Discrimination has been on the…
Discrimination has been on the battlefield for centuries whether it pertains to race, gender, color, sex, religion, beliefs, or pay. At the forefront of this generation and many before us is workplace discrimination as it relates to pay. This form of discrimination reflects the common myths and biases that men are the “breadwinners” or providers for their family, and women are responsible for taking care of the home and children. In 2014, women who worked all year earned 79 cents for every dollar her male counterpart earned (Council of Economic Advisers, 2016). Women, who are equally trained, educated, and share the same experience as men, are not getting equal pay. Women have proven that they can produce the same results, have the same education, and have the same capacity to accomplish the same tasks as men if not more. If equal pay for equal work is to be beneficial to all, legislation must specifically highlight and make provisions that directly affect women of minority groups as well as women in general.
The Lilly Ledbetter Fair Pay Act of 2009
It was the first bill signed into law by President Barack Obama in 2009 for equal pay for equal work. It restored the protection against pay discrimination that was stripped away by the Supreme Court’s decision in Ledbetter v. Goodyear Tire ; Rubber Company. The Act extended the time period in which claimants can bring pay discrimination claims, enabling victims of pay discrimination to seek redress when they otherwise could not. For years, Lilly Ledbetter was paid at least 15 percent less than the lowest-paid man in her equivalent position. The Act reinstates prior law and makes clear that pay discrimination claims on the basis of sex, race, national origin, age, religion and disability “accrue” whenever an employee receives a discriminatory paycheck, as well as when a discriminatory pay decision or practice is adopted, when a person becomes subject to the decision or practice, or when a person is otherwise affected by the decision or practice. The law is retroactive to May 28, 2007, the day before the Court issued its ruling in Ledbetter (National Women’s Law Center, 2013). It changed the legal process around claims of gender discrimination, one of many factors contributing to the pay gap (Council of Economic Advisers, 2016). The passage of the Lilly Ledbetter Fair Pay Act also promoted voluntary compliance by employers, allowed employees to assess the validity of their claims, and responded to workplace realities (National Women’s Law Center, 2013).
The wage gap by gender
The gender wage gap has many causes and contributors, including differences in education, experience, occupation and industry, and family responsibilities Women account for 47% of the labor force, up from 29 percent in 1948. The typical woman working full-time full-year earns 21% less than the typical man. The pay gap closed by 17 percentage points between 1981 and 2001, it had remained flat since 2001. The gap closed by 1.8 percentage point from 2012 to 2013 and by an additional percentage point between 2013 and 2014. The gender pay gap in the United States has not changed substantially over the last 15 years, other industrialized nations have made greater progress in closing the gap. The gender wage gap in the United States is about 2.5 percentage points larger than the Organization for Economic Co-operation and Development (OECD) average (Council of Economic Advisers, 2016). Studies conducted across all sectors (public and private) also report that the gender gap in human capital explains majority of the pay gap and that women are oftentimes punished for time away from work (Alkadry and Bishu, 2016).
The latest release from the World Economic Forum—the Gender Gap Report 2016 indicates that in the past 10 years, the global gender gap across education and economic opportunity and politics has closed by 4 percent, while the economic gap has closed by 3 percent (Verniers and Vala, 2018). The report goes on to say that it will take the world another 118 years or until 2133 to close the economic gap entirely.
Women are more likely to work part-time or be employed in low-paid jobs and not take on management positions. The motherhood myths have the potential to create psychological barriers impairing women’s attempt to seek power in the workplace and men’s involvement in child care (Verniers and Vala, 2018). Motherhood myths might operate more broadly as justifications for gender discrimination regarding career opportunity. The basic principle of anti-discrimination has been enacted by many countries in the second half of the 20th century, some measures are still adopted nowadays, such as the obligation for employers to publish information by 2018 about their bonuses for men and women as part of their gender pay gap reporting, a provision recently taken by the UK government (Verniers and Vala, 2018).
Several factors have contributed to the gap between men’s and women’s wages. The Equal Pay Act (part of the Fair Labor Standards Act), forbids employers to compensate women differently for jobs that are “substantially equal”, that is, almost identical. All forms of pay are covered by this law, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits. If there is an inequality in wages between men and women, employers may not reduce the wages of either sex to equalize their pay (U.S. Equal Employment Opportunity Commission). Traditionally, women have worked in different occupations than men; these occupations tend to be substantially different, pay less, and confer less authority.
The wage gap by race
The typical non-Hispanic white woman earned 75 percent of what the typical non-Hispanic white man earned. Women of color face a wider pay gap in comparison to white men. Non-Hispanic black woman made only 60 percent of a typical non-Hispanic white man’s earnings, while the typical Hispanic woman earned only 55 percent. The typical black non-Hispanic woman earns 82 percent of what the typical black non-Hispanic man does, and the comparable number for Hispanic women is 88 percent. While the gender pay gap in the United States has not changed substantially over the last 15 years, other industrialized nations have made greater progress in closing the gap (Council of Economic Advisers, 2016).
According to a report released by the Economic Policy Institute (EPI), black men and women earn significantly less than white counterparts largely due to job market discrimination, and this racial wage gap has significantly widened over the last 36 years (Marans, 2018). In 1979, when landmark civil rights laws were newer, blacks earned 16.9 percent less. Black women earned 11.7 percent less than white peers in 2015, and 4.5 percent less in 1979, according to EPI. In 2015, black men earned 22 percent less than white men who worked full-time and lived in the same regions with comparable educations and work experience as reported by Valerie Wilson, director of Program on Race, Ethnicity and the Economy, and William Rodgers, public policy professor at Rutgers University. Black women earned 34.2 percent less than white men living in the same regions with comparable education and experience. Younger black women (ages 18 to 35) with 10 years’ experience or less in the workplace lost the most ground compared to their white counterparts. These young black women went from earning 4.1 percent less than white women with similar experience in 2000 to 10.8 percent less in 2015 ? more than doubling the racial wage gap for this group (Marans, 2018).
In the 1980s, there was a massive decline in the number of higher-paying unionized jobs, which hit African-Americans disproportionately hard, especially in the Midwest, according to EPI. These jobs were replaced by lower-paying positions. The late 1990s saw a decline in the racial wage gap because booming economic growth forced employers to compete for workers, resulting in the largest and broadest wage gains in the past four decades. Many states also began raising their minimum wages above the federal level, which helped ease the racial disparity. From 1996 to 2000, the racial wage gap declined significantly for both black men and women because of major economic and policy developments that weakened the earnings and workplace power of black workers. These jobs were replaced by lower-paying positions (Marans, 2018).
Since the beginning of 2000, the narrowing of the wage gap was undone, and the gap continued to grow. The lack of progress can be attributed to a recession in 2001 that was followed by a “jobless recovery”. A few years later, there was the much larger recession of 2007, which affected African-Americans. The typical household’s income went up more than 5 percent from 2014 to 2015 ? the largest single-year increase the census has ever recorded. The median income of black households rose a more modest 4.1 percent. Racial disparity went down by just under a percentage point for black men from 2014 to 2015. It went up for black women (Marans, 2018).
Education, experience, and family responsibilities
One-third of the decline in the pay gap during the 1980s was due to women’s relative gains in experience (whereas the major factor in the pay gap decline in the 1990s was increases in women’s educational attainment) according to economists, Francine Blau and Lawrence Kahn.
In the 1960s and 1970s, men were more likely than women to graduate from college. On-the-job experience is another important determinant of wages, and in the past, women often left the labor force after marrying or having children. Today, most mothers with an infant are in the labor force (Council of Economic Advisers, 2016).
In 1980, the typical 18-34 year old woman who worked earned about 74 cents an hour for every dollar the typical man earned, but by 2014, this figure had increased to 91 cents. The gender wage gap has narrowed faster among younger women because the age of first birth has risen (24.9 to 26.3 from 2000 to 2014). Delaying childbirth for one year can increase a woman’s total career earnings and experience by 9 percent. If the United States had family-friendly labor market policies comparable to those in other OECD countries, the female labor force participation rate would be 4 percentage points higher (Council of Economic Advisers, 2016). Women, even highly-educated women, are less likely to negotiate their first job offer than men. Women were more often penalized for initiating negotiations, which the authors attribute to “perceptions of niceness and demandingness” (Bowles, Babcock, Lai 2016). Eliminating pay secrecy can play an important role in helping women negotiate.
Drivers of the pay gap
Workplace authority is one of the most recurring driver of the gender pay gap in organizations. Access to workplace authority is also an important aspect of an individual’s development in the workforce. Disparity in access to workplace authority is a condition where individuals who are equally qualified are denied access to authority opportunities based on non-work-related attributes including race, gender, and/or other factors (Alkadry and Bishu, 2016). Gender-based workplace authority disparity can infer two important disparities in the workforce. First, it infers that women are systematically denied access to positions with authority in the workforce. Second, even when women are granted positions of authority, compared with their male counterparts, the level of authority they exercise may differ, hence also implying that the economic return from their job can be lower than their male counterparts (Alkadry and Bishu, 2016).
Access to hiring and promotion
According to studies conducted by Powell and Butterfield, subjective appraisals that determine hiring and promotion decisions create a condition where women and minorities are being systematically denied of career opportunities that could potentially result in better economic and other benefits. The glass ceiling phenomenon is one of the ways that discrimination in access to promotion is manifested in the workforce. The U.S. Department of Labor defines the glass ceiling as “those artificial barriers based on attitudinal or organizational bias that prevent qualified individuals from advancing upward in their organizations” (Alkadry and Bishu, 2016). Other concepts to explore as it relates to access to hiring and promotion to explore are leaky pipeline and sticky floors. The “leaky pipelines” concept argues that women and minorities face disadvantages at different stages of their career trajectory and “leak out” before reaching management positions. This concept of workplace inequality prompts researchers to investigate where “leaks” happen and what factors produce these leaks (Zeng, 2011). The “sticky floor” concept explains the concentration of women and minorities in lower echelon position in organizations. Sticky floor explains systematic ways in which women are denied of opportunities to advance from lower echelon position in their organizations and a large pay gap exists between each echelon of the wage distributions (Zeng, 2011).