To make the case for the twice-stalled election-year sop known as the Paycheck Fairness Act, President Obama is again trotting out the factoid that the average working American woman earns 77 cents for every dollar her male counterpart earns. “Some commentators are out there saying the payment gap doesn’t exist,” he said at a rally Tuesday to mark “Equal Pay Day.” “But it’s not a myth, it’s math.”
The real myth, which the president and congressional Democrats continue quite deliberately to spread, is the implication that women working alongside men at the same jobs are paid one-quarter less. What the commentators Obama mentioned are actually saying is that the president’s favored statistic is highly misleading. Labor Department data do show that the median earnings of all women who work full time (35 hours a week or more) are 77 percent of the median earnings of all full-time male workers, but this is math used to perpetuate a myth.
As the president surely understands — and his economic advisers have admitted — most of this wage gap is due to the fact that women work fewer hours than men (if you compare men and women who work 40 hours a week, the gap narrows to 13 percent); they take more time off from their careers; and they enter less-lucrative fields. Studies that correct for these factors find that men make about 5 to 7 percent more than women for the same work.
Discrimination in the workplace may explain part of this remaining difference, but the behavior of individual employers is not what accounts for most of the “pay gap” Obama cites, and the provisions in the Paycheck Fairness Act that crack down on those employers will not do much to eliminate it.
The proposed bill would amend the 1963 Equal Pay Act to require businesses to report detailed information on pay by sex, race, and national origin to the Equal Employment Opportunity Commission, so that it can rectify perceived inequities. In addition to being an unwarranted intrusion into the labor market, this would discourage employers from offering the kinds of flexible compensation packages — e.g., less pay in exchange for reduced hours — that are often attractive to women, for fear that they will make themselves liable to lawsuits.
Trial lawyers, not women, would benefit from the bill: It would require employees to opt out of rather than into class-action discrimination lawsuits and would allow for punitive damages to be paid out on top of back pay.
The president is betting that “equal pay for equal work” will be a winning campaign issue. But his proposal — extra work for employers and extra pay for trial lawyers — should be a loser.