July 23, 2010

Pay Equity: Fairness and Economic Recovery

Posted in Blue Oregon at 9:20 am by Nova Newcomer

Originally posted at BlueOregon.com.

85%. Women are responsible for making 85% of all consumer purchases, but still make only $.78 for every dollar a man makes. Make that $.68 for African-American women and $.58 for Latinas for every dollar. And the disparity hits single women with children hardest — they average up to 44% less pay. The “Paycheck Fairness Act” supported by President Obama’s Administration aims to close that ever-present gap.

I spoke with Senator Merkley on Tuesday about the Administration’s support for pay equity following his attendance at Vice President Joe Biden’s Middle Class Task Force event. Vice President Biden emphasized that with two-thirds of families being run by working parents, the “Paycheck Fairness Act” would be creating a change to reflect the reality of today’s families.

Senator Merkley added, “The average income of working families has been flat since 1974. Since then, the economy has generated a tremendous amount of wealth (even with the current Great Recession) and we have seen a growing disparity.” And the continuing wage gap for women only exacerbates the disparity.

On its face, the fight for pay equity is simply about a principle of fairness: equal pay for equal work. A popular graphic from pay equity advocates is a coupon (see below) for 23% off services for women since they make that much less. But no such coupon exists for women. And working women with children, in particular, face a double whammy. Not only will they fall prey to the across-the-board wage disparity that women experience, but they also can face wage depression in the form of “mommy tracking” where mothers are put on a different career development path for various reasons.

23% off coupon

When you combine all of that with a lurching economy, pay equity takes on a brighter sheen. With women overwhelmingly responsible for the majority of consumer purchases, depressed wages for women have a ripple effect in the economy. In moderate income families, bringing in more money often results in spending more money to raise the family’s standard of living. Perhaps it’s new clothes for school, a much-needed appliance, or other purchases that get delayed due to lack of resources. Getting a fair and full wage into the hands of working women encourages spending and pumps up the GDP.

I don’t know about you, but I vote for doubling down on fairness and bolstering our economic recovery.

So what does the “Paycheck Fairness Act” do primarily to close the wage gap:

  • First of all, it would place gender-based discrimination on par with other forms of discrimination. As Senator Merkley said, “It’s an injustice that wage disparity exists for such a huge proportion of our work force.”
  • Secondly, it would protect employees from retaliation for asking about or discussing wages with other employees. Women can experience a loss of a half a million dollars over the course of their career for not negotiating their first salary. When employees have access to information about salaries, they are in a better position to successfully negotiate their salary.

In addition, the Obama Administration wants to close the 11% gender-wage gap found by the General Accounting Office in the federal workforce and is working on improving collection of data on salaries that will be open and accessible to the public. (Read the entire equal pay task force document.)

Vice President Biden summed it up nicely at his event on Tuesday. “Closing the gender pay gap, helping parents keep their jobs while balancing family responsibilities, and increasing workplace flexibility – these are not only women’s issues, they are issues of middle class economic security.”

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