Equal Pay – Talking Points

According to  Center for Policy Alternatives, Millions of women and people of color continue to suffer wage discrimination.
Today, according to the U.S. Census Bureau, women working full-time throughout the year earn 76¢ for every dollar earned by men. African-American women earn 67¢ and Latinas earn 54¢ for every dollar paid to white male workers. Men of color also experience wage discrimination, with African-American men earning 79¢ and Latinos earning only 63¢ for every dollar paid to their white male counterparts.1

The gender wage gap alone results in an average annual loss of more than $4,000 per American family.2
If married women were paid the same as men doing comparable work, family incomes would rise and family poverty rates would fall. If single working mothers earned as much as men doing comparable work, their family poverty rates would be cut in half.3 Moreover, lower lifetime earnings translate into less savings and lower pensions during retirement. Reductions in poverty rates would also reduce the need for government expenditures on assistance programs like the Earned Income Tax Credit and food stamps.

The wage gap is the result of both discrimination and the concentration of women and people of color in a narrow range of jobs that are undervalued and underpaid.
Although the wage gap can be partially explained by differences in education, experience and/or time in the workforce, a significant portion cannot be attributed to any of these factors and is the result of discrimination. In recent years, Home Depot and Publix Supermarkets each agreed to pay more than $80 million to settle lawsuits based on sex discrimination. In 2000, Coca-Cola settled a wage discrimination lawsuit brought by African-American workers for more than $190 million. Further, more than half of all women workers hold sales, clerical, service or caregiving jobs (child care, elder care, and nursing). These professions, held mainly by women, pay less than equivalent jobs held by men.

Existing laws are hard to enforce and do not address the problem of occupations that are undervalued because they are dominated by women or people of color.
Federal and state equal pay laws have been in effect for decades, yet wage discrimination continues. Not only are these laws poorly enforced, but they do not apply to the problem of unequal pay for equivalent work in different jobs.

States can enact legislation that strengthens enforcement of existing laws and creates a means to identify and address the causes of unequal pay.
One option, the Equal Pay Remedies and Enforcement Act, enhances existing laws and establishes a multi-sector Equal Pay Commission to study and make recommendations about the extent, causes and consequences of wage disparities. The Commission provides the research needed to craft state-specific policies.

States can also enact legislation requiring equal pay for equivalent jobs.
Another option, the Fair Pay Act, prohibits pay differentials between women and men and between minority and non-minority workers in jobs that are equal or that, though dissimilar, are nevertheless equivalent in their overall composite of skills, effort, responsibility and working conditions. Exceptions are made for differentials based on bona fide seniority, merit or other non-discriminatory factors.

States have been leaders in closing the wage gap for over two decades.
States began taking action on equal pay in 1982, when Minnesota first implemented equal pay for all public sector employees. States continue to be the source of innovative solutions for solving the wage gap. In the last five years, New Hampshirehas established reporting requirements and enforcement procedures to ensure fair pay; Vermont, West Virginiaand Wyominghave passed bills requiring pay equity studies; and the Maine Department of Labor promulgated rules to enforce existing equal pay laws in the state.

It is possible to compare different jobs within an organization to determine equivalent work.
For several decades American employers have used job evaluation studies to set pay and rank for different jobs within a company, often taking into consideration factors such as skill, effort, responsibility and working conditions. In fact, two out of three workers are employed by businesses that use some form of job evaluation. The federal government’s job evaluation system, covering nearly 2 million employees, has been in use for over 70 years.

Equal pay will not bust the budgets of businesses or governments.
Pay adjustments tend to be modest, and are phased in over a period of years. In Minnesota, where equal pay legislation was implemented for public sector employees over a four-year period, the cost was only 3.7 percent of the state’s payroll budget. In the state of Washington, equal pay for state employees was achieved at a cost of 2.6 percent of personnel costs, implemented over an eight-year period.

Equal pay is good business and can boost the economy.
One survey found that businesses cited the elimination of wage discrimination between different jobs as “good business,” and that equal pay is consistent with remaining competitive.4 Furthermore, raising wages for women and people of color increases their purchasing power, which strengthens the economy. As working families continue to face economic hardship resulting from the recession, it is critical that women and people of color receive fair wages.

Endnotes

1 Using 2001 annual earnings from the U.S. Census Bureau (Current Population Reports, Annual Demographic Supplements--Historical Income Tables, P-38 Series).
2AFL-CIO & Institute for Women’s Policy Research, “Equal Pay for Working Families: National and State Data on the Pay Gap and its Costs,” Washington, DC, (1999).
3 Ibid.
4 National Committee on Pay Equity, “Questions and Answers on Pay Equity” (2000).

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