Pay equity means of eliminating sex and race discrimination in the wage-setting system. The wage gap is currently at 73 cents to the dollar. That means the wage gap has narrowed by less than a half penny per year. There are currently two laws that protect against wage discrimination, The Equal Pay Act of 1963, which prohibits unequal pay or “substantially equal” work performed by men and women. Title VII of the Civil Rights Act of 1964 prohibits wage discrimination on the basis of race, color, sex, religion or national origin. Pay equity is a benefit for everyone. Women and people of color should not be in fear of asking how much someone else is making or to question, why they aren’t making a certain amount, when their co-worker is making it.
In order to eliminate the pay gap, we need to do the follow, keep affirmative action programs in place, employers need to examine and correct their pay practices, woman and people of color must stand up for equal pay, and we must push for new legislation spelling out equal pay requirements.
A strong economy can sustain fair pay for all workers. And an economy in which all people regardless of gender or race are paid fairly and well will grow even stronger.
What is pay equity? It is a means of eliminating sex and race discrimination in the wage-setting system. Most women and people of color are still segregated into a small number of jobs such as clerical, service workers, nurses and teachers. These jobs have historically been undervalued and continue to be under paid because of the gender and race of the people who hold them. Pay equity means that the criteria employers use to set wages must be sex- and race-neutral.
Two laws protect workers against wage discrimination. The Equal Pay Act of 1963 prohibits unequal pay or “substantially equal” work performed by men and women. Title VII of the Civil Rights Act of 1964 prohibits wage discrimination on the basis of race, color, sex, religion or national origin. In 1981, the Supreme Court made it clear that Title VII is broader than the Equal Pay Act, and prohibits wage discrimination even when the jobs are not identical. However, wage discrimination laws are poorly enforced and are extremely difficult to prove and win. Stronger legislation is needed to ease the burden of filing claims and clarify the right to pay equity.
The wage gap exists, in part, because women and people of color are still segregated into few low-paying occupations. More than half of all women workers hold sales, clerical and service jobs. Studies show that the more an occupation is dominated by women or people of color, the less it pays. Part of the wage gap results from differences in education, experience or time in the workforce. But a significant portion cannot be explained by any of those factors; it is attributable to discrimination. In other words, certain jobs pay less because women and people of color hold them.
1998 Median Annual Earnings of Year-Round, Full-Time Workers
Source: US Census Bureau, Current Population Reports
The wage gap has narrowed by about twelve percentage points during the last fourteen years, ranging from 61 percent in 1982 to 73 percent in 1998. Since 1973 however, approximately 60 percent of the change in the wage gap is due to the fall in men’s real earnings. About 40 percent of the change in the wage gap is due to the increase in women’s wages. The wage gap has fluctuated often ranging from a low of 57 percent in the mid 1970’s, and peaking at 74 percent in 1996. Currently the national average wage gap is 27 cents, 37 cents for African-American women, and 47 cents for Hispanic women.
Many employers have used job evaluations for nearly a century to set pay and rank for different occupations within a company or organization. Today, firms that use some form of job evaluation employ two of three workers. The federal government, the nation’s largest employer, has a 70-year-old job evaluation system that covers nearly two million employees.
Women, people of color, and white men who work in jobs that have been undervalued due to race or sex bias need pay equity. Many are the sole support for their families. In addition, it is estimated that 70 percent of women with children under 18 work. Discriminatory pay has consequences as people age and across generations. Everyone in society is harmed by wage discrimination. Therefore, everyone needs pay equity.
Workers become self-sufficient and reduce their reliance on government assistance programs through pay equity. A recent study found that nearly 40 percent of working poor women could leave welfare programs if they were to receive pay equity wage increases. Pay equity can bring great savings to tax payers at a minimal cost to business. Adjustments would cost no more than 3.7 percent of hourly wage costs.
Federal law prohibits reducing pay for any employee to remedy discrimination, so the white men’s wages would not be reduced if pay equity were implemented. Furthermore, male workers in female-dominated jobs benefit when sex discrimination is eliminated, as do white workers in minority-dominated jobs. Pay equity means equal treatment for all workers.
Supply and demand is not tamper with by pay equity, nor does pay equity mandate across the board salaries. It merely means that wages must be based on job requirements like skill, effort, responsibility and working conditions without consideration of race, sex, or ethnicity.
The Equal Pay Act, minimum wage, and child labor laws all provoked the same concerns, and all were implemented without major disruption. What disrupts the economy and penalizes families is the systematic underpayment of some people because of their sex or race. When wages for women and people of color are raised, their purchasing power will increase, strengthening the economy. One survey found that a growing number of businesses support the elimination of wage discrimination between different jobs as “good business” and pay equity is not inconsistent with remaining competitive.
Pay equity is a growing national movement. Twenty states have made some adjustments of payrolls to correct sex or race bias. Seven of these states had successfully completed full implementation of a pay equity plan. Twenty-four states have conducted studies to determine if sex was a wage determinant. Four states have examined their compensation systems to correct race bias, as well. On the federal level, the Fair Pay Act has been introduced in the U.S. House of Representatives by Congresswoman Eleanor Holmes-Norton, and in the Senate b y Senator Tom Harkin. The Fair Pay Act would expand the Equal Pay Act’s protections against wage discrimination to workers in equivalent jobs with similar skills and responsibilities, even if the jobs were not identical. In addition, the Paycheck Fairness Act has been introduced in the Senate by Senator Tom Daschle and in the House by Congresswoman Rosa Delauro. The Paycheck Fairness Act would amend the Equal Pay Act and the Civil Rights Act of 1964 to provide more effective remedies to women who are not being paid equal wages for doing equal work.
In conclusion, pay equity is a benefit to everyone. There is still work that needs to be done. Women and people of color need to understand that they aren’t being fairly paid and need to let their voices be heard. They can do this by contacting their local state representatives, the Senators, and Congress people. We must be heard and fight for what we should already have. That is pay equality.
We can and must pay women and people of color the same as men. An economy with the strength and profitability of ours can surely sustain fair pay for all workers. And an economy in which all people regardless of gender or race are paid fairly and well will grow stronger.
First, we need to keep affirmative action programs in place to make sure education, jobs and promotion opportunities are open and offered to qualified women, because even with all the progress women have made, the playing field is still not level.
Second, employers must examine and correct their pay practices. If companies do not have internal self exams then they can get it in the form of guidelines for an equal pay self-audit available from the U.S. Department of Labor.
Third, women must stand up for equal pay. That begins with deciding where to work. If an employer can’t or won’t show women and men are paid equally for the job you’re seeking and for other jobs, it makes sense to look elsewhere. Positive signs include a hiring process that seeks diversity through affirmative action written pay and benefit policies, job descriptions and evaluation procedures with employee input. Even very small companies can and should have such policies. Women who experience pay discrimination where they work need to first discuss the problem with their employer and ask for the same pay men earn. If there’s a union for employees, ask their help too. If discrimination persists, you have the right to file a complaint with the local or state fair employment agencies or with the U.S. Equal Employment Opportunity Commission. Pay discrimination based on gender or race is against the law.
A fourth way to close the pay gap is through new legislation spelling out equal pay requirements. That’s not a solution popular with employers, but it may be necessary. Unfortunately, some employers seem unwilling to correct pay discrimination. For them stiff legal penalties or EEOC action may be the only remedies.
Hope McPherson Dan Johnson
Following are wages reflecting the median earnings in 1998 for full-time, year-round workers, 25 years and older
H.S. GradB.A. DegreeMaster’sDoctorate
Black 25,20341,31042,323 —
Hispanic 25,60238,07861,928 —
H.S. GradB.A. DegreeMaster’sDoctorate
All Women $21,96335,40842,00252,167
Black 19,38135,33940,766 —
Hispanic 19,82632,28942,400 —
·Female college graduates are behind male college graduates by $14,574.
·A black college educated female earns $15,275 less annually than the college educated white male.
·A Hispanic college educated female makes $18,325 less annually than the college educated white male.
Census Bureau, March Current Population Survey, 1998.
Kiefer, Francine. “Clinton’s wage gap plan may boost Gore.” The Christian Science
Monitor, Tuesday, January 25, 2000.
BPW/USA 2000. Pay Equity and Women. September 1999. www.bpwusa.org.