Dear Legislators: A Missing Link to Paycheck Fairness?

In an effort to correct pay discrimination on the basis of gender, our representatives in Washington have left no stone unturned, covering the waterfront with proposed efforts that range from the potentially unprecedented insertion of government into private pay practices to a national award for pay equity in to the workplace to a grant program targeting negotiation skills training for women.

Or have they?

I see a huge hole, a missing link, among this tasklist of possible remedies.

Pay equity proponents have a tendency to view the labor market (and its incentives) as the enemy - a force that must be cowed and overcome in order to even the playing field for women.  This is the reason that comparable worth initiatives (which, at their core, seek to override the influences of the market on pay) are such a common centerpiece of pay fairness initiatives.

Many, in the private sector (in general) and among businesspeople in particular, take exception to these anti-market provisions.  This is why they have been (mostly?) removed, for the moment, from this week's version of the Paycheck Fairness Act.  And this is because the market, in fact, performs an important and necessary task, not just for business but for our society as a whole, in exerting its influence on pay.  The market drives pay differences, not on some arbitrary and capricious whim, but for a purpose, the purpose of meeting society's demands for different skills and contributions.  Mess with the market and you mess with our collective ability to get the work done that is necessary for our country to grow and prosper - particularly in today's flatter world.

The market, for example, has created incentives - in the form of higher pay - for many scientific and engineering jobs; jobs where need and demand continues to outstrip supply, where we have often been forced to import talent when the homegrown kind comes up short, and where (most unfortunately) men significantly outnumber women.  Can the answer be to override these market incentives in the name of gender equity, thus handcuffing our ability to meet our talent needs - in a time when technological innovation and improvement are so critical?

Or could the answer be to embrace that market on behalf of women?

One of the root causes of pay disparity between men and women is our (women's) under-representation in a number of high paying fields.  Why not take some of the dollars that our legislators are willing to throw at this issue and use them to attract more women to, and help get them into, these critical and high paying fields? This would ultimately benefit everyone - women, businesses and our society overall.

I can envision a multi-pronged effort that could potentially include initiatives to:

• Identify the high earning fields where women are under-represented*.

• Examine the extent to which these professions can be "re-branded" and better marketed, in order to make them more attractive to women.

• Target efforts early (elementary, middle and high school) to get girls interested and involved in the areas of study that will prepare them for these opportunities.

*Perhaps this effort would overlook those professions which include physical barriers to female participation (e.g., size, strength), perhaps not...

Readers, what do you think?  Legislators, are you listening?

Comments

[Michael Haberman, SPHR]

Bravo! Superb!

[Laurie Ruettimann]

Ann, I just read Predictably Irrational and Chapter 2 has an interesting take on the free market and why it may not be so free. Have you read it?

The author, Dan Ariely, examines the psychology of market capitalism and goes to great lengths to debunk the authenticity of the 'supply versus demand' argument. It's not directly related to paycheck fairness, but I often hear the old argument that 'the market' would pay more for women if their skills were in greater demand. I've also heard that women would flock to higher-paying jobs in the marketplace if they were given the skills (math, science) at an earlier age.

The chapter from the book seems relevant to this discussion because the free market, compensation, etc., and other aspects of HR are never rational. We forget that human beings govern the process, and there may be a role for a reasonable and thoughtful government (if one exists) to regulate the marketplace - which is where paycheck fairness comes in.

Anyway, it's a good book, and I recommend it to all HR pros.

[E James (Jim) Brennan]

Ouch. Too much to say, so edit away. Up front, remember that “free market” is an unpopular phrase in DC right now.

1. You are correct, Ann, that "getting a male job" will create upward advancement in female wages, because the best research confirmed decades ago that you can accurately predict pay by the percentage of protected class incumbents. It was captured by the Trieman/Hartmann "part-correlation" formula confirmed in Congressional research conducted by the National Academies of Sciences. Hence, female execs may experience the least pay discrimination. Other cogent examples are Dentists (where more women have caused their doctors' medical pay premium to drop relative to other medical professionals) and Compensation (where an old ACA report showed an ~17% reduction for Female status, all other member characteristics being the same), and "the telecommunications industry" since AT&T broke the gender-bar to force men to become operators and allowed women to become linemen for mutual upward progression.

2. Physical requirements are a non-issue in most jobs, since technology literally takes most of the heavy lifting away, plus sweat-labor is negatively correlated with pay (brain-work pays more) and much has been off-shored.

3. The sticky stuff comes in similar/parallel jobs with tiny non-identical differences and gender-based titles, like where the Administrative Assistant would be a woman but the guy doing 99.9% the same thing would be named and paid as a Jr VP. Yes, it did and probably still does happen.

4. Shifting more women into male jobs helps but does not solve the continuing underlying problem and merely isolates it by driving it lower. It’s a kludge patch, like telling folks with DWB issues to move out of Beverly Hills.

5. When you said, “One of the root causes of pay disparity between men and women is our (women's) under-representation in a number of high paying fields,” did it ever occur to you that maybe that’s WHY those fields pay high, because they are male-dominated? The real market issue is not underpayment of women … they are paid the minimum market clearing rate, I guarantee you… the problem is the overpayment of men with excessive differentials disproportionate to the job value differences but directly related to the WASP male demographics. Subtle argument, but statistical fact.

[jessica lee]

thanks for blogging about this ann....

at the time i'm reading this post, i realize that the PFA has passed in the house. that doesn't mean it's too late though, action can still be taken to affect the senate vote!

i heard an interesting piece on NPR that examined the combo of race and gender in pay gaps - so to add to your multi-pronged effort, i'd say initiatives should also target, or even specifically target, women of color.

it's hard for me to believe that laws will effectuate change - laws don't change behavior. behavior changes through influence, and people effectuate change. plus given that the gov is highly ineffective and bureaucratic, enforcement agencies like the EEOC and DOJ aren't equipped to enforce even if the PFA were to be passed into law. i'm just sayin'...

[E James (Jim) Brennan]

Every comment posted here is correct. NB: both "comparable worth" (equally-valued work) and "pay equity" (identical work) always apply to all protected classes. But it gets awkward referring to "protected classes" and some of the metrics are more conveniently collated and referenced by gender. Quite true, that the situations become more compelling when you add in the additional disparate treatments of various EEO classes, including race, religion, (perceived) national origin, the aged, veterans, disabled, etc. Sure I forget some. Said it decades ago, that the vast majority of workers are protected under SOME category or another, counting women and men over 49 just to start with.

[Ann Bares]

Wow - what a great set of comments. Thanks, all, for sharing your thoughts and reactions here. Let me respond to the first few while I have a minute.

Mike:
Always appreciate the link - thanks!

Laurie:
I looked up Predictably Irrational - sounds like an interesting read. My copy is on order. I don't think it's a question of "the market would pay more if their skills were in greater demand" - as if we were born with and limited to using a particular set of skills. I'm also not sure that we will automatically flock to higher paying jobs if given access to those opportunities - we already have that in many areas and we aren't taking advantage of it. That's why I think it's partially a marketing/branding thing. Many of the technical, traditionally male professions have a "brand" that discourages women from considering them. I guess that's why I believe the pay disparity thing is a very complex and nuanced problem - with a lot of different facets that must be addressed. And I prefer that we deal with it, as much as we can, at the "root cause" level.

Also agree with you that the market, and its influences, may not necessarily be rational. Which makes market not always the best or entire solution to a problem. But we also need to deeply understand and appreciate the method behind market's madness, so that we can be assured - as much as is possible in this wacky world - that our intervention attempts aren't going to backfire on us in unanticipated and undesirable ways. That's why I think the kind of discussion that we're having here is so important - thanks for joining in!

[Ann Bares]

Jim:

Yes, yes, yes, yes and yes. I do get all that. Which is why it is a complex and many faceted problem - and I acknowledge that am focusing here on only one aspect of its potential remediation. But pushing forward on this front still makes sense to me. Yes, when you push the baloon in on one side it invariably pops out on the other (and not in the place you predicted). Still, I stick to my guns on this one - because we (as a country) need women in these roles. And, by the way, its likely going to be a net positive for women's pay.

Jessica:

Everyone expected it to pass quickly in the House. The key will be the Senate, and I don't know how quickly it will come up there - or if it will be introduced in the near future by Sen Clinton, as some predict.

I think the women of color aspect is an interesting one - and so is the cultural aspect of the pay disparity problem, as you've blogged before.

Laws like this, to me, focus too much on the symptoms and not enough on the underlying issues. While focusing exclusively on the underlying issues may be too difficult and too long-term in its timeframe, I'd still like to see the balance tipped a bit more in that direction. And that's not even getting into the bureaucracy, inefficiency, etc. of Washington.

Thanks again for the thoughts!

[Wally Bock]

The behavioral economists look at those issues that Laurie addresses in her post. We should add the fact that humans are also the flawed and irrational beings who will be crafting legislation. The book, by the way, is excellent.

There's one more complication that hasn't been mentioned yet. Laws are fiendishly difficult to write well. How will this legislation deal with fields where there are physical differences that matter (firefighting for example) or fields where males are "under-represented" (public relations)? It seems we often try to write laws and subsequent regulations to cover all situations which is simply impossible.

[Ann Bares]

Wally:

All good points. As always, there are flaws and irrationality on both sides of the equation here - in the market and in the human beings who craft (and interpret) legislation. All of which reinforces your point about the difficulty (or even impossibility) of trying to draft laws to address complex and many-faceted problems.

In our market versus regulation discussion, we shouldn't lose sight of the fact that there are already laws in place that outlaw and penalize gender-based discrimination. Evidence convinces us that pay disparities persist. The question becomes whether the best way to remove them is through greater punishment and a broadening of the definition of discrimination (in ways that I think could ultimately back-fire... perhaps badly)- or through deeper study and greater attention to the underlying causes of the disparity. I happen to believe that current legislation focuses too much on the former and largely overlooks the latter.

All that said, I'm looking forward to getting and reading "Predictably Irrational" - based on the endorsements here.

Thanks again - all - for the terrific discussion on this!