Pay Equity

PAY EQUITY: POLICIES AND POLITICS

WHY IS THERE A PAY GAP?

PAY GAPS AND EMPLOYER DISCRIMINATION

TRENDS TOWARD PAY EQUITY

THE FUTURE OF PAY EQUITY

BIBLIOGRAPHY

Pay equity is a social policy that seeks to compensate workers on the basis of the skill, required effort, responsibility, and working conditions of their jobs, rather than the gender, race, or ethnicity of the worker, or the gender and racial/ethnic composition of all workers in a particular job. Pay equity advocates point to evidence of persistent earnings inequality between men and women, and between whites and people of color, to justify the implementation of pay equity policies. Wage inequalities between men and women (called the “gender pay gap”) and between whites and racial/ethnic minority groups (the “racial pay gap”) are substantial and have persisted over time, despite some decline since the 1970s. Gender gaps within racial/ethnic groups are presented for three points in time in Table 1, with the figures representing women’s earnings as a percentage of men’s earnings.

Among full-time, year-round workers, white women earned 58 percent of white men’s earnings in 1980. This increased to 71 percent in 2003. The gender gap among blacks and Hispanics exhibit a similar trend. Black women earned 74 percent of black male earnings in 1980, but by 2003 this had increased to 94 percent. Hispanic women earned 68 percent of Hispanic men’s earnings in 1980 and 85 percent in 2003. Thus, while the gap is closing, women still earn less than men within their racial group.

PAY EQUITY: POLICIES AND POLITICS

Given such unequal pay by gender, pay equity (also known as comparable worth) emerged in the 1980s as one legal remedy. The 1963 Equal Pay Act (EPA) made it illegal to pay different wages to men and women who perform the same job. However, men and women often work in different jobs that have different pay scales, even if they involve the same level of skill, effort, responsibility, and working conditions. Pay equity policies seek equal pay for work of equal value. To do this, employers must evaluate jobs along these objective criteria and pay objectively similar jobs the same wage. While developing and applying objective criteria for job evaluation are complex and arduous tasks, the pay equity political movement successfully convinced several states to pass laws requiring pay equity in the public sector. However, employers in the private sector are exempt from these laws, and U.S. courts have consistently refused to apply EPA legislation to private sector employers, accepting the argument that these gender and racial pay gaps are due to differing “market wages” for workers beyond the employer’s control (and therefore responsibility). In addition, some economists argue that pay equity would reduce economic efficiency and women’s employment opportunities. In general, neoclassical economists argue that any job evaluation process is subjective and prone to bias; they propose instead that any discriminatory gender pay gaps will be eroded by competitive market processes.

In comparison to other policies that aim to mitigate gender and racial pay gaps, such as the EPA or affirmative action, pay equity is fundamentally a more radical policy. The EPA seeks to eliminate gender and racial pay disparities within the same jobs, while affirmative action seeks to move women and racial minorities into more highly rewarded jobs and thereby reduce overall gender and racial pay gaps. In contrast, pay equity challenges the devaluation of certain kinds of work because it is associated with women or racial minorities. Pay equity advocates argue that white women and people of color who are in different jobs than white men should not be paid less if the job they perform is similar in its skill and educational requirements, its job tasks, and its responsibilities.

WHY IS THERE A PAY GAP?

Clearly, men earn more than women but overall pay gaps hide the various ways that such earnings inequality is created. One mechanism behind pay inequality is the segregation of men and women, and of racial/ethnic groups, into different jobs. Men and women continue to work in different occupations, as do whites and people of color. White men are most likely to be either managers or professionals, while African-American men tend to be in unskilled laborer occupations. Both white and African-American women are most likely to be in administrative support occupations, but black women are almost twice as likely to be in service occupations. (McKinnon 2003). Taking for example the hierarchy in the medical field, whereas only 31 percent of surgeons in 2003 were women, 93 percent of nurses were women. As well, whereas only 17 percent of surgeons were African-American, 31 percent were of medical technicians. When the kinds of jobs individuals hold are held constant, the pay gap decreases dramatically and when men and women are working in the same job the pay gap between is significantly smaller. Thus, much of this overall gap is accounted for by the segregation of men and women into different jobs. Men and women are not equally represented in all occupations, and the occupations where women are overrepresented tend to pay less than occupations where men predominate. Similarly, researchers have found that pay gaps vary across organizations. That is, some organizations pay more equal wages while others pay less equal wages to men and women. Researchers find that this occurs, in part, due to differing organizational policies on setting pay scales, such as having objective criteria for pay and promotions.

Another crucial explanation of women’s lower earnings is that women disproportionately work part-time jobs and have lower labor-force participation rates. The overall gaps reported in Table 1 are only for full-time, year-round workers, and thus exclude many women workers. When part-time workers are included, in 2003, white women’s earnings relative to white men’s drops to 46 percent. For black women in 2003, their earnings relative to black men’s drops to 70 percent, and for Hispanic women it drops to 56 percent. The major reason women work part-time so much more than men is because they bear the burden of family expectations. That is, women are expected to raise children and perform the majority of the housework, leading to what Arlie Hochschild has termed a “double shift” for working women, where they have to work one shift at a job and another shift doing housework. These demands lead some women to opt out of the labor force, while many others must work part-time. However, both of these options are most common among married women with employed husbands. These women can afford to reduce their employment to reallocate more time to unpaid caring work.

In earlier decades, part of the gender and racial pay gaps were due to the lower educational attainment of white women and people of color, compared with white men. However, these educational differences have lessened. That wage gaps persist despite this lessening implies that increased education for minority groups will not eliminate pay inequity. Moreover, when the pay gaps are broken down by education, they remain very similar to the overall gap; Irene Padavic and Barbara Reskin have shown that, at every level of education, men consistently outearn women with similar educational degrees.

PAY GAPS AND EMPLOYER DISCRIMINATION

Even when occupational segregation and differences in human capital are accounted for, men continue to earn more than women. This remaining gap may be explained by employer discrimination. A range of discriminatory mechanisms, both overt and unconscious, are used by employers to maintain earnings inequality. Sometimes employers assume that women are less productive (often because they assume women are distracted by family responsibilities), and they therefore do not hire or do not promote women into higher-paying jobs. Researchers have also documented the impact of preference for members of one’s own social group on the hiring of women. Men are often responsible for hiring employees, and tend to be more comfortable around other men than they are around women. This leads them to prefer hiring men over equally qualified women. In addition, employers often hold stereotypical beliefs about what kinds of work men and women are supposed to do, leading them to hire women for some jobs andmenforothers. Allofthese processes lead to segregating men and women into different jobs. Employers also reward jobs that men and women are in differently. Through often unrecognized beliefs about the value of work women perform, employers reward the jobs women are segregated into less than the jobs into which men are segregated.

TRENDS TOWARD PAY EQUITY

The pay gap between men and women was smaller in 2003 than it was in 1980. But the pace at which this gap has declined has slowed since 1990. Social scientists have noted that much of these actual gains are a result of men’s relative decline in earnings in the 1980s, when manufacturing jobs were moved overseas (Padavic and Reskin 2002). This helps explain why the decline from 1980 to 1990 was greater than the decline from 1990 to 2003.

In contrast to the slow erasure of the gender pay gap, the racial pay gap has actually grown, except for the gap between black and white women. Just as the trend in the pay gap between men and women has largely stemmed from men’s declining earnings due to the loss of manufacturing jobs, so has the race gap been affected by the decline in manufacturing jobs. Scholars have noted that as manufacturing jobs are lost, less skilled workers have a harder time finding a job. Because people of color are stuck in occupations requiring less skill, their earnings decline when jobs for less-skilled workers decline.

THE FUTURE OF PAY EQUITY

Pay equity movements have attempted to eliminate the employer discrimination that leads to men and women in the same jobs being paid different wages, as well as the employer discrimination that leads to men and women in similarly valuable jobs being paid unequal wages. A crucial practical problem in pay equity policies is determining the value of skills. What skills, job tasks, and responsibilities should be considered comparable? Nevertheless, pay equity does address the inequalities produced through job segregation that policies addressing only unequal pay for the same work ignore. If pay were to equalize across the exact same occupations, it would not address the underlying causes of pay inequality: occupational segregation. While pay equity has often failed as a practical policy, it begins to address these underlying causes of pay inequality, whereas equal pay for the same work cannot address this structural inequality.

SEE ALSO Affirmative Action

BIBLIOGRAPHY

England, Paula. 1992. Comparable Worth: Theories and Evidence. Hawthorne, NY: Aldine de Gruyter.

Hochschild, Arlie. 1997. The Time Bind: When Work Becomes Home and Home Becomes Work. New York: Henry Holt.

McKinnon, Jesse. 2003. “The Black Population in the United States: 2002.” Current Population Reports, Series P-20-541. Washington, DC: U.S. Census Bureau.

Nelson, Robert, and William Bridges. 1999. Legalizing Gender Inequality: Courts, Markets, and Unequal Pay for Women in America. New York: Cambridge University Press.

Padavic, Irene, and Barbara Reskin. 2002. Women and Men at Work, 2nd ed. Thousand Oaks, CA: Pine Forge Press.

Reskin, Barbara. 2001. The Realities of Affirmative Action in Employment. Washington, D.C.: American Sociological Association.

Treiman, Donald, and Heidi Hartmann, eds. 1981. Women, Work and Wages: Equal Pay for Jobs of Equal Value. Washington, DC: National Academy Press.

Dustin Avent-Holt

Michelle J. Budig