Last week (USA Today article, WorldatWork Public Policy Perceptions post) the Obama Administration announced a renewed push for the passage of the Paycheck Fairness Act, a change to federal wage and hour laws which would, among other things:
-Make it more difficult for employers to defend against gender discrimination claims by altering the standards for this defense,
-Allow for uncapped punitive and compensatory damages, and
-Change class action suits from "opt in" to "opt out", so that workers are automatically made members of a class action suit unless they actively choose to be excluded.
In addition, the Justice Department and the EEOC have announced their intent and commitment to step up enforcement efforts with respect to pay discrimination charges.
These regulatory changes and efforts are being presented as an important and necessary response to the persistent problem of pay inequality, as illustrated by the constantly quoted statistic that women earn 77 cents for every dollar that men do, which is served up as indisputable evidence of widespread pay discrimination.
But is it really?
In her post 77 Cents and Gender Discrimination: The Wrong Conclusion, my Compensation Cafe colleague Stephanie Thomas explains why the "77 cents" statistic can't be due to gender discrimination. In fact, as Stephanie explains, research done by Francine Blau and Lawrence Kahn, whose 2007 article is the original source of the "77 cents" statistic, concludes that all but a gap of $0.09 per hour can be explained by non-discriminatory things: experience, chosen occupation, etc.
In examining their analysis and conclusions, and looking at the kinds of things that were not considered there (overtime hours, shift premium, etc.) Stephanie opines that the unexplained (and possibly due to discrimination) portion of the wage gap could likely be even less than $0.09.
My take away? Wage gap: Yes. Wage gap due to widespread discriminatory practices by employers: Probably not.
And yet, the Paycheck Fairness Act places employers squarely in its sights as The Villain in the wage gap tragedy.
Are we pushing forward major regulatory changes, which place additional burden on employers during a tenuous economic recovery, based largely on passions whipped up by an inaccurately cited and potentially misleading statistic? I hope not, but it's looking that way to me.
What about you?