Not-So-Equal Pay Day
Young women taking on large debt loads are especially at risk for pay discrimination.
By Aisha Forte
April 25, 2008
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.
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Did you even read the AAUW report? From the executive summary it states: One year after graduation, the “pay gap” is 5%. 10 years after graduation it is 12%. Do you also notice that because their don’t know where the pay gap comes from, they assume it must be discrimination?
The 77% you state controls for ALL factors? Do you know what ALL factors are? If you accounted for all factors, you would know exactly why there’s a “pay gap” if there actually is one.
College educated urban women in their 20s are making MORE money than their counterpart men in their 20s. Did they ever tell you this in your research about the pay gap?
Did you also know there are more women pursuing high education than men? I guess this is what you meant by women being more burdened by educational costs. Men don’t go to college so they don’t have to worry about loans!
— Bill Diamond - Apr 27, 12:55 PM - #Actually Bill, it’s standard in economics that when they control for all known factors (as was done when obtaining the 5% & 12% figures) and there are still statistically significant differences between the groups being measured, it’s attributed to some sort of discrimination. It’s a well established assumption in the field of economic research.
— Jessica - Apr 27, 04:14 PM - #Regardless if it is a well established assumption by some social researchers, that does not mean it is correct assumption to make.
From the book: Measuring Racial Discrimination
Published by: The National Academies Press
www.nap.edu/openbook…
From the bottom of the linked page:
Conclusion: The statistical decomposition of racial gaps in social outcomes using multivariate regression and related techniques is a valuable tool for understanding the sources of racial differences. However, such decompositions using data sets with limited numbers of explanatory variables, such as the Current Population Survey or the decennial census, do not accurately measure the portion of those differences that is due to current discrimination.
— Bill Diamond - Apr 27, 08:02 PM - #秘密
— tim - Apr 27, 08:31 PM - #Rather than attempt to achieve what seems to be a very challenging goal (catching up to white men) without the use of some fuzzy legislation (comparative worth), why not simply pass a law that forces white men to work less? Rather then elevating the power of women through economics, just cut the power of men down to womens’ level. Simply put, if white men were to earn less, this generation would be the last to have an Equal Pay Day.
— Lee - Apr 27, 09:26 PM - #“We do not know what is responsible for variable X.”
“Logically, then it must be discrimination!”
That’s some fine “science” there…
BTW, if we really can pay women only 77% of what we pay men for the exact same work, why do any men have jobs? Think of the savings in labor costs! Every corporation could trim 23% off the payrolls!
— CTD - Apr 28, 11:56 AM - #If you do what white men do to earn what white men earn, then you will earn what white men earn. Oh forget it, just pass some law.
Why is there even a discussion about discrimination? Why do you have to justify it at all? Just pass your special treatment law so we don’t have to hear about it anymore.
— Veritas - Apr 28, 04:00 PM - #“BTW, if we really can pay women only 77% of what we pay men for the exact same work, why do any men have jobs? Think of the savings in labor costs! Every corporation could trim 23% off the payrolls!”
Because its not the same work. It may be the same job, but men are typically more dedicated -not smarter, not more creative, just more focused. Men do not usually seek balance in their lives like women do. Now these fems want to impose a “no balance penalty” on men; men who focus too much on work effort because that is all they really want to do. So the women want the employers to pony up more to subsidize their desire for balance – a sort of “paid balance.” Where does the money come from? Either higher prices for products or lower wages for men and therefore everyone else, including women. That’s why Lee’s suggestion above is beginning to sound more logical – rather than have all these complex formulas and big gov. to run it, just cut men’s wages or force them to work less.
— Veritas - Apr 28, 04:09 PM - #Perhaps we should mention that women bear the burden of child-rearing almost entirely.
Women who choose to have children are discriminated against in the workforce. The Mommy Track question influences the way that employers seek-out and place employees.
Women are graduating from college at a higher rate than their male counterparts, true — but they’re also much more likely to hold lower-paying, “pink-collar” jobs after graduation, even though they’re more educated than their male colleagues.
Young urban women are out-earning their male counterparts — but check back with them in 15 years to see how far they’ve been promoted. If current trends continue, we’ll find that they will be making much less money than men who do the same work.
— Amy - May 2, 02:02 PM - #