The Equal Pay Act of 1963 mandated that employers could not pay unequal wages to men and women who perform jobs that require considerably “equal skill, effort and responsibility, and that are performed under similar working conditions within the same establishment.”
In other words, the jobs do not need to have the same title, just have similar requirements and working conditions. After the Equal Pay Act was passed, women’s salary increased from 63 percent of a man’s salary back then to roughly 80 percent in modern history.
Today, described in a study completed by the American Associate of University Women, which was trying to prove the existence of an overwhelmingly large pay discrepancy, found that when you factor in relevant variables such as education, experience, performance, and seniority, the wage gap shrinks to only 7 percent.
There is a human capital theory that is based on the premise of “compensating wage differentials.” In other words, people who value and require flexibility in work hours or conditions will choose occupations that offer that type of flexibility. As a result, they exchange high-wage but low-flexibility work for low-wage but high-flexibility work.
Women gravitate to these lower-wage jobs because they seek the benefits that the increased flexibility will give them while their children are still at home. The problem then is not that there is a gap between the women who have chosen a lower-waged job and the men who chose a higher-wage job but that women end up being punished for their choice.
For example, there is no explicit penalty for becoming pregnant written in a company’s contract with a female employee, but women who take advantage of family-friendly policies — e.g., flexible hours or maternity leave — suffer in the form of slower wage increases and threat of job loss.
This unofficial motherhood penalty was quantified by a study that shows that for every child a woman bares, she suffers a 5 percent loss in wage compared to women that forego pregnancy.
At first blush this would seem to confirm a gender-based discrimination in pay, but the study went deeper. It showed that 23 percent of mothers within 10 years after graduation leave the workforce. Taking these two pieces of information together shows that the 5 percent loss in pay is not directly attributable to the simple fact of bearing children but rather the real and appreciable risk that a company will invest time and training into an employee who is increasingly likely to leave with the birth of each child.
It is culturally expected for women to stay home and raise children as opposed to men leaving work to be Mr. Mom. Most companies in the United States do not offer any sort of paternal leave and usually allow a mere 12 weeks for mothers. Calculated out, 5 percent of a woman’s salary she loses when she has a child equals more than the amount of pay she would have earned in those 12 weeks she took off.
If there really is such a discrepancy in pay between men and women, where a company could save 20 percent of their payroll by employing women over men, why wouldn’t more companies choose to have a staff made up mostly, if not of all women? Payroll is the single largest expense in most businesses. Lowering salaries for each position by 20 percent by employing women would be advantageous for their company. The wage gap should encourage the employment of women by being preferred to their male-counterparts who come with a higher price tag.
Legislation was necessary to catalyze movement towards women’s equality in the workforce, but it can’t overcome economic or natural forces when dealing with the types of jobs women choose or their eventual exit from the labor pool.
Employers base salary on variables like education, experience, performance and seniority. If we want to end claims of discrimination, then leave no doubt that you are the most qualified woman for the job.
As a middle child, Carly Roes has a fine-tuned sense of justice. A mother of two and master of none, she enjoys her experience one day at a time.
