elementary and middle-school teachers earned nearly 10 percent less than their male colleagues; and female registered nurses earned more than 10 percent less than their male colleagues.[6]

Pay equity is not only important to women, it is important to families and to our nation’s economic recovery.    The Institute for Women’s Policy Research has estimated that if women – who make up nearly half of the nation’s workforce – were to be paid equally for equal work, the typical woman would gain $5,710 per year and $210,ooo over Her.35-year working lifetime.[7] 

While critical to the economic stability of all women, this additional money is especially important to single mothers.  One-third of all American households are headed by women, and one-quarter of those households include dependent children.[8] 

In the recession that began in December 2007, jobs for men have suffered a 2.2 percent decrease, as jobs for women have suffered a .7 percent decrease. “Equal Pay for Breadwinners,” Center for American Progress, January 2009, available here.

Even when women are married, families depend on their income to survive.  Sixty-four percent of married women work outside of the home, and their incomes contribute 35 percent of their families’ total income.  This contribution has and will continue to increase in the current recession, however, as men have comprised the majority of workers who have lost their jobs due to a disproportionate loss of jobs in male-dominated fields, e.g. construction and car dealerships. Traditionally female-dominated sectors, like the health care sector, have seen fewer cut-backs.  Thus, as women increasingly take on the role of breadwinner, pay inequity is making less and less sense and hurting more and more Americans. [9] 

People of color are hardest hit by the wage gap.  Gender bias is not the only factor impacting women’s earnings; race and ethnicity play a significant role.  African American women earn only 62 percent of white men’s earnings, and Latino women earn only 51 percent. Comparing women to women, African American women earn 85 percent of white women’s earnings, and Latino women earn only 70 percent. [10]  Women of color – who are more likely to be single parents or unmarried without children – are at an even greater disadvantage.

Though this report is primarily focused on women, pay inequity exists amongst male workers by race and ethnicity as well.  Black and Hispanic men earn a very low percentage of white men’s earnings: 71 percent and 58 percent, respectively.[11]  While these differences can be attributed in part to educational attainment and occupation, as with the gender wage gap, “choices” alone do not fully explain the depth of the disparity.  Subconscious bias, outright discrimination, and/or the discounting of minority-dominated fields, plays a role and, thus, must be addressed if our nation is to achieve its full potential.

The case began in 1998 when Lilly Ledbetter filed a discrimination claim with the EEOC alleging that her employer, Goodyear, had unlawfully discriminated against her on the basis of sex in violation of Title VII. Ms. Ledbetter, a supervisor, had been working at Goodyear since 1979.  She was one of the few female supervisors and experienced significant sexual harassment during her employment.  A company policy that prohibited employees from discussing compensation hindered Ledbetter’s ability to gain proof of Goodyear’s discrimination against her. I n 1997, she received an anonymous note that disclosed the salaries of three male managers.

Ms. Ledbetter discovered that she was being paid 20 to 40 percent less than her male counterparts.  Ms. Ledbetter sued in the District Court for the Northern District of Alabama, where the jury found in her favor and awarded her back pay and damages.  Goodyear appealed on statute of limitations grounds to the U.S. Court of Appeals for the Eleventh Circuit, where the lower court’s decision was reversed.  The case then went to the Supreme Court.

Early in the 111th Congress, Democrats passed a law to ensure fair pay for all Americans.  While the battle for equality and civil rights is far from over, in January 2009, all those who believe in the promise of “equality and justice for all” achieved a major victory when President Obama signed the Lilly Ledbetter Fair Pay Act of 2009 into law (P.L. 111-2).  In doing so, Congress and President Obama ended a nearly two-year battle to overturn a Supreme Court decision that made it more difficult for victims of pay discrimination to seek redress and receive justice. 

In Ledbetter v. Goodyear Tire & Rubber Co., Inc., the Court ruled that the 180-day statute of limitations on filing a discrimination claim with the Equal Employment Opportunity Commission (EEOC) under Title VII of the Civil Rights Act of 1964 begins to run when the original discriminatory decision is made and conveyed to the employee, regardless of whether the pay discrimination continues beyond the 180-day period.  This ruling reversed a long-standing interpretation, used by nine federal circuits and the EEOC in both Democratic and Republican Administrations, under which the statute of limitations began to run each time an employee received a pay check or other form of compensation reflecting the discrimination.  The Court’s minority issued a strongly-worded dissent by Associate Justice Ruth Bader Ginsberg, asserting that attaching the statute of limitations to the payment of a discriminatory wage would better reflect workplace and pay discrimination realties, precedent, and the overall purpose of Title VII.  And in a rare act, she encouraged Congress to overturn the Court’s decision.

The Lilly Ledbetter Fair Pay Act restored the "pay-check accrual" interpretation to ensure that employees who can prove pay discrimination based on race, color, religion, sex, national origin, age or disability will not be forever barred from seeking redress because they did not learn they were victims of pay discrimination within six months after the discriminatory decision was first made. 

A previous attempt to pass this legislation in the 110th Congress was obstructed by Senate Republicans, but in the 111th Congress, with a larger majority, Senate Democrats were able to pass the bill on a vote of 61 to 30.  The House of Representatives passed the bill on a vote of 250 to 177 and the measure became law on January 29.

On Equal Pay Day 2009, Senate Democrats introduced legislation to further expand protections against wage discrimination.  Sponsored by Senator Harkin, the Fair Pay Act would amend the Fair Labor Standards Act of 1938 to protect racial and ethnic minorities, in addition to women, from wage discrimination by ensuring they receive equal pay for equivalent jobs – jobs that are comparable in skill, effort, responsibility and working conditions.  While protections for these classes would still exist under Title VII of the Civil Rights Act of 1964, the legislation would address pay disparities between traditionally female-dominated and minority-dominated fields that are different in name only, e.g. parking meter reader vs. electrical meter reader and social worker vs. probation officer.  The bill would also shine a light on wage disparity by requiring employers to disclose pay scales and rates for all job categories at a given company so that discrimination is not hidden from employees, like Lilly Ledbetter.  To ensure the legislation does not hurt businesses and other workers, the Fair Pay Act includes a small business exemption and makes exceptions for different wage rates based on seniority, merit, or quantity or quality of work.

For information on this topic, see the Joint Economic Committee hearing entitled, “Equal Pay for Equal Work. New Evidence on the Persistence of the Gender Gap” (April 28, 2009) and the Senate Health, Education, Labor, and Pensions Committee hearings entitled “Closing the Gap: Equal Pay for Women Workers” (April 12, 2007). 


ENDNOTES

[1] Testimony of Lisa Maatz, Director of Public Policy and Government Relations, American Association of University Women (AAUW) before the Joint Economic Committee (April 28, 2009), available here (referencing the AAUW’s report “Behind the Pay Gap” (April 2007), available here.

[2] Id.

[3] Government Accountability Office, “Work Patterns Partially Explain the Difference Between Men’s and Women’s Earnings,” (October 2003), available here.

[4] Id;Supra at FN 1; Testimony of Jocelyn Samuels, National Women’s Law Center, before the Senate Health, Education, Labor, and Pensions Committee (April 12, 2007), available here.

[5] Institute for Women’s Policy Research, “The Gender Wage Gap by Occupation” (2008) available here.

[6] AFL-CIO, “Professional Women: Vital Statistics” (2008), available here.

[7] Institute for Women’s Policy Research, “Improving Pay Equity Would Mean Great Gains for Women,” (2008) available here.

[8] Testimony of Randy Albelda, Professor of Economics, University of Massachusetts-Boston, Joint Economic Committee (April 28, 2008), available here (Citing the U.S. Census Bureau).

[9] Testimony of Randy Albelda, Professor of Economics, University of Massachusetts-Boston, Joint Economic Committee (April 28, 2008), available here (Citing the Center for American Progress’s report entitled “Equal Pay for Breadwinners” (January 2009), available here).

[10] Analysis of U.S. Census Bureau, 2007 American Community Survey, available S.2002&-ds_name=ACS_2007_1YR_G00_&-CONTEXT=st&-tree_id=307&-redoLog=true&-geo_id=01000US&-format=&-_lang=en" target="_blank">here

 (NOTE: This document uses the White, not Hispanic, numbers as a baseline).

S.2002&-ds_name=ACS_2007_1YR_G00_&-CONTEXT=st&-tree_id=307&-redoLog=true&-geo_id=01000US&-format=&-_lang=en" target="_blank">[11] Id.  

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