January 7 2009
Gender warriors are not wasting any time in 2009. Two pieces of falsely titled "gender equity" legislation, the Lilly Ledbetter Fair Pay Act and the Paycheck Fairness Act, are set to be the first votes of the new House. Both bills are touted as protecting "equal pay" but, in reality, do nothing of the sort. The Equal Pay Act of 1963 already requires equal pay for equal work. So, whenever modern day politicians use the term, something else is usually afoot. The recent push for pay equity is no different.
Both pieces of legislation have popped up before. The Paycheck Fairness Act passed the House in the last Congress, but was never sent to the Senate floor. The premise of the legislation is that American workplaces are systematically hostile to women and that the government must therefore intervene to provide more protection for women.
The Paycheck Fairness Act would take significant steps toward the idea of "comparable worth," aka government intervention (rather than market mechanisms such as supply and demand) in determining salary levels for different jobs to ensure "fairness." Under the bill, the Department of Labor would issue guidelines that compare the wages of different jobs to give employers an idea of what is considered a fair wage. It would also subject employers to unlimited compensatory and punitive damages, even for unintentional pay disparities. As if that doesn't leave employers vulnerable enough, the bill would also prevent employers from defending differences in pay as based on factors other than sex (for example, productivity, years in the workforce, education level, etc.). In other words, the bill is a trial lawyer's dream come true. The potential for costly litigation is endless, which is likely to raise the cost of employment and discourage workplace flexibility, both of which are bad news for women.
Another bill inviting lawsuit abuse is the Lilly Ledbetter Fair Pay Act, which passed the House in the last Congress, but was blocked by a Republican filibuster in the Senate. The bill's namesake, Lilly Ledbetter, gained notoriety when she lost her equal pay case against Goodyear Tire and Rubber Co. before the Supreme Court. Ledbetter lost her case due to statutory timing limits, and the bill seeks to extend those statutory limits for future pay equity cases (giving employees more time to file a suit for wage discrimination).
Maybe the current standard doesn't give people enough time to file suit - that is an issue on which there could be a healthy debate. But surely there should be a reasonable limit to dredging up old grievances. The Fair Pay Act would so dramatically expand the statute of limitations that companies could face suits over pay decisions made forty years ago, with relevant employees long since moved on. A company shouldn't have to face lawsuits about those decisions - there is simply too much room for abuse.
Politicians invariably point to the existence of the "wage gap" in pushing for these, and other gender equity bills. Women earn just 77 cents for every dollar a man earns, they say. In their view, this proves discrimination and justifies government intervention. However, a closer look at the wage gap reveals a much different picture.
That much-cited statistic simply compares the wages of the median full-time working man and the median full-time working woman. It tells us nothing about the existence or non-existence of wage discrimination. The wage gap ignores a myriad of other relevant factors including education level, years in the workforce, and type of occupation. Once these other factors are taken into account, the wage gap shrinks. So should we really be basing policy decisions on a simple statistic that doesn't take into account relevant information? To do so hardly seems prudent.
Both the Paycheck Fairness Act and the Lilly Ledbetter Fair Pay Act are touted as key to advancing women's rights, but in reality do little to help women. Instead they would raise the cost of employment and discourage workplace flexibility - precisely what women don't want. Let's hope our representatives will look beyond the political rhetoric of gender equity and reject these egregious proposals.