The President and Democratic Senators are championing The Paycheck Fairness Act, legislation that would amend the Fair Labor Standard Act of 1938, supposedly to address and discourage workplace discrimination against women.
They claim that women are regularly subject to discrimination based on sex, as proven by the “wage gap” between men and women’s earnings. Yet statistics showing a “wage gap” tell us nothing about the role discrimination plays in American workplaces since other factors that affect earnings (such as industry, hours worked, and background) are not taken into account. (see Policy Focus: The Equal Pay Myth for more.)
Discrimination against women is already illegal. The Paycheck Fairness Act's chief beneficiaries would not be women, but lawyers since the legislation’s primary effect would be to increase the number of costly lawsuits.
The Paycheck Fairness Act would require employees to opt-out of (rather than into) class action suits filed against their employers. It would increase the potential payouts for plaintiffs and their lawyers by allowing punitive damage against charges of discrimination.
As a result, employers would have an incentive to adopt more rigid compensation practices, as well as employ fewer workers, since each worker (particularly a female worker) would represent another potential lawsuit. Ultimately, the Paycheck Fairness Act would fail to create greater justice, and lead to a less flexible workplace and fewer opportunities for both men and women.