Yesterday, the day branded as "Equal Pay Day," Dedra Farmer told the House Committee on Education and Labor her history with America's most notoriously unfair employer, Wal-Mart. She was hired as a Tire Lube Express (TLE) manager, a coveted salaried position among Wal-Mart employees, with an annual salary of $28,000. Her work was routinely praised and rewarded, and she was even asked to train the new TLE managers, "all of who were men." Those trainees informed her that they had a base salary of $30,000. Even worse, bonuses for TLE managers are based on the volume of sales in a given store, and Farmer's requests to be transferred to high-volume stores were routinely denied. Additionally, as a TLE manager, Farmer had access to hourly employee wage information. She noticed that she wasn't alone: The men were earning more in hourly jobs than the women.
So she emailed Wal-Mart's CEO Lee Scott to ask for a spreadsheet analysis comparing the wages of women to those of men in the same jobs. When she got no response, she emailed him again. Finally, she raised her concern with her store manager. This time she got a response -- a pink slip notifying her she would be out of a job in three months. When Farmer inquired about the reason for the termination, she was told she "took too many breaks." And after Farmer provided proof that her breaks fell within company-specified time limits, her supervisor changed the reason for her discharge.
Farmer is one of the 1.6 million women in a class-action lawsuit, Dukes v. Wal-Mart, and according to a recent study released by the American Association of University Women, she and her Wal-Mart coworkers aren't the only women who are paid less than men to do the same work. The study showed that college-educated women one year after graduation start with an earnings gap of 20 percent. When AAUW followed up with women who had been in the workforce for 10 years, the gap widened to 31 percent. The AAUW study, Behind the Pay Gap, did a regression analysis and controlled for "choice" factors, which include "educational and occupational choices, as well as demographic and personal characteristics." Once this analysis was done, recent female graduates still had a 5 percent pay gap -- and women a decade out of college earned 12 percent less than men.
To some degree, the study recognizes that "taking time off" for mothering has an adverse impact on the amount of pay a woman receives. It also recognizes other "choices" that can affect earnings: Women are more likely to choose lower-earning careers like the non-profit sector and local government. Other analysts have noticed, meanwhile, that wages typically begin to drop once fields become mixed gender. But according to the AAUW, even in mixed-gender or male-dominated fields, the pay disparity exists in a significant way. Women who enter biological sciences, a decidedly mixed-gender field, make 75 percent of what their male colleagues earn. Female mathematicians, who are the minority in their field, make 76 percent as much as male mathematicians. The bottom line is that the pay gap is real, even if women make the same life choices as men.
Representative Rosa DeLauro prompted the committee's discussion of pay equity with her introduction of the Paycheck Fairness Act (PFA), legislation that would allow employees to share pay information without suffering adverse consequences, something that Farmer testified is considered "gross misconduct" at Wal-Mart. Additionally, it would compel employers to make all salaries public so women can identify when they are getting paid less for equal work. The opposition, which ranges from Republicans on the committee to conservative economic think tanks like the Hudson Institute, cites this as a violation of privacy. Currently, the only employees who usually have access to salary information are supervisors, an overwhelmingly male cohort.
The ranking Republican on the committee, Howard P. "Buck" McKeon, constantly interrupted AAUW research director Catherine Hill's attempts to answer his questions, and relied on testimony from Diana Furchtgott-Roth, a senior fellow at Hudson and former chief economist at the Department of Labor from 2003 to 2005. Furchtgott-Roth suggested that the AAUW study's methodology was flawed, in that it didn't account for "accumulated lifetime hours of work" -- basically that women who take time off for children suffer from pay discrimination. One of the PFA's cosponsors, Representative Robert Andrews of New Jersey, pointed out that this factor seems insignificant to the analysis of women one year out of college, who would have the same accumulated lifetime work as men at that point.
The Hudson Institute did their own regression analysis, Furchtgott-Roth said, and found that the difference in pay was "statistically insignificant." Furchtgott-Roth also asserted that the categories of jobs designated by the AAUW study were "too broad" to know if such a pay disparity existed and suggested that the data be broken down by job title or a more specific job category. But an analysis by job title could be equally problematic, because job titles are often assigned by supervisors, who are overwhelmingly male. A woman and a man may have parallel job responsibilities, but have significantly different titles due to bias. A good example of this is a 1997 National Bureau of Economic Research study by Claudia Goldin and Cecilia Rouse that women began getting placed at a much higher rate in professional orchestras once "blind auditions" were instituted.
Furchtgott-Roth and the opposing members simultaneously denied that the pay gap existed and insisted that passing the proposed legislation would increase the "cost of hiring" so much that it would cause unemployment or encourage employers to just hire men so that they wouldn't fear a lawsuit -- a seeming contradiction.
Still, there are legitimate criticisms to be made of PFA. As currently written, the bill allows for a major litigation loophole. Employers need only prove that the pay difference is not solely the result of gender by pointing to some other factor ("too many breaks," in Farmer's case). And it should go without saying that the problem of unequal pay persists because of a number of factors beyond direct discrimination, including gendered "choices" and career expectations. (Economist Heather Boushey, an expert on family leave, testified about the disproportionate amount of family responsibilities that fall on women, saying that women should "encourage men to take some of that responsibility." Additionally, Boushey said, greater work-hour flexibility would decrease the cost of turnover.)
It should also go without saying that, as pointed out at the hearing by Representative Yvette Clarke of New York, women of color face particular challenges. Black women earn 67 percent of what white men earn, while Hispanic women trail at 58 percent. The amount a black woman makes with a bachelor's degree is nearly equivalent to what a white man earns with a high school education. (When posing this question to Furchtgott-Roth, who stuttered something about charter schools, Clarke looked at her and said, "I understand where you're coming from, now I'd like you to look at where I'm coming from.")
But the Paycheck Fairness Act would mark a great step toward increasing transparency and allowing women to fight for pay equality, and what's perhaps most significant is that the issue is at last actually on the table. DeLauro has introduced the legislation 10 times, and this was the first time it had even been discussed in a committee hearing.
As Dedra Farmer testified yesterday, she was lucky. Because she was a manager, she had access to salary information and was able to find out she wasn't getting paid as much as her male trainees. But, she said, "most women wouldn't know these pay differences exist and, therefore, would lack the evidence with which to challenge discriminatory pay practices, much less the enormous resources and courage needed to file a lawsuit against their employer."
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