Not-So-Equal Pay Day
Young women taking on large debt loads are especially at risk for pay discrimination.
Women still earn about 77 cents for every dollar a white man earns. (iStockPhoto).
This Tuesday, the nation observed Equal Pay Day, a "holiday" established in 1996 to highlight the pay disparities between men and women. Fittingly, the Senate considered the Fair Pay Restoration Act on Wednesday, but the bill failed to get a floor vote. And, since the White House has threatened to veto the legislation, the bill has temporarily come to a standstill. So our country’s pay gap persists—and when combined with the increased debt loads placed on students after graduation, young women are especially susceptible to pay discrepancies compounded over time.
The issue of pay discrimination has come to the forefront now because last year the Supreme Court made it harder than ever to sue for pay discrimination in court. In Ledbetter v. Goodyear Tire & Rubber Co., the Supreme Court decided in a 5-4 majority to severely limit the time during which workers can file pay discrimination lawsuits. The Supreme Court ruled that victims of pay discrimination only have 180 days from the initial pay setting decision to file a lawsuit. The ruling contradicted a previous precedent set by the Equal Employment Opportunity Commission which interpreted the statute to mean that an individual has 180 days after each subsequent discriminatory paycheck to file suit.
The Supreme Court’s decision ignores the realities of workplace discrimination. A 2004 study by Leonard Bierman and Rafael Gely in the Berkeley Journal of Labor and Employment Law showed that only 1 in 10 companies have "pay openness" policies. Typically salary and compensation information is confidential and thus unavailable for comparison, but pay openness policies allow for accessible and readily available compensation information for employees.
And now the Supreme Court, in its Ledbetter ruling, has limited the ability to sue and recover damages. Justice Ruth Bader Ginsburg’s dissenting opinion urged Congress to remedy the decision. “Once again,” her dissent read, “the ball is in Congress’ court.”
And Congress took up the cause. Last summer the House passed the Ledbetter Fair Pay Act of 2007 (H.R. 2831), the partner to the bill the Senate voted on this week. The proposed legislation restores Congress’s initial intent by explicitly stating that victims of pay discrimination have 180 days after the last or most recent discriminatory paycheck. This remedy is critically important, because without it, victims of pay discrimination have a limited period of time to pursue legal recourse.
In a study released last year called “Behind the Pay Gap,” the American Association of University Women revealed that, even controlling for all factors, women are only receiving 77 cents for every dollar that men make. Minority women make even less; African American women earn 67 cents on the dollar, and Latinas earn 56 cents for every dollar when compared with white men.
The persistence of pay discrimination could not come at a worse time for young women. Students today are graduating with more and more loans. According to the College Board’s “2007 Trends in College Pricing” study, the costs of four-year public universities increased by 4.4 percent more than inflation per year over the last decade, while four-year private universities increased by 2.9 percent more than inflation per year over the same period of time. Often students are forced to offset the rising cost of tuition with more student loans. The average student today graduates with roughly $19,000 of student debt—that’s more than most down payments for a house. A recent Washington Post article outlined the effect that the mortgage crisis and credit crunch is having on the student loan industry, forcing companies such as Sallie Mae, Bank of America, and Citigroup’s student loan subsidiary to discontinue granting student loans. And a recent MTV/CBS poll noted that two-thirds of young people think they have fair or poor job prospects. Things are tough for young people in general, and young women face a pay gap as well.
To be sure, laissez faire economists believe that pay discrepancies between men and women are due principally to the nature of jobs typically held by women and the institutional segregation of jobs in the workforce. But the wage gap represents inequality as well as discrimination. The report by AAUW noted that the same jobs for the same work paid less, and even when men and women did the same job, men often had better titles, earning them bigger salaries. In other words, laissez faire economists are falsely chalking pay discrimination up to “the way things are.”
Initially, pay discrepancies may seem insignificant, but the cumulative effect over a lifetime career can lead to great income and wealth disparities. Not only are raises, promotions, and bonuses usually determined by one’s base salary, the social security benefit received later in life is determined by your working salary. Therefore, if women are consistently paid less during their working years, they are not only economically disadvantaged during their working years, but in retirement as well.
As trite as it may sound, in today’s society money still equates to power. While Congress stalls on legislation, women continue to earn less. When combined with debt most young people today face, young women are especially at risk for earning less over a lifetime. If young women expect to make gains politically and socially, it must first be accomplished economically. Young women have a real stake in the Senate’s failure to pass the Fair Pay Restoration Act. It is the responsibility of young women, and all young people, to ensure our generation is the last to need an Equal Pay Day.
Aisha Forte is a junior at University of North Carolina-Chapel Hill.