Daniel Sutter: How far should we take equal pay?
Whether the U.S. Women’s Soccer team should be paid the same as (or more than) the U.S. Men’s team is one part of gender pay equity. The debate highlights how determinants of pay in markets do not align with our notions of fairness and equity. In the labor market, supply and demand set wages and salaries. Potential employers (the demanders of labor) make offers to potential workers them (the suppliers). The two sides must reach mutually agreeable terms. Economists recognize that factors like the number of people with a given talent or the ability to learn a craft and the potential for machines to replace workers affect wages. Many of these factors, however, do not seemingly justify people earning different amounts of money. For instance, LeBron James’s and Steph Curry’s unique basketball talents allow them to earn over $30 million a year. More people watch the Men’s World Cup than the Women’s World Cup, resulting in prize pools of $400 million and $30 million for the most recent tournaments. But we consider hard work, conscientiousness, and honesty as reasons why one person should earn more than another. Do women make less than men? One widely reported statistic is that women make only 77 percent as much as men. Yet economists know that earnings depend on education, experience, and hours worked among other factors. Controlling for these factors eliminates most of the pay gap. Yet the absence of a pay gap does not leave us without concerns. Differences in educational attainment by gender, particularly in science and technology, may reflect biases. And women are less likely to leave the labor force to have and raise children, which may reflect stereotypes. The interpretation of pay gaps, when they exist, is also complicated. The determinants of supply include personal values and decisions. The American Enterprise Institute’s Mark Perry and Andrew Biggs note that men hold 94 percent of jobs in the 20 professions with the highest on-the-job fatality rates. These dangerous jobs pay higher wages to compensate workers. Is it gender bias if women are less willing than men, on average, to take dangerous jobs? The absence of a pay gap when controlling for relevant factors may seem surprising, but the profit motive can explain this. Suppose that airlines preferred hiring men over women as pilots. If pilots earned $150,000 a year, equally skilled female pilots shut out of the market might be willing to work for only $100,000 a year. A high-minded airline might break the gender barrier and hire women. But so would a greedy airline, to save $50,000 per pilot. Until the pay gap disappears, profit-seeking businesses should prefer hiring women. What if bias affected access to education and training? Consider medicine, where arguably women were steered (or forced) into nursing, while men were encouraged (or allowed) to go to medical school. A nurse does not have all the skills of a doctor, but if not for bias, many women nurses would have become doctors. Comparable worth laws mandate equal pay for jobs requiring comparable skill and responsibility. Some free market economists worry that firms cannot afford the mandated higher pay for women. Yet married men’s earnings premium demonstrates that employers typically have some discretion on pay. They can give a raise to a married man to help support his family instead of a single man looking to buy a fancier car. A bigger problem, I think, is that comparable worth changes the salary setting process. The labor market balances supply and demand; no one person or entity sets pay. Any gender pay gaps result from decisions by thousands of people. Enacting comparable worth requires a government expert to determine which professions deserve equal pay. Once the government decides some wages, any group of workers can demand that the government boost their pay. Women have faced discrimination and restriction of their right to earn a living. This is unfortunate. Gender bias is, I think, disappearing, and where pay gaps still exist, greed in the market will help equalize pay. Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.
Equal pay activist Lilly Ledbetter endorses State Rep. Adline Clarke
Alabama State Rep. Adline Clarke has won the endorsement of the woman who became the face of the women’s equal pay movement in Congress. Lilly Ledbetter, the Alabama-native and namesake of former President Barack Obama‘s first piece of legislation signed into law back in 2009, endorsed the Alabama House of Representatives District 97 representative on Tuesday ahead of the upcoming election. “Adline is leading the fight for women and our families in Montgomery,” Ledbetter said of her endorsement. “She has a proven record on the issues that most impact our families and future and I am proud to support her.” Clarke said she’s honored to have Ledbetter’s support “I am so incredibly honored to have the support of Lilly Ledbetter,” said Clarke. “Her work on behalf of women and all citizens has had a tremendous impact on me and so many others. I look forward to working with her again during the next session to finally pass a long overdue Equal Pay bill here in Alabama.” Clarke’s fight for pay equality In the State House, Clarke has led the fight for Equal Pay legislation and has been an important voice on issues including ensuring Alabamians have access to well paying jobs, well-funded schools and quality affordable healthcare. In March, she introduced HB368. The bill would prohibit employers from paying their employees less than the wage they would pay a member of the opposite sex for a similar job or responsibilities when viewed as a composite of skill, effort, and responsibility, as specified. Alabama is one of only two states, along with Mississippi, without an equal pay law. “Nearly every state has a law prohibiting employers differently based solely on gender. I’m disappointed. I would have thought we would have passed a long long before now,” Clarke told AL.com in March.“Timing is everything.” Ultimately, Clarke’s bill, which mirrored federal law but tasked the Alabama Department of Labor with enforcement, failed. “Clarke is definitely planning to introduce it again and given the bipartisan coalition in support which she built last session (27 sponsors and cosponsors men and women, Democrats and Republicans),” said Marion Steinfels on behalf of Rep. Clarke. “She feels confident we will finally pass it here.” Clarke faces Republican candidate Stephen McNair on Nov. 6.
Alabama women suing for equal pay lack state protection
Amy Heatherly believes she would have been paid at least $50,000 more to do her job over the past five years if she had been a man. As the only female human resources director overseeing compensation at the University of Alabama’s main campus, Heatherly said she knew for years she was getting paid less than three men on a similar management level with fewer years of experience. She filed a complaint with the Equal Employment Opportunity Commission in 2014, after receiving a raise that was half of her male colleagues’. In 2016, she sued the university. “It did not have as much to do with the money but me feeling like I’m paid my worth, or at least paid equitably, like you’re being respected and recognized for what you do,” said Heatherly, 52, who has worked at the university for 19 years. The university argues differences in pay are justified because her position is not comparable to her male colleagues. Heatherly says that she is a victim of gender discrimination because she’s not receiving equal pay for equal work. White women in Alabama make 72 cents to a white man’s dollar. Black women make 57 and Latinas 47, the National Women’s Law Center calculated. Federal law prohibits wage discrimination on the basis of sex for equal work, except where there is a difference in experience or productivity. Alabama and Mississippi are the only two states that don’t have equal pay laws. Rep. Adline Clarke, a Democrat from Mobile, unsuccessfully pushed lawmakers to approve equal pay legislation. Clarke’s bill, which failed this legislative session, mirrored federal law but tasked the Alabama Department of Labor with enforcement. She said that would hold employers more accountable. Lilly Ledbetter, the Alabama woman who lost a lawsuit over being paid less than her male counterparts, is the namesake of the law signed by former President Barack Obama to make it easier for women to sue over wage discrimination. She said people wrongly think that pay discrimination does not exist. “It seems like they all have blinders on,” Ledbetter told the Associated Press. “The corporate world in some regards feels that equal pay for equal work is a myth. They think we have it.” The university said in court filings that it explained Heatherly’s low raise was because of how she handled an employee complaint and software problems. Heatherly said they never talked with her about disciplinary problems at the time and gave her no performance evaluation. Heatherly’s complaint said that when she sued, she and her three male colleagues all had the title of director, each with unique responsibilities. “She’s the only person in the job, so then can she never be a victim of sex discrimination because there’s no comparator?” said Heatherly’s attorney Charles Guerrier, who worked for the EEOC for three decades. “If you segregate the jobs and underpay the women, you can’t violate law because there are no men doing the same jobs.” The university counters in court filings that Heatherly’s role was not comparable because it wasn’t systemwide and had different responsibilities. The university uses a pay grade system that tallies salaries based on the differentials. A statistical analysis by Heatherly’s economic expert reported she was paid less than 19 out of 20 men in her pay grade. The expert calculated the university paid female administrators between 5 to 14 percent less. The university’s expert responded that the analysis was “flawed” because jobs can’t be compared within the same pay grade. The university said doing so is “ignoring legitimate factors that drive compensation,” like type of work and job performance. Monica Watts, the university’s associate vice president for communications, said the university could not answer questions or comment on the ongoing case. In response to an open records request for documentation of equal pay complaints, lawsuits and settlements, the university said they have “no responsive public documents that compile the information.” Federal court records show two University of Alabama at Birmingham professors sued over unequal pay in 2006. One settled and one left the university, according to their attorney. Heatherly said the lawsuit has dashed her dreams of a promotion. She is her family’s breadwinner, currently earning more than her husband at $131,000 a year. “There are days when I wonder, why do I keep helping a place that’s done this to me?” she said, wiping at tears. “If I can help to make it better for other females, and I know I can’t change the world, but if I do that I’ll feel like I’ve had an impact.” Republished with the permission of the Associated Press.
Push for greater equality: Adline Clarke proposes ‘gender pay gap’ bill
It’s a fact: women earn less than men. According to the U.S. Department of Labor, women who worked full-time, year-round in 2014 earned on average, 79% of men’s median annual earnings. That’s not sitting well with one Alabama lawmaker who’s hoping her gender pay gap legislation makes it across the finish line as the 2018 legislative session nears its close. HB368, sponsored by Mobile-Democrat State Rep. Adline Clarke, would prohibit employers from paying their employees less than the wage they would pay a member of the opposite sex for a similar job or responsibilities when viewed as a composite of skill, effort, and responsibility, as specified. Alabama is one of only two states, along with Mississippi, without an equal pay law. “Nearly every state has a law prohibiting employers differently based solely on gender. I’m disappointed. I would have thought we would have passed a long long before now,” Clarke told AL.com “Timing is everything.” However, HB368, also known as the “Gender Pay Gap,” would not just make wage inequality illegal, but would also add several provisions to the law including: Requires an employer to affirmatively demonstrate that a wage differential is based upon one or more specified factors Prohibits an employer from discharging, or in any manner discriminating against. or retaliating against an employee for the enforcement of these provisions Provides for enforcement of the bill Provides that an employer may not prohibit an employee from disclosing the employee’s own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under these provisions And requires an employer to maintain a record of wages paid to his 15 or her employee for a certain amount of time. The proposal, filed on Feb. 1, is scheduled to appear before the Alabama House State Government Committee on March 21. Alexander City-Republican State Rep. Mark Tuggle, the committee’s chairman, hopes to have Clarke’s proposal on the committee agenda next week. The bill currently has 26 co-sponsors, both Republicans and Democrats: Autauga County-Democrat Kelvin Lawrence Mobile County-Democrat Barbara Drummond Barbour County-Democrat Barry Forte Perry County-Democrat Prince Chestnut Jefferson County-Democrat Rolanda Hollis Madison County-Democrat Anthony Daniels Jefferson County-Democrat Rod Scott Tallapoosa County-Democrat Pebblin Warren Choctaw County-Democrat Elaine Beech Madison County-Democrat Laura Hall Jefferson County-Democrat Merika Coleman Jefferson County-Democrat Mary Moore Mobile County-Democrat Napolean Bracy Blount County-Republican Connie Rowe Shelby County-Republican April Weaver Talladega County-Democrat Barbara Boyd Jefferson County-Democrat Juandalynn Givan Etowah County-Republican Becky Nordgren Morgan County-Republican Terri Collins Montgomery County-Democrat John F. Knight Montgomery County-Democrat Thad McClammy Tuscaloosa County-Democrat Artis McCampbell Mobile County-Democrat James Buskey Bibb County-Democrat Ralph Howard Lauderdale County-Democrat Marcel Black Houston County-Democrat Dexter Grimsley
Doug Jones co-sponsors legislation to ensure equal pay for women
Newly elected U.S. Sen. Doug Jones is calling for an equal pay law. On Tuesday, the Democrat announced he will co-sponsor legislation designed to address the pay gap between men and women. S.819: The Paycheck Fairness Act, would strengthen the Equal Pay Act of 1963 and guarantee that women can challenge pay discrimination and hold employers accountable. “Despite making up half the workforce, American women still routinely face obstacles to receiving the pay and benefits they’ve earned,” said Jones. “We have a duty to make sure that women are compensated fairly for the jobs they do. I’m proud to co-sponsor the Paycheck Fairness Act and I look forward to working with my colleagues to see this common-sense legislation passed.” According to the Institute for Women’s Policy Research (IWPR), five decades after the Equal Pay Act of 1963, women continue make an average of 80 cents for every dollar earned by a man. The pay gap is even wider for women of color, with African American women making 63 cents on the dollar, and Hispanic women making only 54 cents, on average, compared with white men. The Paycheck Fairness Act would strengthen and close loopholes in the Equal Pay Act of 1963 by holding employers accountable for discriminatory practices, subject to the same remedies as discrimination based on race or national origin. The bill endeavors to end the practice of pay secrecy by easing workers’ ability to individually or jointly challenge pay discrimination, and strengthening the available remedies for wronged employees.
