Democrats bank on women voters falling in line behind them because of the GOP’s supposed “War on Women.” And they routinely trot out their favorite statistic on the wage gap, which they claim shows there’s rampant discrimination against women in the workplace. Yet after seven years of Obama, women ought to ask: Why has nothing changed?
The administration wants people to believe that it’s just that their work is unfinished: They need more laws and greater government redistribution to turn around the economy and root out discrimination. Using this argument, they proposed another new regulation last week that would require businesses with 100 or more employees to provide additional information to the federal government about their employees’ demographics and pay. As the Equal Employment Opportunity Commission chairwoman Jenny Yang put it in her discussion of the proposed regulation: “Too often, pay discrimination goes undetected because of a lack of accurate information about what people are paid. . . . We will be using the information that we’re collecting as one piece of information that can inform our investigations.”
Women have heard this before. The administration had claimed that the Lilly Ledbetter Fair Pay Act, the first legislation this president signed into law, would crack down on discrimination and help eliminate the wage gap. The president signed two executive orders in 2014 that were also meant to narrow the wage gap by, as the Washington Post explained, “forcing federal contractors to let their workers discuss their earnings with one another and to disclose more information about what their employees earn.” And yet here we are, with the pay gap essentially unchanged and another proposed government solution.
This latest regulatory effort could be worse than just ineffective. The administration argues that it will encourage companies to police their own employment practices and eliminate sexist pay differentials. But it will also “encourage” companies to work to eliminate any differences in pay, even if they exist for legitimate reasons.
For example, Evolving Strategies conducted a study on behalf of the Independent Women’s Forum to see how women value different job attributes. They found that a combination of flexible schedules, telecommuting, and reduced hours was as valuable to women as an extra salary of $5,000 to $10,000. That means that women might intentionally negotiate lower pay in exchange for such flexibility. These women feel this tradeoff is a win for them — but to the EEOC bureaucrat examining the company’s data sheet, it could look an awful lot like discrimination.
Prudent employers will respond accordingly — and undoubtedly with the guidance of a cadre of well-paid lawyers, the group that always benefits from such new regulations. Businesses will move toward a more rigid, one-size-fits-all compensation system. Instead of being able to negotiate a reduced work schedule or more flexibility in exchange for lower pay, women can expect more take-it-or-leave-it, full-time options. That will make it harder for working moms who want to balance their work and family life, and it will make it easier for employers to avoid an EEOC investigation.
Here’s the real reason this new regulation won’t shrink the wage gap, and why all the other policy fixes advanced were also doomed to failure: Discrimination isn’t the main reason that men and women have different earnings. The wage gap exists because people make different choices when it comes to work life. Simply comparing the earnings of the average female worker with those of the average male worker — which is how the Bureau of Labor Statistics generates this infamous wage-gap stat — overlooks the many factors we know affect earnings, from the number of hours worked each week, to years of experience, to chosen industry and specialty. Controlling for those factors eradicates most of the wage gap, leaving just a few percentage points separating men and women’s earnings.
If the real goal is for women to earn more, then more regulations or a stricter legal code aren’t what’s needed. We can’t blame sexist workplaces for women’s ongoing financial struggles. The real culprit is our floundering economy. Take-home pay has barely budged in seven years, in part because employers have to spend more complying with government dictates and meeting requirements for expanded employee benefits. Less costly government red tape and a growing economy will lead to more job creation and more competition among employers for valuable workers, helping everyone earn more.
Of course, such a rising tide would benefit both women and men, so it wouldn’t eliminate the wage gap, either. But it would rekindle the American Dream and make it easier for families to make ends meet. Surely voters care more about this than changing a bogus labor statistic.
— Carrie Lukas is the managing director of the Independent Women’s Forum and vice president for policy of the Independent Women’s Voice.