Aeschylus wrote “In war, truth is the first casualty.” The 2,500 years following that observation demonstrates that we can also say that truth is the first casualty in politics. So it should come as no surprise that the Democratic Party’s attempt to portray a Republican “war on women” is fraught with disinformation.
I live in a swing congressional district—California’s 52nd. The incumbent Democrat, Scott Peters, in a particularly nasty battle, is narrowly trailing his Republican challenger, Carl DeMaio. The Peters forces are pulling out the battle-tested “war on women” card, accusing DeMaio of being “against equal pay” by not supporting a moribund Democrat-sponsored piece of legislation known as the “Paycheck Fairness Act.”
The current propaganda offensive is based on the “wage gap” between men and women in the United States which, according to the Democratic Party, is the result of “intentional discrimination or the lingering effects of past discrimination.” President Obama stated in April that women “still only make 77 cents to every man’s dollar” and that this is evidence of the “unrealized promise of equal pay for equal work.” The Democratic plan to rectify this seemingly enormous problem is to amend the Equal Pay Act of 1963 (which already makes wage discrimination based on sex illegal) with the “Paycheck Fairness Act” authored by Sen. Barbara Mikulski (D-MD) because, as Senator Mikulski explains in the text of the proposed Act, “the Equal Pay act has not worked as Congress originally intended.” Mikulski’s logic is that as long as there is any wage discrepancy there must be sex-based discrimination. Therefore the Equal Pay Act of 1963 is inadequate. With Republicans poised to gain seats in both the House and Senate, the “Paycheck Fairness Act” has no chance of becoming law anytime soon. Its only real purpose at this point is its value to Democrats as a political club (who could be against “equal pay”?). Nonetheless, laying aside political cynicism, it does offer insight into the ideological bearings of its sponsors.
Let’s start, however, by taking a look at some facts. President Obama did not cite his source for the 77 percent number, but it is at odds with recent studies, and his implication that this discrepancy indicates wage discrimination for “equal work” is, on its face, false. The statistic Obama uses is based on earnings of women vs. earnings of men. It is not a comparison of women and men in comparable jobs. No such specific studies exist because there simply is not sufficient data to make such a calculation. But even the unadjusted 77 percent number is questionable. The U.S. Bureau of Labor Statistics (comparing full-time workers only) in October 2013 released a report stating the gap is 19 percent rather than the 23 percent used by the President, and a study by Pew Research Center released shortly thereafter (comparing both full-time and part-time workers) found that the average woman in the workforce makes 84 percent of what the average man in the workforce makes, or a gap of 16 percent. But that is not the end of the story.
The Pew study notes that there are many reasons that help explain the 16 percent wage gap that have nothing to do with sex discrimination. For instance, Pew found that 42 percent of mothers, versus 28 percent of fathers, reduced work hours to care for a child or family member; 39 percent of mothers, versus 24 percent of fathers have taken a “significant amount of time off,” and 27 percent of mothers versus 10 percent of fathers have quit a job for the same reason. Pew states that “research [not to mention common sense] has shown that these types of [employment] interruptions can have an impact on long-term earnings.” Pew also notes the problems with comparing raw income figures, stating “Even though women have increased their presence in higher-paying jobs traditionally dominated by men,” women are more heavily weighted in lower-paying professions than are men. In essence, merely comparing incomes, as the President does, is like comparing apples to oranges, and it is fundamentally dishonest to state that those comparative incomes show that women are systematically paid less for “equal work” than are their male counterparts.
Radical feminists, who champion women’s “right to choose” in certain matters, are, of course, up in arms about women freely choosing to play into the hands of what they profess to be a sexist, patriarchal America by taking motherhood seriously. But in addition to making perfectly logical life choices that have the consequence of somewhat reducing earnings, women also have a greater tendency than do men to prefer jobs with better benefits even when those benefits come at the cost of lower wages. The 77 percent number that Obama cites (and the 84 percent number in the Pew study) does not reflect non-wage benefits.
In January 2009, CONSAD Research Corporation presented a study commissioned by the Labor Department entitled “An Analysis of the Reasons of the Disparity in Wages Between Men and Women.” This study is perhaps the most comprehensive ever done on the subject and makes a serious attempt to control for relevant factors to get something approximating an “equal work” comparison. The CONSAD study noted that, just as one would expect in a market economy, as the percentage of women in the workforce has risen, and as women in the workforce have become more educated (nearly half having some college education in 2007, versus 17.9 percent in 1970), and a greater percentage employed in higher paying positions (51 percent of workers in “management, professional, and related occupations” in 2007 were women), the measured “wage gap” has markedly narrowed—from 37.9 percent in 1970 to 21.5 percent in 2007 (and now to about 16 percent according to Pew’s more recent analysis).
But CONSAD went beyond that, looking at all available data and previous studies to account for factors including the factors mentioned in the Pew Research study. CONSAD’s conclusion: “There are observable differences in attributes of men and women that account for most of the wage gap.” Specifically, controlling as best as the available data allows for age, education, employment interruptions, etc., the “adjusted gender wage gap” is between 4.8 percent and 7.1 percent (as of 2007).
CONSAD’s conclusion was, apparently, not what the Obama administration’s Department of Labor wanted to hear, because, despite Barbara Mikulski’s inclusion in the “Paycheck Fairness Act” that the “Secretary of Labor shall conduct studies and provide information [on sex-based wage disparities] to employers, labor organizations, and the general public,” the Labor Department has made no effort to disseminate the CONSAD study.
Certainly, no study is perfect, though the CONSAD study is widely respected. Even feminist groups like the National Organization for Women and the American Association of University Women implicitly support CONSAD’s conclusion by themselves laying much of the “blame” for wage differentials on educational and career paths and family role choices that women make. But to quote Christina Hoff Sommers of the American Enterprise Institute, “American women are among the freest, best educated, and most self-determining people in the world. It seems unsisterly for NOW or the AAUW to suggest that they are being hoodwinked into college majors, professions, or part-time work to spend more time with their children.”
It is not unusual for politicians trying to shape policy to exaggerate the extent of problems in order to push policy objectives. So what, if anything, would the “Paycheck Fairness Act” seek to achieve, even if the problem it is supposed to address is highly overstated?
Again, sex-based wage discrimination is specifically outlawed by the Equal Pay Act of 1963. So why do Senator Mikulski and her supporters insist that the Equal Pay Act needs to be amended? The reason for the legislation, as stated within the bill itself, is “women continue to earn significantly lower pay than men for equal work.[…] In many instances, the pay disparities can only be due to continued intentional discrimination or the lingering effects of past discrimination.” These allegations are unsubstantiated, and, as we have seen with the CONSAD and Pew studies, based on false premises. But, in the mind of Senator Mikulski, and many others, since there is a measurable discrepancy in wages (regardless of the validity of the methodology of making the measurement), there must be sex-based discrimination and therefore the Equal Pay Act of 1963 needs to be more aggressive.
Under current law, if an employer can demonstrate that a wage differential exists for a reason “other than sex,” that employer should be found innocent of discrimination. The “Paycheck Fairness Act” changes this, seemingly innocuously, to “a bona fide factor other than sex, such as education, training, or experience.” But then it goes on to add, “The bona fide factor defense” will only be valid if it is “job-related with respect to the position in question” and “is consistent with business necessity” and “shall not apply where the employee demonstrates that an alternative practice exists that would serve the same business purpose without producing such [pay] differential and that the employer has refused to adopt such alternative practice.” What does that all mean? It means employers have to jump through a bunch more hoops (and ambiguous hoops at that) in order to prove their innocence. The legislation would put in a judge’s hands—a judge who probably has no business experience—the determination of what is a “business necessity.” It would potentially outlaw an employer giving preference via wages to a person with experience or education that may be useful to the company in some other position, down the road, but which is not specifically useful to an employee’s immediate duties. It would cause all sorts of confusion about what an “alternative practice” is. In short, by creating more ambiguity and hurdles for the employer, it invites more lawsuits, regardless of merit, because trial lawyers know that by increasing the uncertainty and thereby increasing the risk to the employer, employers are more likely to settle, regardless of whether there was any real discrimination.
To quote again Christina Hoff Sommers: “Under this convoluted and impenetrably murky law, feminist lawyers will file multi-million dollar class-action lawsuits and innocent employers will settle. Liability will be based on not only intentional discrimination (we already have a law against that) but on the ‘lingering effects of past discrimination.’ What does that mean? Employers have no idea. Universities, for example, typically pay professors in the business school more than those in the school of social work. They cite market forces as the justification. But according to feminist theory, market forces are tainted by past discrimination.”
To really have the tools to “proactively” root out sex-based wage discrimination (which is the term used by senator Mikulski) we would need a more extensive data reporting apparatus. And that is exactly what is called for in the “Paycheck Fairness Act.” A massive regulatory regime requires massive data collection, the burden of which seems always to be put on the one being regulated. We’ve seen the same thing with new energy usage and greenhouse gas emission data which is being thrown on to businesses of every type (not just utility or energy companies) in anticipation of a new regulatory regime (actually already being enacted in California) and a possible “carbon tax” or “carbon credit” scheme. The advocates of big government solutions to sex-based wage discrimination envision new “regulations to provide for the collection of pay information data from employers as described by the sex, race, and national origin of employees” as well as “additional data collections that will enhance the enforcement” of anti-discrimination laws.
A bill would hardly be worthy of the name, however, if it did not include some questionable spending. The “Paycheck Fairness Act” complies. It instructs the Secretary of Labor to administer a grant program, funneling public funds to government agencies, private nonprofit organizations, and/or “community-based” organizations (remember ACORN?) to provide training to “help girls and women strengthen their negotiation skills to allow the girls and women to obtain higher salaries and rates of compensation that are equal to those paid to similarly situated male employees.” Is Senator Mikulski saying that females are inherently less assertive and worse negotiators than males? Why, one might fairly ask, is it any business of government to provide, at taxpayer expense, such training? Furthermore, is it appropriate to limit such a benefit to one sub-segment of the population, at the exclusion of others? Where does this stop?
Senator Mikulski is ideologically shackled to the idea that wage-based sex discrimination is a serious issue in America and that we certainly can’t count on labor markets to correct the problem. We need government to step in and force employers to treat people “fairly”—just like governments all over the world from the beginning of time have shown themselves so adept at doing. The fact is, however, that in a market economy like we have in the United States, there is a real economic penalty to pay for businesses to engage in sex-based discrimination.
Senator Mikulski perhaps really does think that business executives all across the land are paying males more than females for the same jobs because they want to have more workplace buddies who smoke cigars, drink beer, and play poker, or that many male business executives have the same attitude towards women in positions of authority as was more prevalent in 1954. But that is not reality in 2014.
Businesses, large or small, need to make money to survive. Those that base their compensation and hiring decisions on non-economic factors will either fail or be absorbed by other companies with better management teams. That incentive is the most powerful weapon to fight sex discrimination in the workforce. And it doesn’t come with the unintended (or intended) side effects of massive regulatory burdens and an increase in baseless but costly lawsuits. But since allowing the market to work is a solution that does not involve government riding to the rescue, it is one that, regardless of the facts, will be pushed aside and labeled inadequate by those ideologically, or economically, wedded to the idea that big government is needed to solve all our problems. Markets are not perfect, and people do not always act rationally, so no, just letting the market sort things out will not eliminate sex (or race) discrimination. But honest policy makers, and those who vote for them, need to realize that at some point, intrusive government intervention does more harm than good.