With a moderate amount of fanfare, the Clinton White House this week released its proposed budget for fiscal year 2001. Replete with spending proposals, this lame-duck laundry list of initiatives, as several critics have pointed out, threatens to drain the federal government surplus. But it also embraces the feel-good sentiment of “helping America’s working families” — a favorite theme of this administration and an obvious nod to Vice President Gore’s platform in this election season. The Clinton budget “proposes to create new initiatives and expand upon existing programs to help give working families the opportunities they need to partake of our country’s prosperity,” the White House stated. But while these ideas are long on poll-tested rhetoric, they are very short on facts. Policy proposals such as the President’s $27 million Equal Pay Initiative warrant closer scrutiny.
The President’s much-ballyhooed “Equal Pay Initiative,” which he announced in late January in a well-staged photo-op with Michelle Akers of the U.S. women’s soccer team, takes as its starting point a deliberately misleading premise: Women earn only 76 cents for every dollar earned by a man. In fact, equal pay for equal work has been the law of the land since the passage of the Equal Pay Act in 1963. The 24-cent wage gap cited by Clinton and others is the average wage gap between men and women; it fails to take into account such crucial variables as age, education, experience, and consecutive years in the workforce, all of which are important determinants of income. When those factors are taken into account, the wage gap all but disappears. Data from the National Longitudinal Survey of Youth reveal that among people ages 27 to 33 that have never had a child, women’s earnings approach 98 percent of men’s earnings. A survey by Business Week in 1998 showed that men and women earn the same starting salaries in fields such as finance, marketing, and consulting, for example.
The average wage gap is not the result of discrimination, but of the choices women make with regard to education and work and family. Women, 80 percent of whom bear children at some point in their lives, often choose career tracks that allow them greater flexibility, or educational fields that result in lower earnings after graduation. Of course, for decades the law has protected women’s right to pursue any educational field or career that they choose. Female CEOs, doctors, lawyers, and engineers are commonplace today.
But this does not satisfy some groups. The Clinton administration and like-minded others want to expand government regulation of the economy in order to fulfill their particular vision of equality, one based on equality of outcomes between men and women rather than equality of opportunity. Thus Clinton calls for $7 million of his initiative to go to the Department of Labor (whose recent gaffe regarding OSHA inspection of home offices suggests a tendency to overregulate) to “train women in nontraditional jobs” and urges passage of Senator Tom Daschle’s Paycheck Fairness Act.
Supporters of this piece of legislation claim that it will allow for stricter enforcement of the Equal Pay Act, which in turn will eliminate the average wage gap between men and women. But equal pay for equal work has been the law of the land for decades. The only way to get rid of the average wage gap is to require equal pay for different jobs through a wage-setting practice known as “comparable worth.” This is what the Paycheck Fairness Act proposes to do. The majority of economists know that comparable worth is a bad idea; by artificially inflating women’s wages it makes them less desirable hires to employers, and by centralizing wage-setting it stifles the economy’s ability to react flexibly to changes in supply and demand in the labor market. Although it has been reincarnated as “pay equity,” don’t be fooled: the principle behind the Paycheck Fairness Act is the old, discredited idea of comparable worth.
Given the overwhelming evidence of women’s success in the working world, and the existence of anti-discrimination legislation such as the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964, what problem, exactly, is the Clinton Administration trying to fix with its Equal Pay Initiative? The problem they claim to be tackling is one based on ideological myopia, not facts. Clinton and other supporters of “pay equity” think something is terribly wrong if American women – exercising their ability to choose educational fields and occupations -nevertheless fail to reach absolute statistical parity with men in some arenas. If half of all women are not CEOs and construction workers, the reasoning goes, then discrimination must be to blame.
But just because women haven’t made the choices that feminists or the Clinton Administration want them to make doesn’t mean that their choices are evidence of discrimination. One of the hallmarks of a free society is allowing citizens to pursue their dreams, or to engage in the “pursuit of happiness” as our nation’s founders put it. For women, that pursuit was not guaranteed by law until fairly recently in American history; nevertheless, in a short span of time women have made incredible gains.
The federal government should continue to protect women’s right to equality of opportunity. What it should not do is claim for itself, through coercive and uninformed social policy, the right to define what women should choose. The Clinton Administration has always been adept at speaking the language of good intentions. More often than not, however, those good intentions have not translated into good policy. The President’s new Equal Pay Initiative for women is no exception.