Paycheck Fairness: We’re not there, yet.

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On April 17, President Barack Obama made an official proclamation declaring the date “Equal Pay Day”.  Not a holiday in the traditional sense (even Labor Day is celebrated with a day off from work), this day has been annually observed since 1996, the year it was first sponsored by the National Committee on Pay Equity.  The choice of date represents how far into 2012 the average American woman has to work in order to earn as much in salary as the average American man did in 2011 alone.

We hear it all the time: the average American woman earns 77 cents for every dollar earned by the average American man.  I have a friend who loves to use this statistic as a rationale for allowing men to buy her drinks.  She calls that additional 23 cents that men make over women their contribution to the “National Drink Kitty”.  But, humor and martinis aside, let’s be clear: this country needs to pay attention to pay equity.

The Lilly Ledbetter Act of 2009 was an important step in the direction of equal compensation for equal labor.  Now, we need to pass the Paycheck Fairness Act to continue combatting pay inequity.  However, a proclamation of support for this controversial bill, called commonsensical by President Obama during its last attempt through Congress and anything but in a variety of other venues, requires a critical examination of its statutes, and assessment of its necessity.  After all, even the Lilly Ledbetter Act has proven to be a political minefield of late.

The Paycheck Fairness Act is designed to improve on Fair Labor Standards Act of 1938 through revision of language and provision of additional measures.  In Section 3(a)(2), the phrase “bona fide” adapts old text to tighten existing requirements.  The definition of the phrase is clarified in Section 3 (B):

The bona fide factor defense described in subparagraph (A)(iv) shall apply only if the employer demonstrates that such factor (i) is not based upon or derived from a sex-based differential in compensation; (ii) is job-related with respect to the position in question; and (iii) is consistent with business necessity. Such defense shall not apply where the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice.

The emphasis in the phrase is mine, used to highlight a notable feature of this bill that gives it cross-gender relevance: the Paycheck Fairness act increases employer-employee transparency, by protecting employees when they raise complaint, or merely inquire, about workplace practices.  As Gary Latanich, candidate for House of Representatives from the Arkansas 1^st Congressional District recently discussed, employers are currently protected from prosecution when they take punitive wage-reducing measures against employees for having conversations about wage rates.  While a prohibition against such frank conversations is, itself, an unfair business practice, it is especially so when these employees have not been told that such conversations are against company policy.  By calling for, and enforcing, increased transparency in the workplace, the Paycheck Fairness Act will improve the flow of information, benefiting all employees, not just female ones.

Furthermore, and much more controversially, the Paycheck Fairness act makes it easier for groups of women who have faced pay discrimination to bring class action lawsuits to court.  This, as illustrated by a Bloomberg article covering the bill’s first round through Congress, is considered the bull’s-eye on the legislation.  When railing against a bill whose title makes it hard to dismiss, opponents have to find their own punchy refrain.  Many think they’ve found an effective one when they call the bill a jobs killer.

However, this epithet is overplayed, and detrimental to opponents’ argument for two reasons.  First, it acknowledges the premise of the bill, suggesting that its enactment will induce employers to send jobs overseas rather than pay their female employees fairly.  In this acknowledgement, the deal is sealed: if women are not being paid fairly, then the existing Equal Pay Act of 1963is not doing its job and we need the Paycheck Fairness Act.

Furthermore, certain civil rights acts already guarantee plaintiffs the right to seek compensatory and punitive damages, the very statute of the Paycheck Fairness Act under attack.  As this insightful article from Remapping Debate points out, provisions from the Paycheck Fairness Act “put women on equal footing with victims of race-based pay discrimination, who can seek uncapped damages under a post-Civil War law that has been applied to workplace claims for several decades.”  In other words, to oppose this bill on the grounds that such lawsuits are frivolous or detrimental to the economy is to invite debate over why some forms of discrimination are more permissible, and less punishable, than others.  If that’s what we’re arguing about, opponents have already lost.

The provisions of the Paycheck Fairness act are, themselves, fair.  But, more than that, they are necessary.  While that claim about 77 cents on the dollar is simplistic, accounting for women who choose to work less, or in less highly remunerated positions than men, a gendered wage gap still exists.  The sobering reality is this: holding constant factors like hours worked, occupation, flexibility, number of children, marital status and educational attainment (among others), the average American woman still only earns approximately 95 cents to every dollar earned by the average American man.  Yes, acknowledging this gap this would put that holiday, Equal Pay Day, in January.  But we really shouldn’t be celebrating it at all.

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