Paycheck Fairness Act Is Based on a Misapplied Statistic
For women's sake, we need more hiring, not more red tape
May 4, 2012
The Paycheck Fairness Act failed to become law in the 111th Congress, when the House and Senate had overwhelming Democratic majorities and President Obama, in his State of the Union Address, called the bill "common sense."
The act is based on a misapplied statistic, that women earn 77 cents on a man's dollar. This is true when comparing all women's wages with all men's wages, but not when comparing men and women with the same experience in the same job. The 77 cent statistic combines men and women who work in different jobs with different numbers of hours. When job, experience, and hours of work are taken into account, rigorous economic studies show women make about the same as men—95 cents on a man's dollar.
When women believe they are the victims of discrimination, they have many laws under which to seek justice, such as the Equal Pay Act, the Lilly Ledbetter Fair Pay Act, and the Civil Rights Act.
On average, women will never be at complete parity with men, because they choose different jobs and many choose to combine work and family and work part time. When women work full time, they work fewer hours. In April, full-time working women worked 12 percent fewer hours than men.
Even in 2011, the year after Mr. Obama called for passage of the Paycheck Fairness Act, women on the White House staff made 82 percent of male staffers' wages. The White House put more experienced men into senior positions, skewing the average. If Mr. Obama can't pay women the same as men in his own White House, with countless competent women willing to work there, why should he expect employers to do so in their businesses?
The Paycheck Fairness Act would require practically all employers to give the government information on workers' pay, by race and sex, with the goal of equalizing wages of men and women in different job classifications. This would represent a substantial intrusion of government into wage-setting and would discourage hiring.
And hiring is what the economy needs. On Friday, the Labor Department reported that the economy created only 115,000 jobs, below expectations. The unemployment rate fell to 8.1 percent because more discouraged Americans stopped looking for work. The labor force participation rate declined to 63.6 percent, equal to December 1981, when there were almost no women leaders in business, law, and government. For women's sake, we need more hiring, not more red tape.