Since 1963, it has been illegal to discriminate in the workplace on the basis of sex. But politicians continue to insist that discrimination remains rampant and government must act to protect American women.
Last week, speaking to an audience of women in New Mexico, Barack Obama repeated the often cited but seldom analyzed statistic that “women still earn only 77 cents for every dollar earned by men.” This figure is based on Department of Labor data that compares the median wages of a full-time working woman to the wages of a full-time working man. Yes, the woman’s wages are regularly about three quarters of the man’s. Yet that tells us little about discrimination, since it doesn’t compare workers with similar jobs, duties, years of experience, or education. When these factors are taken into account, the wage gap shrinks considerably. Even a report by the liberal feminist group the American Association of University Women acknowledged that personal choices create most of the wage gap.
But explaining that the free choices women make concerning work — not systemic discrimination — is responsible for pay differential won’t help Sen. Obama win over embittered Hillary Clinton supporters. Instead, Sen. Obama locked arms rhetorically with his feminist sisters, lamenting that “In 2008, you’d think that Washington would be united in its determination to fight for equal pay.”
According to Obama “fighting for equal pay” means supporting the “Lilly Ledbetter Fair Pay Restoration Act,” legislation that changes the statute of limitations for filing claims against employers. It would open companies to lawsuits based on decades-old grievances. This effort was conceived to reverse a Supreme Court ruling (Ledbetter v. Goodyear Tire & Rubber Co.) by changing existing law that requires employees to take action within 180 days of a decision about compensation. Under Ledbetter, employees could sue within 180 days of receiving any check related to such a decision.
Under this new regime, employers would have to disprove discrimination even when the employees involved are long gone and their memories faded. This longer period wouldn’t stop discrimination today but would open the floodgates for fee-hungry lawyers to root around for old grievances.
Balance in employment law is critical. The right of employees to seek redress does not outweigh the right of employers to be free from costly, frivolous litigation. Perhaps worse, increased expense for employers harms workers, both current and prospective, through lower wages and slower job growth. If Sen. Obama understands this basic economic truth, he has yet to produce any evidence of that insight.
Unfortunately, the Fair Pair Restoration Act isn’t the only flawed proposal on the horizon. Sen. Clinton champions the “Paycheck Fairness Act,” which would give Washington bureaucrats more power to oversee how wages are determined. In the name of ferreting out sex discrimination, this policy would discourage the workplace flexibility that has helped so many women balance work and family responsibilities. Companies will no longer offer a variety of work situations and compensation packages if doing so courts litigation.
It should be no surprise that men and women, on average, have different earnings. Pay is only one factor among many that people consider when choosing a job. It may frustrate the National Organization for Women, but these sex differences won’t go away so long as men and women have different priorities.
If Barack Obama really wants to embody “change,” he should find a new way to appeal to Hillary Clinton’s supporters.