[Joint House and Senate Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 111-170
EQUAL PAY FOR EQUAL WORK? NEW EVIDENCE
ON THE PERSISTENCE OF THE GENDER
PAY GAP
=======================================================================
HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
APRIL 28, 2009
__________
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JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
HOUSE OF REPRESENTATIVES SENATE
Carolyn B. Maloney, New York, Chair Charles E. Schumer, New York, Vice
Maurice D. Hinchey, New York Chairman
Baron P. Hill, Indiana Edward M. Kennedy, Massachusetts
Loretta Sanchez, California Jeff Bingaman, New Mexico
Elijah E. Cummings, Maryland Amy Klobuchar, Minnesota
Vic Snyder, Arkansas Robert P. Casey, Jr., Pennsylvania
Kevin Brady, Texas Jim Webb, Virginia
Ron Paul, Texas Sam Brownback, Kansas, Ranking
Michael Burgess, M.D., Texas Minority
John Campbell, California Jim DeMint, South Carolina
James E. Risch, Idaho
Robert F. Bennett, Utah
Nan Gibson, Executive Director
Jeff Schlagenhauf, Minority Staff Director
Christopher Frenze, House Republican Staff Director
C O N T E N T S
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Opening Statements of Members
Hon. Carolyn B. Maloney, Chair, a U.S. Representative from New
York........................................................... 1
Hon. Kevin Brady, a U.S. Representative from Texas............... 3
Hon. Elijah E. Cummings, a U.S. Representative from Maryland..... 4
Witnesses
Statement of Andrew Sherrill, Director, Education, Workforce, and
Income, Security Issues, United States Government
Accountability Office.......................................... 6
Statement of Dr. Randy Albelda, Professor of Economics,
University of Massachusetts, Boston, MA........................ 7
Statement of Lisa Maatz, Director of Public Policy and Government
Relations, American Association of University Women............ 9
Statement of Diana Furchtgott-Roth, Director, Center for
Employment Policy, Senior Fellow, Hudson Institute............. 11
Submissions for the Record
Prepared statement of Representative Carolyn B. Maloney.......... 32
Prepared statement of Representative Kevin Brady................. 33
Prepared statement of Representative Elijah E. Cummings.......... 33
Prepared statement of Andrew Sherrill............................ 35
Prepared statement of Randy Albelda.............................. 46
Prepared statement of Lisa Maatz................................. 54
Prepared statement of Diana Furchtgott-Roth...................... 59
EQUAL PAY FOR EQUAL WORK? NEW
EVIDENCE ON THE PERSISTENCE OF THE
GENDER PAY GAP
----------
TUESDAY, APRIL 28, 2009
Congress of the United States,
Joint Economic Committee,
Washington, DC.
The committee met at 10:05 a.m., in Room 2172, Rayburn
House Office Building, Hon. Carolyn B. Maloney (Chair),
presiding.
Representatives present: Maloney, Hinchey, Cummings, and
Brady.
Staff present: Nan Gibson, Colleen Healy, Elisabeth Jacobs,
Justin Ungson, Andrew Wilson, Rachel Greszler, Lydia Mashburn,
Jeff Schlagenhauf, and Chris Frenze.
OPENING STATEMENT OF HON. CAROLYN B. MALONEY, CHAIR, A U.S.
REPRESENTATIVE FROM NEW YORK
Chair Maloney. The meeting will come to order. And I
welcome our ranking member and other members of the committee,
and of course our wonderful panelists. I have to acknowledge
that Ms. Maatz used to work with me when she was a fellow here.
So it is wonderful to have this occasion to have you back
before us. The Chair recognizes herself for an opening
statement, and will be followed by the ranking member.
Good morning. I want to welcome our distinguished panel of
witnesses and thank all of you for your testimony today. This
hearing is timely because today is Equal Pay Day, the day that
symbolizes how far into the year that the average full-time
working woman must work to earn as much as her male counterpart
earned the previous year.
We have made a great deal of progress in closing the gap
between men and women's wages since President Kennedy signed
the Equal Pay Act in 1963, but as the saying goes, women's work
is never done. Women earn just $0.78 on the dollar compared to
men doing the exact same work. For minority women, the wage gap
is even larger. African American women earn only $0.62 for
every dollar earned by white men, and Hispanic women fare
worse, earning only $0.53.
The report released by the GAO provides additional evidence
of the persistence of the gender pay gap, but the workplace
setting is particularly troubling. The Federal Government
should be a model employer, but today's report tells us we have
considerable work left to do to live up to that promise. The
GAO finds that an $0.11 gap remains between men and women's pay
in the Federal workforce, even after accounting for measurable
differences like education, occupation, and work experience.
The report also finds that the total pay gap shrank between
1988 and 2007 from $0.28 on the dollar to $0.11 on the dollar.
However, the share of the gap that can't be explained has
remained remarkably constant at $0.07, and you can see that
right on the chart over there. Those $0.07 may be explained by
discrimination against female Federal employees. The pay gap in
the Federal workforce that GAO found reflects troubling pay
disparity issues in the broader labor market.
I am proud to have successfully fought for equal
compensation after September 11th. The compensation plan for
victims' families, as it originally was proposed, was based on
outdated government formulas that assumed that women victims
would have worked for less of their lives than their male
counterparts. In effect, the proposed system of compensation
was providing less for the family of women victims simply
because they were families of women.
This I think is very sobering and outrageous, and a
reminder of how institutionalized gender discrimination can be,
and that there are many battles yet to be won. Of course, along
with many like-minded women and men, we had this changed so
that the Victims Compensation Board gave the same to the
families of both men and women. But we constantly have to raise
the issue because many people just naturally assume that women
should be treated in a lesser way.
Women are more productive and better educated than they
have ever been, but their pay hasn't yet caught up. The pay gap
affects women at all income levels and across a wide range of
occupations, and it widens as women grow older.
Equal pay is not just a woman's issue, it is a family
issue. The impact of the wage gap is particularly painful in
our current economic downturn, as families struggle to make
ends meet in the face of stagnant wages and job losses.
Estimates of how much women stand to lose over their
lifetime due to unequal pay practices range from $700,000 for a
high school graduate to $2 million for doctors and lawyers,
according to the WAGE Project. Every dollar counts. So now,
more than ever, families should not be short-changed by gender
pay differentials.
The GAO previously has found that women with children earn
about 2.5 percent less than women without children, while men
with children enjoy an earnings boost of 2.1 percent. So in
other words, if you become a father you get a raise, if you
become a mother you get a demotion.
While some of the gender pay gap can be explained by
differences in men's and women's occupations and leave
patterns, study after study show that a substantial portion of
the gap remains unexplained. Women continue to bump up against
everything from subtle biases to egregious acts of
discrimination relating to gender stereotypes about hiring, pay
raises, promotions, pregnancy, and care-giving
responsibilities.
The Lilly Ledbetter bill was an important start, but
additional legislation is necessary to close the loopholes in
the Equal Pay Act that allow discrimination to persist. I am
proud to be a cosponsor of the Paycheck Fairness Act, which
passed the House of Representatives earlier this session, and I
hope the Senate will soon take action.
Better work-life balance policies would allow both mothers
and fathers to continue to support their families and develop
their careers. By ensuring that women aren't forced to start
all over again in new jobs, paid leave policies can help keep
women on an upward track in their careers, protecting their
earnings. The Federal Employees Paid Parental Leave Act, which
I have sponsored, would do just that.
By recognizing the persistence of the problem and taking
action, we have the opportunity to make next year's Equal Pay
Day a celebration of progress, and we hope that will happen.
[The prepared statement of Representative Maloney appears
in the Submissions for the Record on page 32.]
And I look forward to the testimony of the witnesses and
recognize my colleague, the ranking member, for his opening
statement.
OPENING STATEMENT OF HON. KEVIN BRADY, A U.S. REPRESENTATIVE
FROM TEXAS
Representative Brady. Thank you, Madam Chairman. I think
this is an important issue to all of us. I am pleased to join
in welcoming the panel of witnesses before the committee this
morning.
A key focus of this hearing, as noted, is the new
Government Accountability Office report on women's pay in the
Federal workforce. According to the new GAO report, the
difference between men and women's average salaries declined
significantly in the Federal workforce between 1988 and last
year. The study notes that the pay gap narrowed as men and
women in the Federal workforce increasingly shared similar
characteristics in terms of the jobs they held, their
educational achievement, and their levels of experience.
Between 1988 and 2007, the gap between men and women's pay
had declined from $0.28 on the dollar to $0.11. GAO reports
some or all of the remaining $0.07 of the remaining gap might
be explained by factors for which we lack data or are difficult
to measure, such as work experience outside the Federal
Government. GAO was careful to state that its findings do not
prove or disprove pay discrimination.
The trends noted in the GAO report are similar to those
observed in the overall economy in recent decades. The pay
differential of men and women, once adjusted for occupation,
education, experience, hours, and leave, has fallen over time.
Although some differences remain, men and women with similar
characteristics working the same kind of occupations have
comparable pay.
The progress women have made over the years is reflected in
a number of ways. Between 1970 and 2007, the women's labor
force participation rate increased from 43 percent to 59
percent. Women now receive a majority of undergraduate and
graduate degrees. And in 2007, women held over half the jobs in
well-paid management and professional occupations.
However, as Diana Furchtgott-Roth notes in her testimony
this morning, higher marginal tax rates could effectively raise
taxes on married women by increasing the marriage penalty for
some two earner couples. I am also very concerned, given the
grim fiscal outlook, the application of these higher tax rates
will eventually be much broader than those proposed by the
administration. Emerging policies of much higher taxes and
government spending, by undermining economic and unemployment
growth, will harm both women and men in the workforce.
I would yield back.
[The prepared statement of Representative Brady appears in
the Submissions for the Record on page 33.]
Chair Maloney. The gentleman is recognized for his opening
statement, Mr. Cummings.
OPENING STATEMENT OF HON. ELIJAH E. CUMMINGS, A U.S.
REPRESENTATIVE FROM MARYLAND
Representative Cummings. Thank you very much, Madam
Chairlady. I want to thank you, Madam Chair. You have been a
tireless advocate for gender equality in the workforce. And
especially, today on Equal Pay Day, it should not go unnoticed.
I hope today's hearing helps shed light on the continuing
practices that prevent full equality in the workplace, and I
look forward to working with you to eliminate such wrongdoing.
For the past 3 months, the Bureau of Labor Statistics has
reported nearly 600,000 jobs lost each month. I suspect next
Friday we will hear similarly staggering figures. With so many
of our families led by a single female parent, I am deeply
disappointed that our mothers and sisters have to face not only
the rising tide of unemployment, but also what amounts to a
gender tax.
As we have heard in the past, there is a component of the
gap between wages of similarly situated male and female
employees which no variable can explain in detailed analysis,
and which many attribute to discrimination. I am especially
disheartened to see that the wage disparity widens in the cases
of women with advanced degrees. After putting in the years and
years of effort to earn such degrees, many women still earn a
wage that is lower than equally educated male counterparts,
which belittles the time and effort required to earn these
credentials.
Equally saddening are the statistics that show women who
are also minorities face race discrimination on top of gender
bias. The persistence of any element of unequal treatment that
prevents any American from achieving the full measure of her
potential, while enjoying the full benefits of the rights
guaranteed by our Constitution, is simply unacceptable.
Now, importantly, we face the situation in which many
assume that given the wide participation of women in the
workplace, equality has been achieved. Frankly, on many fronts
many Americans assume that discrimination is a thing of the
past.
Today's hearing is an important reminder that, sadly, we
cannot limit our vigilance or expect that discrimination is
always and only characterized by actions that are readily
apparent. That is why we need to provide those who have been
harmed with requisite remedies, strengthen penalties for
discrimination, and increase enforcement of these offenses.
For that reason, I was extremely pleased to join so many of
my colleagues in cosponsoring the Lilly Ledbetter Fair Pay Act
of 2009. This legislation is a perfect example of what can be
achieved by collaboration between President Obama and this
Congress. The Fair Pay Act starts us down the road to eventual
elimination of the gender wage disparity, and the remedies
provided in the bill are the first steps towards this goal. It
is my sincere hope that the additional protections and remedies
found in the Paycheck Fairness Act are also signed into law
during this Congress.
The witnesses before us today have written forcefully and
articulately on the role of gender in the labor market. As a
result, I look forward to a frank discussion about what can be
done to address the harms done and to prevent further harm
moving forward.
With that, Madam Chair, I yield back.
[The prepared statement of Representative Cummings appears
in the Submissions for the Record on page 33.]
Chair Maloney. Thank you very much. Now I would like to
introduce our distinguished panel. Dr. Andrew Sherrill is a
Director of Education, Workforce and Income Security Issues at
the U.S. Government Accountability Office. He oversees GAO's
work on worker protection and workforce development issues, and
has worked at GAO for 19 years. Mr. Sherrill has led GAO teams
in producing reports to Congress on topics including the gender
pay gap, offshoring of services, and welfare reform. He
received his master's degree and Ph.D. in philosophy from the
University of Texas at Austin, and also attended the
university's LBJ School of Public Service.
Dr. Randy Albelda is a Professor of Economics and Senior
Research Associate at the Center for Social Policy at the
University of Massachusetts Boston. Her research and teaching
covers a broad range of economic policies affecting women,
especially low income women and families. She has written
dozens of articles and books on women's economic status. She is
the co-author of the books Unlevel Playing Fields:
Understanding Wage Inequality and Wage Discrimination; and
Glass Ceilings and Bottomless Pits: Women's Work, Women's
Poverty.
And I am very thrilled that Lisa Maatz, my good friend, has
served as the Director of Public Policy and Government
Relations at the American Association of University Women since
2003. For over a year, she also served as the Interim Director
of the AAUW Legal Advocacy Fund. Since 1881, AAUW has been the
Nation's leading voice promoting equity and education for all
women and girls. Ms. Maatz has also worked for the NOW Legal
Defense Education Fund and Older Women's League, and was a
legislative fellow in my office. She is a Phi Beta Kappa
graduate of Ohio University, has two master's degrees from Ohio
State, and holds an adjunct appointment with the Women and
Politics Institute at American University, and a mayoral
appointment to the Washington D.C. Commission on Women.
Dr. Diana Furchtgott-Roth is a Senior Fellow at Hudson
Institute and directs the Center for Employment Policy. From
February 2003 to April 2005, she was Chief Economist of the
U.S. Department of Labor. Previously, she served as Chief of
Staff at the President's Council of Economic Advisers. Ms. Roth
was Assistant to the President and Resident Fellow at the
American Enterprise Institute from 1993 to 2001. And Ms.
Furchtgott-Roth received her B.A. in economics from Swarthmore
College, and her master's in philosophy and economics from
Oxford University.
I thank all of you for coming today. And Mr. Sherrill,
please proceed with your testimony. And all of you will be
given 5 minutes to summarize your testimony so that there is
plenty of time for questions. Again thank you for your work and
thank you for being here today.
STATEMENT OF ANDREW SHERRILL, DIRECTOR, EDUCATION, WORKFORCE,
AND INCOME, SECURITY ISSUES, UNITED STATES GOVERNMENT
ACCOUNTABILITY OFFICE
Mr. Sherrill. Chair Maloney and members of the committee, I
am pleased to be here today, on Equal Pay Day, to discuss the
gender pay gap in the Federal workforce. Previous research
shows that despite improvements over time, a pay gap remains
between men and women in both the U.S. workforce as a whole and
within the Federal Government.
My statement today is based on the report that has been
released titled Women's Pay: Gender Pay Gap in the Federal
Workforce Narrows as Differences in Occupation, Education, and
Experience Diminish. To prepare the report, we used data from
the Office of Personnel Management's Central Personnel Data
File. This is a database that contains salary and employment-
related information for the majority of civilian employees in
the executive branch. We used this data to perform two kinds of
analysis, first a cross-sectional analysis that took snapshots
of the Federal workforce in 1988, 1998, and 2007, to examine
differences in pay between men and women in the workforce as a
whole over a 20-year period. For the second analysis, we
tracked a group or cohort of employees who entered the
workforce in 1988 to examine differences in pay and the effects
of breaks in service and unpaid leave over a 20-year period.
My statement today focuses on the following question: To
what extent has the pay gap between men and women in the
Federal workforce changed over the past 20 years, and what
factors account for the gap?
Using our cross-sectional analysis, we found that the pay
gap, the difference between men and women's average pay before
taking into account any explanatory factors, declined over the
20-year period. As you can see from our multi-colored chart
here, specifically the overall size of each of the three bars,
the pay gap declined from $0.28 on the dollar in 1988 to $0.19
in 1998, and further to $0.11 in 2007. For each of the 3 years,
all but about $0.07 of the gap, the white portion of each bar,
can be explained by differences in measurable factors between
men and women. Differences in occupation--the green part of
each bar--was the major explanatory factor, followed to a
lesser extent by differences in education levels--the orange
part--and years of Federal experience--the purple part. The
yellow portion of the bar represents differences in all other
characteristics we measured.
The pay gap diminished over time largely because men and
women in the Federal workforce are more alike in these
characteristics than they were in past years. For example, with
regard to occupation, the pay gap decreased in part because
clerical, professional, and administrative occupational
categories became more integrated by gender over time. In
particular, changes in the government's clerical workforce
explain a large reduction in the pay gap.
In 1988, the clerical workforce was among the lowest paid.
It accounted for 38 percent of all female Federal workers. From
1988 to 2007, the clerical workforce shrank in size by about 61
percent, a big drop, and also became more integrated, with the
proportion of women decreasing from 85 percent to 69 percent.
The gap also decreased as men and women in the Federal
workforce became increasingly similar in their levels of
education. For example, in 1988, the percentage of men that
held a bachelor's degree or higher was 17 percentage points
higher than for women, compared with 6 percentage points higher
by 2007.
Finally, men and women in the Federal Government became
increasingly similar in their levels of Federal experience. On
average, men in 1988 had nearly 4 more years of Federal
experience than women, whereas by 2007 women on average had
slightly more Federal experience than men.
In each of the 3 years we examined, our model cannot
account for about $0.07 of the pay gap. We cannot be sure what
accounts for this portion, but it could be due to other factors
which may be difficult to measure.
It is important to note this analysis neither confirms nor
refutes the presence of discriminatory practices. For our
second analysis, which examined the cohort of employees who
entered the Federal workforce in 1988, we found that the gender
pay gap grew from $0.22 on the dollar in 1988 to $0.25 by 2007.
Again differences between men and women's characteristics that
could affect pay, especially occupation, explained a
significant portion of the pay gap. Specifically, differences
in the occupations held by men and women in the group explained
between $0.11 and $0.19 of the pay gap over the 20-year period.
We also looked at differences in the use of unpaid leave or
breaks in service. They did not contribute significantly to the
pay gap for this 1988 cohort. Women in the cohort were more
likely to take unpaid leave or have a break in service than
men, but when we did the analysis the differences in the use of
unpaid leave and breaks in service consistently explained less
than 1 percent of the pay gap for this 1988 cohort.
Madam Chair, that concludes my remarks. I would be happy to
answer any questions you or other members may have.
[The prepared statement of Andrew Sherrill appears in the
Submissions for the Record on page 35.]
Chair Maloney. Thank you, Mr. Sherrill. Dr. Albelda.
STATEMENT OF DR. RANDY ALBELDA, PROFESSOR OF ECONOMICS,
UNIVERSITY OF MASSACHUSETTS, BOSTON, MA
Ms. Albelda. Good morning and thank you for the opportunity
to testify about the persistent wage gap between men and women.
While there has been progress in reducing the pay gap between
men and women over the last several decades, it is still the
case that women on average make less than men.
In the mid-1970s, the National Organization for Women
issued $0.59 buttons. We can turn them in and pick up $0.78
buttons saying that year round full-time women workers make
$0.78 for every man's dollar.
While there are some differences in what men and women
bring to the workplace that influences the level of pay, those
differences only account for a small part of the gender gap,
which we saw not only in the Federal labor force, but we have
seen in the labor force as a whole. Women have somewhat less
work time than men, but they now have higher levels of
educational attainment. Adjusting for these differences narrows
the gap, but only a bit.
Women do tend to work in different occupations and jobs
than men do, but even when men and women work in the same
occupations, women typically earn less than men. Of the over
100 detailed occupations for which we have median earnings,
there are only six occupations out of these 100 in which
women's earnings are higher than those of men. Economists find
even when they adjust for all the factors they can possibly put
into an econometric study that might explain the differences
between men and women's pay, they still find a portion of that
wage gap unexplained by those differences. And that is that
$0.07. We find actually $0.09 on average in these studies. And
importantly, this gap, this unexplained gap, has been
persistent.
And so over time, pay equity has stalled as men and women's
experience and labor force participation rates become closer.
So why? Why is this pay gap? I would say there are three main
reasons why men earn more than women on average.
The first is some of the things that we have been talking
about today, which is workplace discrimination. And Lilly
Ledbetter's experience reminds us that workplace discrimination
is alive and well. Routinely women are not hired at all, hired
at lower wages, or not promoted over equally qualified men.
But there are two other reasons why women earn less than
men besides workplace discrimination, which have to do with, I
think, gender inequality in general. One is that women are in
different occupations than men. Men are much more likely to be
in construction and manufacturing jobs, which pay more than
female-dominated jobs with comparable skill levels such as
administrative assistants or retail sales clerk.
At the higher end, professional managerial jobs are often
sex segregated. Women predominate in the lower paying
professional jobs like teaching, nursing, and social work,
while men predominate in higher paying architecture,
engineering, and computer occupations.
But importantly, women are disproportionately employed in
what we call the care sector. The care sector are the
industries which educate our children, provide us with health
services, and take care of young children, disabled adults, and
the elderly. About 20 percent of all workers work in this care
sector, and it is one of our fastest growing sectors. And women
comprise 75 percent of all workers. Careful research has shown
that care workers, paid care workers, are not rewarded
commensurately with their skills and experience.
Thirdly, the other thing that I think helps explain the
wage gap between men and women is that family responsibilities
squeeze women's work time and preclude them from taking and
keeping jobs that make few accommodations for those
responsibilities. Jobs that require long hours often pay well
and provide a strong set of employer benefits, but employers
who employ those workers assume those workers in those jobs are
unencumbered by household and family responsibilities. Research
clearly demonstrates the existence of a mother's wage penalty.
The recession makes addressing this issue especially
important because women's earnings are a vital, if not main
component of family well-being. One-third of all households are
maintained by women. One-half of all households are married
couples. And in those households, two-thirds of wives are
employed. Furthermore, wives' earnings comprise 35 percent of
family income. In this recession, more men have lost jobs than
women have so far. As a result, even more households are more
dependent on women's earnings.
The stimulus package will help both men and women, but
differently. So it will be important to pay attention to these
differences as part of the spending oversight. Increased funds
for physical infrastructure, improved medical record keeping,
and green energy investments will likely create more jobs for
men than women. Conversely, increased funding to the States,
especially for health care and education, will reduce the
number of layoffs for women since they are more heavily
employed there.
What can we do to reduce the pay gap? I think we have to
address the three issues somewhat separately. First, addressing
workplace discrimination. Ensure that our current anti-
discrimination laws are enforced. Second, pass the Paycheck
Fairness Act. And third, I would say pass the Employee Free
Choice Act, as unions, as much as higher education if not more,
boost women's wages. They improve the likelihood that they will
have health insurance, and they provide structured mechanisms
to pursue employer discrimination.
In terms of addressing occupational sorting, increase the
minimum wage. Women predominate in low wage jobs. Improve wages
for care workers because government provides most of that money
for that employment, and target stimulus money to ensure that
women and minorities are included in physical infrastructure
projects.
Finally, address family responsibility discrimination. And
in this case we need to assure that the laws that protect
workers with caregiver's responsibility are enforced like, the
FMLA, the Family Medical Leave Act. Extend FMLA to support more
workers, and make it paid. Finally, develop legislation that
encourages employers to negotiate with employees over flexible
work arrangements.
Thank you.
[The prepared statement of Randy Albelda appears in the
Submissions for the Record on page 46.]
Chair Maloney. Thank you very much. Ms. Maatz.
STATEMENT OF LISA MAATZ, DIRECTOR OF PUBLIC POLICY AND
GOVERNMENT RELATIONS, AMERICAN ASSOCIATION OF UNIVERSITY WOMEN
Ms. Maatz. Good morning.
Chair Maloney. Good morning.
Ms. Maatz. Wonderful to be here, Chairwoman Maloney and
members of the committee. I am very happy to be here, and thank
you for the opportunity to testify about the critical issue of
pay equity.
AAUW has a proud 127-year history of breaking through
barriers for women and girls, and in fact we released our first
report on pay equity way back in 1913. Pay equity is still
particularly relevant today.
AAUW believes it is critical that in these tough economic
times that women workers, indeed all women workers, don't just
survive the economic downturn, but in fact that we continue the
march towards fair pay and workplace opportunity. Empowering
women is one investment that always pays off not only for the
women themselves, but for their families and the entire Nation.
As the recession continues, women are increasingly becoming the
sole breadwinners for their families, making pay equity not
just a matter of fairness, but the key to families making ends
meet.
According to a White House report, nearly 1.5 million jobs
saved or created by the American Recovery and Reinvestment Act
are likely to go to women. The recovery package clearly is
counting on women to play a key role in the Nation's economic
recovery and their ability to do so is increased considerably
when women's paychecks are a fair reflection of their work.
This is just one of the reasons why new legislation
strengthening pay equity laws is not only necessary, but
timely, amounting to an equity economic stimulus, if you will.
I am also pleased to talk about AAUW's research report
Behind the Pay Gap, which provides reliable evidence that sex
discrimination in the workplace continues to be a problem. AAUW
found that just 1 year out of college, women earn only 80
percent of what their male counterparts earn. Even women in the
same major and occupation earn less than their male
counterparts. Ten years after graduation, women fall further
behind, earning only 69 percent of what men earn. Even after
controlling for factors known to affect earnings, some of this
gap remains unexplained. That is after controlling for
factors--now this is quite a list, so bear with me--for factors
like major, occupation, industry, hours worked, workplace
flexibility, experience, educational attainment, GPA,
institution selectivity, age, race and ethnicity, region,
marital status, and children, even when we control for all of
those factors, a 5 percent difference in the earnings of male
and female graduates is unexplained 1 year after graduation.
Choices explain even less of the pay gap 10 years after
graduation. Controlling for a similar set of factors, including
motherhood, we found a 12 percent difference in the earnings of
male and female graduates is unexplained and attributable only
to gender.
Here is the critical take-away from AAUW's report. Women
are investing in education and increasingly entering male-
dominated fields, yet a pay gap remains that can't be explained
or accounted for completely by women's choices.
AAUW's research asked a basic but very important question.
If women made the same choices as a man, would she earn the
same pay? I am sorry to say that the answer was no. Women have
excelled at school, changed their work and family patterns,
gone into nontraditional fields, and still the pay gap remains.
It is not unreasonable to assume that discrimination plays a
role, and as a result, more needs to be done on that front as
well.
Unfortunately, women's educational gains, ironically
motivated in part by women's desire for economic security, have
not translated into equal pay for women in the workplace. In
fact, a college degree, while it does absolutely increase
women's earnings, the pay gap remains larger for college
graduates than for the population as a whole.
AAUW's research provides strong evidence that sex
discrimination in the workplace is not disappearing on its own.
While enactment of the Lilly Ledbetter Fair Pay Act was a
critical first step, the next step is for the Senate to pass
the Paycheck Fairness Act. As the Congresswoman has already
mentioned, the House already passed the bill in January, by an
even stronger vote, I might add, than the Ledbetter bill.
Passing both bills is critical to the overall goal of
achieving pay equity for all. Ledbetter was a narrow fix that
simply returned legal practices and EEOC policies to what they
were the day before the Supreme Court decision in Ledbetter,
nothing more, nothing less. The Paycheck Fairness Act is a much
needed update of the 45-year-old Equal Pay Act, closing long-
standing loopholes to prevent any discrimination.
Together these bills can help to create a climate where
wage discrimination is not tolerated, and give the
administration the enforcement tools it needs to make real
progress on pay equity.
Here is the bottom line. There is a pay gap that most
economists agree can't be explained away by women's choices no
matter how convenient, no matter how much easier it would be
for critics if that were the case. And we ignore that gap at
our peril. When women don't earn fair pay, they are not the
only ones to suffer. Their families do too.
It is also ironic and short-sighted in a nation that needs
women's labor to be competitive in a global marketplace.
Skeptics like to claim that there is no real pay gap--that
somehow it is all a product of our imaginations. Worse, these
critics prefer to blame women, especially working mothers, for
any pay disparities, saying that the pay gap is due to the
choices that women make.
But excuses are excuses and facts are facts. Policymakers
need to take a long, hard look at why the marketplace punishes
women for being mothers or, as AAUW's research has showed, for
simply their potential to be mothers, while fatherhood carries
no wage penalties and may in fact carry financial benefits.
It is time to pass the Paycheck Fairness Act, and it is
time for women's paychecks to catch up with our achievements.
Thank you, and I look forward to your questions.
[The prepared statement of Lisa Maatz appears in the
Submissions for the Record on page 54.]
Chair Maloney. Thank you. Ms. Furchtgott-Roth?
STATEMENT OF DIANA FURCHTGOTT-ROTH, DIRECTOR, CENTER FOR
EMPLOYMENT POLICY, SENIOR FELLOW, HUDSON INSTITUTE
Ms. Furchtgott-Roth. Thank you very much. Ms. Chairwoman
and members of the committee, I am honored to be invited to
testify before you today. I have followed and written about
these and related issues for many years. I am the co-author of
two books on women in the labor force, Women's Figures, and The
Feminist Dilemma: When Success Is Not Enough.
As the GAO report over here shows, women generally have
equal pay for equal work now if they have the same jobs,
responsibilities, and skills. Members of Congress are paid
identically, regardless of gender, as are many other men and
women with the same job. Two entry level cashiers in a
supermarket, one male and one female, usually are paid the
same, as are male and female first year associates of law
firms. If they believe they are underpaid, they can sue for
discrimination under current law.
The 78 percent figure comes from comparing the 2007 full-
time median annual earnings of women with men, the latest year
available from the Census Bureau. The 2007 Department of Labor
data show that women's full-time median weekly earnings are 80
percent of men. Just comparing men and women who work 40 hours
weekly, without accounting for any differences in jobs,
training, or time in the labor force yields a ratio of 87
percent.
These wage ratios are computed from aggregate government
data and don't take into account differences in education, job
title, and responsibility. When economic studies include these
major determinants of income, as the GAO study showed, the pay
gap shrinks even more.
Nevertheless, we need to do all we can to level the playing
field so that women are not discouraged by our institutions
from dropping out of the workforce. One change that has been
recently proposed has been to allow the top tax rate to rise.
This would adversely affect married women, because their
incomes are frequently secondary. It would not only discourage
marriage, but also discourage married women from working.
Take a nurse, for example, Amanda, with a taxable income of
$50,000 who wants to marry Henry, who owns an electrical supply
store and has a taxable income of $160,000. Unmarried, he is in
the 28 percent bracket and she is in the 25 percent bracket.
When they get married they will be taxed at 33 percent, rising
to 36 percent in 2011 if Congress allows taxes to rise. By
raising taxes on upper income Americans, Congress would worsen
our system's tax penalty on two-earner married couples, and
Amanda and Henry, and countless others like them, would pay a
lot more taxes married than single.
In President Obama's new budget, he outlined plans to allow
the two top tax rates to rise from 33 to 36 percent, and from
35 to 39 percent. In addition, taxpayers wouldn't receive the
full value of their deductions. Taxes would rise for singles
with taxable income over $172,000, and married couples over
$209,000.
Even if Amanda and Henry were not immediately affected by
these, these rates might well affect Amanda when she earned
more, unless, of course Amanda and Henry decide to have
children and Amanda left the workforce to care for them. Say
that Amanda's taxable income rose to $60,000, so she and Henry
had a combined income of $220,000, putting them in the new 36
percent tax bracket. But if she dropped out of work and stayed
at home to look after the children, their tax bracket would be
28 percent.
Our tax system should not make it harder for women to work.
The penalty falls most heavily on married women who have
invested in education, hoping to shatter the glass ceiling and
compete with men for managerial jobs. It does not have to be
that way. Congress could leave taxes as they are now, with a
flatter structure of taxes so that couples don't face higher
taxes upon marriage.
Labor Department data show that as the average number of
earners in the household rises so do income levels. One
characteristic of the highest earning one-fifth of couples, the
top quintile, is they have an average of two earners per
household. The middle quintile has one and a half earners per
household on average. And the lowest earning fifth has an
average of half an earner per household; in other words, more
part-time and unemployed workers. Therefore, when workers
marry, more households move into the top quintile of income
distribution.
When Congress tries to raise the taxes on top earners, then
working women are disproportionately affected, even if, like
Amanda, they do not earn very much by themselves. For Congress
to announce that taxes on the top end of the scale will rise is
an explicit attack on married working women, especially those
who own their own businesses.
Thank you very much for giving me the opportunity to appear
before you today.
[The prepared statement of Diana Furchtgott-Roth appears in
the Submissions for the Record on page 59.]
Chair Maloney. I want to thank all the panelists for their
very important testimony today.
Dr. Sherrill, last year I requested a report from GAO
regarding the enforcement of anti-discrimination policies. The
GAO recently released that report, which concluded that serious
problems exist in the enforcement of anti-discrimination
statutes and regulations within both the Equal Employment
Opportunity Commission and the Department of Labor.
Could you comment on these findings and address any changes
that have been made as a result of your report? Dr. Sherrill?
Mr. Sherrill. I would be happy to do that. We made
recommendations to both the Equal Employment Opportunity
Commission and the Department of Labor to strengthen their
enforcement strategies. We made one particular recommendation
to both agencies. We found that neither one was systematically
monitoring the charges that are filed in the area of gender pay
violations. So as a result, neither one of the agencies is
tracking these. They don't have a good sense of what are the
trends in this area. They can't tell how effective are the
enforcement strategies that they are using. And so as a result,
they don't know to what extent their resources are being well
invested. So we recommended that both of them do a better job
monitoring and tracking this.
In addition, we made other recommendations to the
Department of Labor. There are issues there with regard to
Labor. For example Labor has a certain mathematical model it
uses to select contractors to focus on for investigations, but
Labor has not assessed that model. Labor requires contractors
to self-evaluate their compensation systems, but does not have
good data and follow-up on to what extent that is happening.
The Equal Employment Opportunity Commission agreed with our
broad recommendations, so we will be monitoring how they
implement them. We also made a series of recommendations to
Labor. The Department of Labor did not take a position on our
recommendations. As part of our normal efforts, we will be
tracking how they are implementing the various recommendations
we have made to improve their enforcement.
Chair Maloney. And Dr. Sherrill, one of the analyses you
conducted in your report suggests that leave patterns do not
explain very much of the gender pay gap in the Federal
workforce. I found that interesting. I always thought a lot of
studies say that the disparity between men and women is the
different choices of leaving work to have a child, taking care
of a sick parent. So that was very interesting to me. And could
you comment on that a little more?
Mr. Sherrill. Yes, that was also interesting. As we tried
to analyze the results of that, we looked at the impact of
unpaid leave, and we found that it had very little role in
reducing the unexplained portion of the gap. Women had a higher
propensity to use unpaid leave: 18 percent of women versus 11
percent of men over our 20-year period had unpaid leave over 30
days. But that was counterbalanced by the cost of unpaid leave
being higher for men than women. So there were two
counterbalancing factors that we saw. We weren't able to
measure the duration of the unpaid leave, so there were some
data limitations to our analysis.
With regard to breaks in service, women had slightly higher
propensity to have breaks in service: 17 percent of women
versus 15 percent of men had breaks in service over time.
Women's breaks were somewhat longer. But this didn't have any
effect on the pay gap.
Chair Maloney. Other studies that I have read show that
leave patterns do affect the gender pay gap. And very
interestingly, in a lot of studies, including one you did on a
new look at the glass ceiling, it talked about the ``mom
bomb,'' where you become a mother, you get demoted, you become
a father, you get a promotion. And could you explain that a
little more? It says that women really pay a high price for
motherhood, while men actually see their pay increase. Did you
see that in your study or did you look at that time in this
one? I know it was in your other studies.
Mr. Sherrill. We didn't look at it in this study. And I
need to mention a caveat here, because the analysis we did in
this study of the Federal workforce of unpaid leave and breaks
in service was just for the 1988 cohort or group. So we didn't
have such data available to do this analysis for the workforce
as a whole over time.
But we had done an earlier report in 2003 looking at the
gender pay gap for the general workforce. And in that study we
found that differences in women's work patterns, like breaks in
service, unpaid leave and part-time schedules, was a major
explanatory factor there. So we got somewhat of a different
picture when we looked at the Federal workforce using the data
system we had available here.
Chair Maloney. Thank you very much. My time has expired. My
colleague, Mr. Brady, for 5 minutes.
Representative Brady. Thank you, Madam Chairman. I know Ms.
Maatz has been eagerly awaiting the chance to call you Madam
Chairman of the committee.
Ms. Maatz. Absolutely.
Representative Brady. By the way, we have a great local
chapter of Association of Women as well----
Ms. Maatz. Yes, you do.
Representative Brady [continuing]. In the Houston, north
Houston area.
Federal workforce is 5 percent of the entire workforce
would you guess, Mr. Sherrill? A little bigger?
Mr. Sherrill. I don't know right offhand.
Ms. Albelda. I would say it is smaller.
Representative Brady. Somewhere thereabouts. We will get
the numbers. But one, I appreciate you doing the study.
Clearly, it shows we are making progress. But until we get to
the goal of zero, no difference between men and women doing
equal jobs with equal experience and all, this goal hasn't been
met.
I think in the small business community, which creates 80
percent of all new jobs in America, you have seen dramatic
improvement over the last couple decades. I have more
experience there than I do in government. I was a Chamber of
Commerce manager, so I worked with small business
professionals. What we saw were in businesses where basically
hiring the best people and keeping them is the difference
between survival and bankruptcy, where you know if you don't
treat people right someone down the street is going to hire
them away and survive and profit better than you. What I saw in
our communities was that women were quickly moving into
positions of hospital executives, banking executives, ran small
businesses very effectively. And in fact, I think in the free
market system the market itself helps eliminate discrimination,
because simply companies that practice it fall behind,
companies that hire and reward the best workers prosper.
Which is why I wanted to ask Ms. Furchtgott-Roth about what
you described as sort of a tax attack on working women. Because
I have seen this within the small business community, where we
encourage women to get that degree, we encourage them to go
into management positions, we are trying to maximize their
potential to society and the marketplace, yet those are the
very people that this new budget would tax the most and
penalize the most. And in fact, these tax proposals aren't on
the wealthy, they are on professionals and small businesses,
the very ones who we are encouraging to break those glass
ceilings.
Although slated to go away next year but come back in
almost full force in the year after that--in real life we are
seeing more women and minority-owned businesses getting swept
up in the death tax, again a tax aimed at the wealthy. In fact,
it is the thought that you would work your whole life, start a
small business, work your whole life to build it up, have a
nest egg to hand down to your children or grandchildren, and
then have Uncle Sam swoop in at the end and take nearly half of
it is something that many women-owned businesses now are
fearing as perhaps the biggest barrier to handing all their
hardworking wealth on to their family.
Can you talk more about the impact of this tax attack on
working women?
Ms. Furchtgott-Roth. Well, you are absolutely right,
because when a woman goes into the workforce she doesn't just
pay Federal tax, she also pays transportation costs, child
care, State tax. There are all these things that she pays. And
this is piled on top of her husband's rate. And in the top
quintile, the top fifth of American households, the one
distinguishing feature is that there are two earners. So these
two earner couples are in the top quintile as opposed to the
middle quintile, where there is one and a half earner per
family. So maybe every other family has two workers in the
workforce. So increasing the Federal tax means that the woman,
whose income is frequently secondary if she moves in and out of
the workforce, is discouraged from returning to work. Because
when you add everything up, there are some families who say,
well, it is just not worth you going back to work, dear, Uncle
Sam is going to take most of the money. And that is something
that we want to work to prevent. We don't want those top tax
rates to go up because it hurts these married women.
Representative Brady. And that is my concern. I think
encouraging more to come through the front door, as they
should, than to take more out of their taxes in the back door--
--
Ms. Furchtgott-Roth. Exactly.
Representative Brady [continuing]. Seems to be punishing
the very entrepreneurial behavior and achievement we want from
women.
Ms. Furchtgott-Roth. Right. Exactly. We want to have as
flat a tax structure as possible so that when married women go
back to work it doesn't increase the overall tax rate of the
family.
Representative Brady. Right.
Ms. Furchtgott-Roth. And what we are doing with these
proposals is making the tax rates steeper rather than flat.
Representative Brady. Right.
Thank you, Madam Chairman.
Chair Maloney. Thank you. Mr. Cummings for 5 minutes.
Representative Cummings. Thank you very much. Dr. Albelda,
you wrote that research clearly demonstrates a mother's wage
penalty. Are there such penalties against fathers, particularly
single parent fathers?
Ms. Albelda. No. Actually, as Mrs. Maloney, the Chairman
Maloney indicated, typically fathers tend to earn more than men
who aren't fathers. There is not a whole lot of research on the
earnings of single fathers because there aren't very many of
them, although it is growing. They do on average tend to earn
less than married men who have children. So there does seem to
be a small penalty, but not quite as big as mothers' penalty.
Representative Cummings. Ms. Maatz, we know that the
average woman earns $0.78 for every dollar earned by her male
counterpart, but the gap is even more alarming for minority
women. For example, in your testimony you noted that African
American women working full-time year round earn $0.62 for
every dollar earned by white men employed full-time year round.
The problem is even more severe for Latinas, who earn just more
than $0.58 compared to wages earned by white men. Why do you
suppose this is? And why do you think we have this gender gap?
And why is it so severe, you think, for minorities? And what do
you suggest we do to try to close it?
Ms. Maatz. Well, I think there are a variety of reasons for
it. I think obviously we still have an education gap in terms
of getting more people to school. Even though we know that
education doesn't solve the pay gap completely for women, we do
know that it does increase their pay enormously. I do think
that women of color are still caught in a classic double bind,
and that those issues play a role. And I think that there are a
variety of different factors that come into play that are so
difficult, especially in these economic times. We know that
there are a variety of articles that have been written about
how women of color have been especially hard hit in this
recession, and that these are issues that we have to try and
face if we can.
I would like to follow up particularly on something that
Ms. Furchtgott-Roth has said about the tax structure. You know,
we are talking about families and trying to flatten the tax
structure for two-earner families. And you know, most of the
families in this country don't make $250,000. So we are trying
to flatten the tax structure for a very small amount of people
that we are talking about here.
So I think that is critical. You know, it is a very small
amount of people that she is talking about. And I think that
when we are talking about pay equity and we are talking about
people bringing home a fair amount, most working families can't
even dream about that number. We are talking about people who
are making very small--much smaller amounts of money. And
especially when we are talking about women of color, it is a
much tougher issue because of the numbers that you just quoted.
And so this is about making ends meet. This is kitchen
table economics. This is about being able to put food on the
table and being able to pay the electric bill and am I going to
be able to make rent this month. This is not about the
luxuries. This is about actually being able to make my bills
day to day.
Representative Cummings. I often tell folks that people in
my district, they are not trying to get a steak, they are just
trying to get a hamburger.
Ms. Maatz. I think that is true. I think that is true. And
I think there is a lot of job segregation that goes on as well.
My colleague Dr. Albelda talked about that as well. And women
are still put into, in many respects, very clearly into what we
call the pink collar jobs. And it was interesting when Mr.
Sherrill talked about the fact that one of the reasons why we
saw the wage gap shrink in the Federal Government was because
we saw that more men were going into the clerical jobs. It was
clear evidence that job segregation is one of the reasons why
we have a pay gap. So discrimination is absolutely part of the
pay gap, but job segregation is absolutely part of it as well.
And women of color certainly I think suffer from job
segregation even more so than white women.
When you look at the STEM fields, for instance, the science
fields, trying to talk about getting minorities into the
science fields, which are high wage fields that we need to be
competitive, and that is not just for women, that is for men of
color, too, that is a huge issue. And so it is much more
complex.
Representative Cummings. Thank you very much. I see my time
is up. Thank you.
Chair Maloney. The Chair recognizes Mr. Hinchey, and
comments that he has an important bill on the floor today on
the Binghamton disaster. And I just wanted to congratulate your
work in helping the families and helping New Yorkers recover
from that disaster. And the Chair recognizes him for 5 minutes.
Representative Hinchey. Thank you very much, Madam
Chairman. I appreciate very much your having this hearing. This
is an important subject. Is that on now?
Representative Cummings. Yes.
Representative Hinchey. Sorry for the delay. I was just
saying I very much appreciate your bringing about this hearing.
And I think this is a subject that really needs to be dealt
with.
As Mr. Cummings was asking you, the difference is pretty
dramatic between men and women. The number we have is $0.78 on
the dollar for every woman rather than a dollar, but it drops
down depending upon the minority. And I think that that is a
very important aspect of this, too, that really needs to be
dealt with.
One of the things that you were talking about, Ms. Maatz,
is the failure of education, really, to generate an equity in
the outcome of the pay that people get. And regardless of what
that might be, whether it is engineering and mathematics or
whether it is health and things of that nature, or even
something like biology, even in biology women get on average
$0.75 for the dollar.
So I am just wondering why do you think the gender pay gap
persists even among college graduates? What is it that we
should be focusing on to try to deal with that aspect of this
situation? Doesn't education make a difference? Shouldn't it
make a difference?
Ms. Maatz. Education absolutely makes a difference. I mean
it is the bedrock towards a more economically secure future. So
I don't want anyone to think that you should not be getting an
education, and that we don't need to do work to not only close
the achievement gap, but to do work to continue to open doors
for women in nontraditional fields. But the reality exists that
it is not the panacea that the founders of AAUW thought it was
going to be back in 1881. They thought that if you got an
education it was going to take care of everything.
The reality is that once women get out into the workforce,
there are other forces at work, and all kinds of different
things come into play. And some of it is this job segregation
that we have been talking about.
So you can get a biology degree, but if you become a
biology teacher versus going into a science field with biology,
that can play a role. That, though, becomes in many respects a
sociocultural question in terms of why we value hard scientists
over biology teachers. Right?
So I think in some respects we have some real questions to
ask. It is not, when we look at job segregation issues, which
are absolutely a part of why we have a pay equity question, it
is not that we don't want to have, necessarily, job
segregation. It is not that we don't want women to be nurses.
It is not that we don't want women to be teachers. But we need
to think about why do we devalue jobs that are specifically or
in some ways that we see inherently as feminine jobs. We need
nurses. We have got the baby boomers aging at a rapid rate. We
need teachers. We need really good teachers. But why aren't we
actually paying them what they are worth and doing what we need
to do to improve the education system?
So there are those questions as well. But I also think that
there is a discrimination component. When you look at actual
fields where there shouldn't be a job segregation issue, where
it seems more of a mixed gender field and you still see
differences, well, then you've got to start scratching your
head, and reasonable people say, you know what, there is some
bias going on here. And that is where laws come into play.
That is why we want to pass the Paycheck Fairness Act. And
I thank the House for passing it with such a strong bipartisan
vote. But I've got to tell you the Senate has got to get on the
stick, and they have got to pass it too, because we need to get
this moving and get this done.
The administration needs the tools to move it forward. That
law has not been touched for 45 years, and it has got loopholes
you could drive a Mack truck through.
Representative Hinchey. Yeah. Anybody else? The situation
with regard to public employees also is something that needs
attention. I mean I had the sense generally that there was a
greater equity with regard to Federal employees than there was
out in the private sector. But there seems to be nevertheless
some inequity in the public workforce as well.
Anyone want to comment on that? Dr. Albelda.
Ms. Albelda. There is more equity. The total pay gap in the
Federal workforce is much smaller than it is in the workforce
as a whole. So I think the lesson is actually that when you
have good employment practices, as the Federal Government does,
largely in response to anti-discrimination laws that were
passed in the nineteen fifties, sixties and seventies, that you
actually can reduce the pay gap. So that I mean I think--I take
an opposite lesson, that even though it still exists, good
employers, employers that have transparent rules that follow
anti-discrimination laws, that pay attention to this can
actually reduce the pay gap substantially. So I would applaud
Federal--and in fact many women choose to go into government
employment. A lot of professional women, particularly African
American professional women, find themselves in public
employment largely because they are good employers.
So I think good employers, as you said, will attract good
workers, but certain places make it more conducive. So I would
applaud the government for their anti-discrimination efforts.
And there is still some ways to go, but that reduction is much
higher than what we have seen for all other workers.
Representative Hinchey. Madam Chairman, if I could just
make a comment about this.
Chair Maloney. Absolutely.
Representative Hinchey. I think that the point that you
made is very, very good. One of the things that we are
struggling with right now is an initiative that was taken by
the previous administration, but unfortunately is still in
play. And that is privatizing the workforce throughout much of
the Federal Government, particularly with regard to work in the
education academies, whether it is the Army, the Navy, the Air
Force, all through that element. They are seeking, the previous
administration was seeking, and is continuing, to change that
process. That is something that we really need to deal with. Do
you think that is----
Ms. Albelda. I think it is true in State and local
government as well as they privatize more. I mean I think
private employers can be good employers, but they have to have
the rules in front of them, and the rules have to be enforced.
And you make the rules. So I think that they need the rules to
be good employers.
Representative Hinchey. Thank you very much. Thank you,
Madam Chairman.
Chair Maloney. I would like to ask all the panelists to
comment on why is it so hard to change the pay gap? If you look
at the other GAO report that they did on 20 years of pay, they
saw a consistent 20 percent gap between men and women's pay
after you brought in all the reasons for this. There was this
consistent 20 percent. It hadn't budged an inch.
And also the other GAO report that I was involved in showed
that men and women had entered the workforce at the same level
because of the women's movement, the labor movement, but 5
years out, when you went into supervisory positions, management
positions, the pay gap actually grew substantially, some cases
18 percent. So women were losing ground except in the areas
that Ms. Maatz points out that are female dominated, health
care, care giving, education.
Chair Maloney. So the main question I would like to ask all
of the panelists: Why is it so difficult to chip away at the
pay gap? We really haven't made success of it since the 1980s,
and we haven't gained any ground since the 1980s.
And I would like to ask Ms. Roth to also comment, after the
pay gap deal, or get in writing to the committee, how many
women are affected by this tax structure.
And I must say that I do know some couples who get a
divorce to get equal treatment in the tax structure. I know
some couples who did a study that showed their taxes would go
up, so they are living in sin or, rather, they are living
together--not to make a judgmental deal on it--because of the
tax structure. Now, in a country that promotes marriage, this
seems somewhat unfair.
And I will say that I think there is tremendous
discrimination against women everywhere. That is why I wrote a
book about it, Rumors of Our Progress are Greatly Exaggerated.
And in the tax policy, to encourage a woman not to work is very
discriminatory. Because many women are divorced, and then they
give up their careers, and they are part of the numbers of
women in poverty.
The largest determination or factor to determine who is
going to be in poverty in old age is being a woman with a
child. I think that is a devastating statistic, again, from
GAO, that our policies are really not supportive of women with
children.
And from my own personal experience, I will share with you,
when I became a mother, my husband came to me with charts
showing that we were losing money if I worked; that with the
cost of child care, the change in tax structure, our family
lost money because I was working, and that I should drop out of
the workforce. I am very pleased that I did not drop out, but
many of my middle-class families and friends did drop out of
the workforce and, I would say, very much to their detriment.
And on a philosophical--since we have two philosophers on
the panel today--we cannot afford not to have the best and the
brightest competing in this new world economy, and we need our
women and minorities to have all the educational opportunities
in order to compete in the world economy. Otherwise, we are
hurting ourselves as a Nation.
So the numbers that you show to discourage possibly the
second worker, male or female, is not a policy that we want to
continue in our government. Possibly a fairer way to approach
it is to have each person who is paying taxes be taxed
separately or individually so that this does not happen. And
your comments on it.
But my question to the panelists, first of all, is, why is
it so difficult to bring equity into the workforce, and why
have we not changed our numbers really since the 1980s in pay
discrimination? The Federal Government has done better, as we
see in this, but roughly it has been 78 cents persistent or 80
cents to the dollar or 78 cents to the dollar persistent for 20
years, depending on which study. That has been harder to change
than any social policy that I am aware of. It has just been
unbelievable that it has just been so consistent. And, in some
cases, when you reach for the promotions, the level has dropped
dramatically and painfully for many women in the workforce.
And so any comments from any of the panelists?
Ms. Furchtgott-Roth. Well, it has improved when you take
into account all the different factors such as education. Then
you can see that the wage gap has in fact narrowed. But in
order to eliminate it completely, first of all, you would have
to mandate that everyone studies the same thing in school, so
that 50 percent of physics majors would be men, 50 percent
women.
Chair Maloney. Ms. Roth, I dispute that. We now have more
women in law schools than men. We have more women in medical
schools than men. And women are highly educated.
The point that Ms. Maatz made is that we have become highly
educated and we have moved forward with great education, but it
hasn't been translated in pay equity. And the report I cite is
the GAO report, the nonpartisan, bipartisan GAO report that
showed a consistent 20 percent gap or more between men and
women for 20 years. This was 5 years ago, this report. I would
like to see it again and see, maybe we have made some gains.
But most reports show that we have not and that it is
persistent and it is strong and that it is unexplainable.
Ms. Furchtgott-Roth. With the utmost respect to my co-
panelist, I was talking about science. And certainly in the
STEM (Science, Technology, Engineering, Mathematics) areas
there are fewer women than men in terms of majors in college.
But to get to the next point, you would also have to
mandate that people work the same amount of hours and have the
same amount of productivity. And data show that when women have
children they tend to cut back on the time and the hours that
they work and they choose jobs that enable them to be back at a
reasonable time.
Chair Maloney. That is an important point. But, Dr.
Sherrill, didn't your report factor in these considerations of
leave for the birth of a child, leave for taking care of a
parent? Didn't they factor in, in your report?
Mr. Sherrill. That is right. That report we did was on the
general workforce over almost a 20-year period. And, as you
said, the raw pay gap was about 45 cents or so. Once we
accounted for a range of factors, it was still about 20 cents
on the dollar unexplained here.
Chair Maloney. Which excluded the points you made, Ms.
Roth, of taking time out and not working as long. Once you took
out all these factors, there was still the pay differential.
Ms. Furchtgott-Roth. The amount of time was not a variable.
It was whether they took time off but not the extent of time.
If they took 1 week off or 6 months off, that wasn't
distinguished. Right, Dr. Sherrill? Because you didn't have the
amount of time. It says so in your report.
Mr. Sherrill. I think we are talking about two different
reports. On this one on the Federal workforce, we did not have
the amount of time that women had the unpaid leave. On the one
we did in 2003, I believe that we did.
Chair Maloney. And, Dr. Albelda, since you have written
several books on it, could you jump in on this?
Ms. Albelda. Well, I would suggest and think a little bit
bigger about the kind of jobs we have at the United States. I
think at the high end, the professional jobs that about maybe
one-third of the labor force is in, those jobs are what I have
called jobs with wives. Those are jobs which require workers to
work a lot of time and have a very hard time balancing work-
family responsibilities. So the jobs themselves have been
structured for centuries, actually, now to accommodate a worker
that is not encumbered by any care-giving responsibilities,
making it very difficult for women to do those jobs. And where
you see professional women go is they go to the workplaces that
know how to work with professional women, like teachers or
hospitals or the public sectors. So these sectors----
Chair Maloney. Or small businesses.
Ms. Albelda. So they can have the flexibility. At the low
end, those are what I call jobs for wives. Those are the jobs
that tend to be low wage. The employer and employee don't have
very much long-term relationships and stability. They don't
have benefits. They often are--you can work part time or not.
But that is part of the pay gap, is a lot of women are funneled
into low-wage jobs. And only one-third of women in the United
States have a bachelor's degree. So two-thirds of all women in
the United States don't have a bachelor's degree. So higher ed
helps, and I teach women I want them to get their degrees and
move on.
So I think there are two different things going on, but I
think they all stem from the same thing, which is that we have
workplaces that are not built for equity in the sense that the
high-paying jobs assume you don't have family responsibilities
and the low-paying jobs do. So we need to rethink who gets what
benefits, how we structure jobs, what is overtime, and what
does work flexibility mean for all workers, not just at the top
or even at the bottom.
Ms. Maatz. And the other piece of this I would say, too, in
AAUW's research, we actually found that motherhood was not the
driving factor behind the wage gap among working women 10 years
out of graduation. In fact, what we actually found was that
mothers who were in the workforce full time did not earn less
than other women who were working full time, controlling for
other factors such as occupation and majors.
Chair Maloney. But the comparison is not with other women;
it is with men.
Ms. Maatz. I know. But what I am trying to say there and
what my learned counterpart here is trying to say is that women
who have kids take extra time off or work less hours than other
people because they have kids. Well, they certainly didn't do
that less than any other women. So then when we are comparing
them to men, obviously then that is a reasonable conclusion.
So in this particular instance, what we are finding is that
over the years women have found all kinds of ways to balance
motherhood and work; and it has worked really well.
But, Congresswoman, I really want to get to your point
about reasons for why we can't get past the pay gap, because I
think that is a great question.
Chair Maloney. I am way over time, and I have to be very
respectful to my colleague. So I would like to yield him such
time as I took for his questioning, and then when I come back I
will ask you that question. Because I would like to hear what
you have to say. But we have to be balanced in this discussion.
So I recognize my colleague for such time as he may
consume.
Representative Brady. I will be brief.
There is no question that, until we get to no pay gap,
period, we have not reached our goals as a country in fairness,
in equity. But I dispute the thought that we are not making
progress on this issue. I think clearly we are.
And progress on that chart in the Federal Government--
again, I understand that 93 cents for every male dollar isn't
satisfactory, but we are making significant progress. Even the
Bureau of Labor Statistics does that in its overall study,
which is sort of misleading. Basically, it is equivalent of if
we take every man's salary in this room versus every woman's
salary in this room, there will be a pay gap. Well, clearly,
you are comparing apples to oranges. When you do get closer to
it, you see, like in the government study, we are starting to
whittle down that pay gap. Which is good, but it won't be good
enough until we get to zero.
I think we are getting better at studying the reasons why,
which is giving us more clues as to what we need to do to
eliminate it completely.
In your statement, Dr. June O'Neill from American Economic
Review did a wage study ratio between men and women. Ms.
Furchtgott-Roth, can you talk a little about that?
Ms. Furchtgott-Roth. Yes. She compared men and women
making--with the same jobs. She took into account time out of
the workforce, used in a host of studies. She put in an
aptitude test, the Armed Forces aptitude test. And the more
things she added, the smaller the pay gap became; and she got a
number of about 95 to 97 percent.
And most studies, with respect to my honored colleague over
here, do show that the more children there are, the larger the
wage gap because of the time out of the workforce.
Jane Waldfogel of New York University has written articles
showing how increased numbers of children do tend to make the
pay gap widen. And that is why some people call for paid family
leave as a remedy to the pay gap. And I believe that was
mentioned. Their view is that children do have an effect. But
when you take into account these different things, you do find
that men and women are paid the same.
Now, the Behind the Pay Gap (AAUW) study does show that
there is no effect of numbers of children on women's pay. But
that is basically outside the general academic literature.
Representative Brady. The reason I ask you about it is I
also dispute the thought that the government is the only place
where discrimination no longer exists. Because I think in the
private sector again you are seeing market forces reward that
type of entrepreneurial professional degree that we are
encouraging more women to pursue.
You mentioned another study, Professors Bertrand and
Hallock, that dealt with male and female executives, another
issue, has encouraged more and more people stepping into the
boardroom and running their own companies. What did that study
show?
Ms. Furchtgott-Roth. That showed that when you take into
account the different factors, male and female executives at
top corporations are paid about the same. So the closer you
compare, the closer the pay gap comes. Such as Congressmen and
Congresswomen are paid the same. Male and female Senators are
paid the same. They have the same jobs. But when you take these
large averages, that is when you start getting these large pay
gaps.
And this Behind the Pay Gap study shows occupations. It
doesn't show specific jobs, a specific cashier with one year's
experience versus another specific cashier with another year's
experience. And the only way to make the pay gap completely
disappear is to mandate that everyone is paid the same. The
Soviet Union attempted that, and the Soviet Union crumbled.
Representative Brady. I don't think we are there in the
private sector yet, where discrimination doesn't exist and pay
equity is perfect. It is not. I just think we are making
progress. And I do agree with the chairman that a Tax Code that
punishes people for seeking those professional degrees,
punishes people where two workers go back to work is a poor Tax
Code and making it even more so I think is really damaging to
working women. It is one of those issues that maybe we can find
common ground as we go forward in this committee.
Again, Madam Chairman, thank you for leading this
discussion today. I think it is important every year that we
measure our progress on this issue and look for ways to improve
even more.
Chair Maloney. I appreciate the gentleman's comments.
And maybe, Dr. Sherrill, it is time to update a new look at
the glass ceiling--we haven't had that report in 5 years--and
incorporate some of the points that Mrs. Roth has brought up
and Ms. Maatz and take another look at it.
Quite frankly, I found that report astonishing, that there
was a 45 percent gap between men and women. And, obviously, if
you are in a profession where it is mandated by law, men and
women are paid the same in my profession, a Member of Congress,
but in most offices they are not. And most offices, it is a
very deep and strong bias against them.
In fact, I just saw the play Nine to Five, which was around
in 1980; and it is still very relevant. In the play, a woman is
fired for asking an employee what she is paid. She is fired.
And the work/family balance support which Dr. Albelda and
Ms. Maatz mentioned, such as paid family leave, flex time, the
right to deduct the cost of child care, and the vital fact that
most women work because they have to, it is not a choice. It is
not a luxury. It is a necessity to provide the income for the
families.
But possibly you would join me in a request to Dr. Sherrill
for another GAO report that looks at 25 years of pay and see if
we have made any success in that range.
But, truly, the most fascinating one you did, Dr. Sherrill,
was the look at those that have moved into management where, in
some cases, we were losing ground. Even in times of great
prosperity, we didn't share the wealth; we grew the disparity
between men and women in pay. And it might be interesting to go
back and look at that, and particularly during an economic
downturn, how women are faring in the workforce.
But, Ms. Maatz, I would now call upon you to continue with
your statement. And anyone else who would like to make a
statement, I look forward to your comments.
I think that we are making progress in the public sector,
which is the model, but the reports that I have read--and I
look forward to reading the reports that you mentioned, Ms.
Furchtgott-Roth, as I am sure other panelists do. But those
that I have read, the scientific reports that are separate from
Congress still show a deep and strong, persistent wage
discrimination which is terribly unfair and one that we need to
address in every way we can. Ms. Maatz.
Ms. Maatz. Thank you. And you will be pleased that my
reasons or solutions don't include kidnapping my boss like Nine
to Five. We try to avoid that particular one.
The first one that I would get to is that, actually, since
1980, we have not had a major law passed in terms of pay
equity. Now, I know you are probably thinking to yourselves
``Ledbetter''. And Ledbetter certainly was a critical law when
it came to pay equity and court access, and it was critical in
terms of court access to combat wage discrimination. But when
it actually came to being able to fight the root causes of why
pay equity exists, that was not the bill that did it. That was
literally just a bill that got women in the courthouse doors.
So I put that caveat there, and I think that is critical to
note.
The other one is job segregation that I mentioned earlier.
Job segregation continues to exist. It is the product of all
kinds of reasons: bias in terms of school counseling. Certainly
there is personal choice there. I talked earlier it is not that
we want to discourage people from being teachers or nurses or
whatever, secretaries, cosmetologists, but we need to look at
how we pay those kinds of jobs and how the market works with
that. There is a great study up in Long Island where they paid
their groundskeepers more than they paid their first-year
teachers. Clearly, that is an issue in terms of what we value
and what we don't in male professions and female professions.
I think that there is absolutely, now that we have so many
more women in the workplace and there is an acknowledgement
that for a thriving economy that innovates, that is preparing
and working to meet the demands of a 21st century competitive
global marketplace, that we need women's work and we need
women's labor. There is no getting around that.
At the same time, I think there is a lot more maternal
profiling that goes on because there are assumptions that are
made about women who have kids or women who might have kids. So
I think that that is absolutely a reason why the pay gap sticks
around.
And the fourth one that I would say is that I think that
the government needs to play a stronger role both in terms--not
only in terms of the legislation that I mentioned right away,
right off the bat, but in terms of the executive branch and
data collection and oversight programs.
One of the things that Mr. Sherrill mentioned in his
testimony or in one of his questions was some recommendations
that they had made; and one of the thoughts that I had right
off the bat was a whole survey--equal opportunity survey that
was discontinued under the prior administration and under the
Paycheck Fairness Act.
Chair Maloney. Where was that study?
Ms. Maatz. Well, the equal employment survey was a survey
that was developed under three different administrations in a
bipartisan fashion.
Chair Maloney. Was it in the Census Department? Where was
the study?
Ms. Maatz. It was under the Office of Federal Contracts
Compliance programs, and it was a way to find out information
about wages and hours and so on and so forth. But it was a way
to target wage enforcement issues.
And think about how great it would be if that particular
survey were actually in place now with all of this stimulus
money going out the door to make sure that the Federal
Government, as the largest contractor, think about how much
money we spend as the Federal Government, to make sure that we
are actually spending it with contractors who are following
civil rights laws. And that survey was discontinued in 2006.
So under the Paycheck Fairness Act, that survey would
actually be put back in place. But the administration can do
that without that legislation. They don't need a body or leave
of the legislation to be able to do that. And there are all
kinds of other data collection processes that they can put in
place with the employers to make sure that we are following
wage and hour laws and doing the kinds of things that we need
to do to follow civil rights laws.
So a lot of this has to do with accountability. If you are
not holding people accountable, then you are not going to see
results. It is as simple as that.
Chair Maloney. Thank you for your impassioned statement.
And when we did pass the Federal Employees Paid Parental
Leave Act and the Lilly Ledbetter Fair Pay Act, my office went
back and tried to find the last bill that we passed to help
families balance work and family and to advance equality of
rights for women. And you are absolutely right, Ms. Maatz. It
went back to 1993, the passage of the Family and Medical Leave
Act. We had not taken any other substantive action.
I would like Dr. Albelda and Dr. Sherrill and Ms. Roth, if
you would like to comment. And, my colleague, I don't know if
you want another round of questions or not. If you would like
to comment, then we will conclude the hearing on anything you
would like to--statements you would like to make.
Dr. Sherrill.
Mr. Sherrill. Just piggybacking on the last point Ms. Maatz
talked about in terms of additional data collection.
In our prior study on the Department of Labor and the Equal
Employment Opportunity Commission, we found that some of the
data they are already collecting could be better mined to help
them do their job better. In addition, Equal Employment
Opportunity Commission investigators told us that they would
like to have access to some of the enforcement data from the
Department of Labor. So there may also be issues of sharing of
data across these agencies, in addition to the possibility of
collecting additional data.
Chair Maloney. That sounds like a good hearing to hold. Dr.
Albelda.
Ms. Albelda. I would like to just address the apples and
apples and then the apples and oranges.
Even when we compare apples to apples we find some pay gap,
and that pay gap is probably due to some form of
discrimination. Because we have adjusted for absolutely
everything else there is.
The problem is that women and men are apples and oranges in
terms of the labor market and jobs that they get. So I think we
need to address the similarities where they are the same, as
executives or faculty or whatever they are and still earn less,
but we also have to address why there are differences. Some of
those have to do with the occupation, but some exactly has to
do with how we value women's work. As I said, this care sector,
which is a growing sector, it is part of our human
infrastructure. We don't value care work, whether it is paid or
unpaid at home.
So I think all--and my last comment has to do with the tax.
I have been studying this stuff for almost 30 years. And in all
the studies I have ever looked at, nobody--very rarely is there
any mention of marginal tax rates as what keeps women and men
pay unequal. But what is often mentioned is the cost of child
care and the cost of--where that costs women to go to work. So
I think some of that has to do with addressing some of those
issues as much as we address the high marginal tax rate.
And it is low-income women who don't marry. High-income
women know that, even though there is a penalty to marriage,
they are better off when they retire if they stay married even
if they don't like the marginal tax rate. It is low-income men
and women that don't marry who have very high marginal tax
rates when you take into effect they lose food stamps for every
additional dollar they earn or they may lose the earned income
tax credit.
So I think if we want to think about marginal tax rates and
how that affects low-income women in particular, I think we
need to think about those issues around what we support
earnings with, as well as the choices that they are able to
make, provided if there is quality child care available, et
cetera.
So the apples and oranges question, I think we have made
incredible progress on the apples and apples. It is the apples
and oranges that we haven't. And I think we need to be vigilant
about how we value women's work, whether it is inside the home
or outside the home.
Chair Maloney. Thank you. You have really given me a great
deal to think about.
Ms. Roth and then Ms. Maatz.
Ms. Furchtgott-Roth. Thanks for your request about the
numbers of women affected by the tax rates. I will certainly
try to provide you with the data that exists.
We also need to be aware, though, that there are numbers of
women who do not work because of the taxes, the contemporaries
you talked about whose husband won over and said don't work,
and then they didn't work. So we have numbers of people who are
not in the workforce because of the tax situation. And Dr.
Albelda is right, it is at the low-income as well as the high-
income levels those marginal tax rates discourage people from
working.
There have been a number of suggestions, to move on to a
slightly other topic, about the data collection. And we also
need to be aware that if we are requiring employers to provide
more data as to the wages that they pay and to justify those,
that is also going to discourage them hiring certain type of
workers. So say one person they think doesn't have enough
experience would only get hired at a different kind of wage.
The requirement that they have to provide a lot of data on
gender, on jobs, on pay is likely to discourage employers,
especially small businesses, from hiring women because they
don't want to be accused of discrimination. And we need to be
very careful, especially in the recession, about imposing data
collection burdens on employers, both large and small.
Chair Maloney. I would like to invite all of the panelists
to give to the committee any thoughts they may have on data
collection and ways it should be handled. And I would like to
give the last word to Ms. Maatz, who is never out of words.
Ms. Maatz. I just want to thank the chairwoman for having
this hearing and Congressman Brady for being here as well. I
will be sure to tell our ladies back in Texas that you were
here and how wonderful you were during the hearing. We have
somebody in the office twittering this, so I am sure they
probably already know about it, believe it or not.
And, Congresswoman, thank you so much for all you have done
in terms of this particular issue and your Federal Employment
leave bill as well, as something AAUW strongly supports. You
have been a wonderful fighter for women throughout your career,
and it is my pleasure to have been here today. Thank you.
Chair Maloney. Thank you all for your testimony and your
very hard and substantial work.
The meeting is adjourned.
[Whereupon, at 10:35 a.m., the committee was adjourned.]
SUBMISSIONS FOR THE RECORD
Prepared Statement of Representative Carolyn B. Maloney, Chair
Good morning. I want to welcome our distinguished panel of
witnesses and thank you all for your testimony today.
This hearing is timely, because today is Equal Pay Day--the day
that symbolizes how far into the year that the average full-time
working woman must work to earn as much as her male counterpart earned
the previous year. We have made a great deal of progress in closing the
gap between men's and women's wages since President Kennedy signed the
Equal Pay Act in 1963--but as the saying goes, women's work is never
done.
Women earn just 78 cents on the dollar as compared to men--for
doing the same work. For minority women, the wage gap is even larger.
African American women earn only 62 cents for every dollar earned by
white men and Hispanic women fare worse at only 53 cents.
The report released today by the GAO provides additional evidence
of the persistence of the gender pay gap, but the workplace setting is
particularly troubling. The federal government should be a model
employer, but today's report tells us we have considerable work left to
do to live up to that promise. The GAO finds that an 11 cent gap
remains between men's and women's pay in the federal workforce, even
after accounting for measurable differences like education, occupation,
and work experience.
The report also finds that the total pay gap shrank between 1988
and 2007, from 72 cents on the dollar to 89 cents on the dollar.
However, the share of the gap that can't be explained has remained
remarkably constant, at 7 cents. Those 7 cents may be explained by
discrimination against female federal employees.
The pay gap in the federal workforce that GAO found reflects
troubling pay disparity issues in the broader labor market.
I am proud to have successfully fought for equal compensation after
September 11th. The compensation plan for victims' families, as it was
originally proposed, was based on outdated government formulas that
assumed women victims would have worked for less of their lives than
their male counterparts. In effect, the proposed system of compensation
was providing less for the families of women victims simply because
they were the families of women. It was a sobering reminder of how
institutionalized gender discrimination can be, and that there are many
battles yet to be won.
Women are more productive and better educated than they've ever
been, but their pay hasn't yet caught up. The pay gap affects women at
all income levels and across a wide range of occupations, and it widens
as women grow older.
Equal pay is not just a women's issue, it's a family issue. The
impact of the wage gap is particularly painful in our current economic
downturn as families struggle to make ends meet in the face of stagnant
wages and job losses.
Estimates of how much women stand to lose over their lifetime due
to unequal pay practices range from $700,000 for a high school graduate
to $2 million for doctors and lawyers, according to the WAGE project.
Every dollar counts, so now more than ever, families should not be
shortchanged by gender pay differentials.
Moreover, the GAO previously has found that women with children
earn about 2.5 percent less than women without children, while men with
children enjoy an earnings boost of 2.1 percent, compared to men
without children. So fathers enjoy a bonus, while mothers pay a penalty
for their decisions to have children.
While some of the gender pay gap can be explained by differences in
men's and women's occupations and leave patterns, study after study
shows that a substantial portion of the gap remains unexplained. Women
continue to bump up against everything from subtle biases to egregious
acts of discrimination relating to gender stereotypes about hiring, pay
raises, promotions, pregnancy and care-giving responsibilities.
The Ledbetter bill was an important start, but additional
legislation is necessary to close the loopholes in the Equal Pay Act
that allow discrimination to persist. I am proud to be a co-sponsor of
the Paycheck Fairness Act, which passed the House earlier this session
and I hope that the Senate will take action soon.
Better work-life balance policies would allow both mothers and
fathers to continue to support their families and develop their
careers. By ensuring that women aren't forced to start all over again
in new jobs, paid leave policies can help keep women on an upward
trajectory in their careers, protecting their earnings. The Federal
Employees Paid Parental Leave Act, which I have sponsored, would do
just that.
By recognizing the persistence of the problem and taking action, we
have the opportunity to make next year's Equal Pay Day a celebration of
progress.
I look forward to the testimony of our witnesses today.
__________
Prepared Statement of Kevin Brady, Senior House Republican
I am pleased to join in welcoming the panel of witnesses before the
committee this morning. A key focus of this hearing is the new
Government Accountability Office (GAO) report on women's pay in the
federal workforce.
According to the new GAO report, ``the difference between men's and
women's average salaries . . . declined significantly in the federal
workforce between 1988 and 2007.'' The study notes that the ``pay gap
narrowed as men and women in the federal workforce increasingly shared
similar characteristics in terms of the jobs they held, their
educational attainment, and their levels of experience.''
Between 1988 and 2007 the gap between men's and women's pay had
declined from 28 cents on the dollar to 11 cents. GAO reports that
about ``7 cents of the remaining gap might be explained by factors for
which we lacked data or are difficult to measure, such as work
experience outside the federal government.'' GAO was careful to state
that its findings do not prove or disprove pay discrimination.
The trends noted in the GAO report are similar to those observed in
the overall economy in recent decades. The pay differential of men and
women, once adjusted for occupation, education, experience, hours, and
leave, has fallen over time. Although some differences remain, men and
women with similar characteristics working in the same kinds of
occupations have comparable pay.
The progress women have made over the years is reflected in a
number of ways. Between 1970 and 2007, the women's labor force
participation rate increased from 43 percent to 59 percent. Women now
receive a majority of undergraduate and graduate degrees. In 2007,
women held over half the jobs in well-paid management and professional
occupations.
However, as Diana Furchtgott-Roth notes in her testimony this
morning, higher marginal tax rates could effectively raise taxes on
married women by increasing the marriage penalty for some two-earner
couples. I'm also very concerned that given the grim fiscal outlook,
the application of these higher tax rates will eventually be much
broader than that proposed by the Administration. The emerging policy
mix of much higher taxes and government spending, by undermining
economic and employment growth, will harm both women and men in the
workforce.
__________
Prepared Statement of Representative Elijah E. Cummings
Thank you, Madam Chair.
You have been a tireless advocate for gender equality in the
workforce, and especially today, on Equal Pay Day, it should not go
unnoticed.
I hope today's hearing helps shed light on the continuing practices
that prevent full equality in the workplace, and I look forward to
working with you to eliminate such wrongdoing.
For the past three months, the Bureau of Labor Statistics has
reported nearly 600,000 jobs lost each month.
I suspect next Friday we will hear similarly staggering figures.
With so many of our families led by a single female parent, I am
deeply disappointed that our mothers and sisters have to face not only
the rising tide of unemployment, but also what amounts to a ``gender
tax.''
As we have heard in the past, there is a component of the gap
between wages of similarly-situated male and female employees which no
variable can explain in detailed analyses--and which many attribute to
discrimination.
I am especially disheartened to see that the wage disparity widens
in the cases of women with advanced degrees.
After putting in the years and years of effort to earn such
degrees, many women still earn a wage that is lower than equally-
educated male counterparts--which belittles the time and effort
required to earn these credentials.
Equally saddening are the statistics that show women who are also
minorities face race discrimination on top of gender bias. The
persistence of any element of unequal treatment that prevents any
American from achieving the full measure of her potential, or enjoying
the full benefits of the rights guaranteed by our Constitution is
unacceptable.
Now, importantly, we face a situation in which many assume that
given the wide participation of women in the workplace, equality has
been achieved.
Frankly, on many fronts, many Americans assume that discrimination
is a ``thing of the past.''
Today's hearing is an important reminder that, sadly, we cannot
limit our vigilance or expect that discrimination is always and only
characterized by actions that are readily apparent.
That is why we need to provide those who have been harmed with the
requisite remedies, strengthen penalties for discrimination, and
increase enforcement of these offenses.
For that reason, I was extremely pleased to join so many of my
colleagues in co-sponsoring the Lilly Ledbetter Fair Pay Act of 2009.
This legislation is a perfect example of what can be achieved by the
collaboration between President Obama and this Congress.
The Fair Pay Act starts us down the road to the eventual
elimination of the gender wage disparity, and the remedies provided in
the bill are the first steps toward this goal.
It is my sincere hope that the additional protections and remedies
found in the Paycheck Fairness Act are also signed into law during this
Congress.
The witnesses before us today have written forcefully and
articulately on the role of gender in the labor market.
As a result, I look forward to a frank discussion about what can be
done to address the harms done, and to prevent further harm moving
forward. Thank you, I yield back.
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Prepared Statement of Lisa M. Maatz
Chairwoman Maloney and members of the Committee, thank you for the
opportunity to testify today on the critical issue of pay equity.
I am the Director of Public Policy and Government Relations at the
American Association of University Women. Founded in 1881, AAUW has
approximately 100,000 members and 1300 branches nationwide. AAUW has a
proud 127-year history of breaking through barriers for women and
girls, releasing its first report on pay equity in 1913. Today, AAUW
continues its mission through education, research, and advocacy.
I am particularly pleased to be here to talk about pay equity, not
simply because today is Equal Pay Day, but also because AAUW believes
it's critical these tough economic times aren't used as an excuse to
roll back the hard fought gains women have made. Instead, policy makers
need to ensure that women workers--all workers--don't just survive the
downturn but continue the march toward fair pay and workplace
opportunity. Empowering women is one investment that always pays long-
term dividends, not only for the women themselves but their families
and the entire nation as well.
As the recession continues, women are increasingly becoming the
sole breadwinners of their families--making pay equity not just a
matter of fairness but the key to families making ends meet. The
American Recovery and Reinvestment Act, signed into law in February, is
intended to save or create 3.5 million jobs over the next two years.
According to a White House report, an estimated 42 percent of the jobs
created--nearly 1.5 million--are likely to go to women.\1\ The recovery
package clearly is counting on women to play a leading role in the
nation's economic recovery, and their ability to do so is strengthened
considerably when women's paychecks are a fair reflection of their
work. In fact, this is just one of the reasons why new legislation
strengthening pay equity laws is not only necessary but timely,
amounting to an ``equity'' economic stimulus.
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\1\ Jared Bernstein and Christina Romer. The Job Impact of the
American Recovery and Reinvestment Act. Retrieved March 5, 2009, from
http://otrans.3cdn.net/ee40602f9a7d8172b8_ozm6bt5oi.pdf.
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I am also pleased to share findings from AAUW's research report,
Behind the Pay Gap. Our report provides reliable evidence that sex
discrimination in the workplace continues to be a problem for women,
including young college-educated women. I will also discuss pending
legislation that we believe could make real progress in closing the pay
gap between men and women, as well as how the wage gap generally
affects women--especially mothers.
the wage gap persists
According to the U.S. Census Bureau and Bureau of Labor Statistics,
women who work full time earn about 78 cents for every dollar men
earn.\2\ Because of the wage gap, since 1960, the real median earnings
of women have fallen short by more than half a million dollars compared
to men.\3\ Minority women face a larger wage gap. Compared to white
men, African American women make 67 cents on the dollar (African
American men make 78 cents); Hispanic women make about 58 cents
(Hispanic men make almost 66 cents).\4\
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\2\ U.S. Census Bureau and the Bureau of Labor Statistics. (August
2008). Annual Demographic Survey. Retrieved December 11, 2008, from
http://pubdb3.census.gov/macro/032008/perinc/new05_000.htm.
\3\ National Committee on Pay Equity. (September 2007). The Wage
Gap Over Time: In Real Dollars, Women See a Continuing Gap. Retrieved
December 11, 2008, from http://www.pay-equity.org/info-time.html.
\4\ U.S. Census Bureau and the Bureau of Labor Statistics. (August
2008). Annual Demographic Survey. Retrieved December 11, 2008, from
http://pubdb3.census.gov/macro/032008/perinc/new05_000.htm.
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In addition, wage discrimination lowers total lifetime earnings,
thereby reducing women's benefits from Social Security and pension
plans and inhibiting their ability to save not only for retirement but
for other lifetime goals such as buying a home and paying for a college
education. New research calculates that the pay inequity shortfall in
women's earnings is about $210,000 over a 35-year working life.\5\
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\5\ Institute for Women's Policy Research. (July 2008). Improving
Pay Equity Would Mean Great Gains for Women. Retrieved December 11,
2008 from http://www.iwpr.org/pdf/payequityrelease.pdf.
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origins of the wage gap
One partial explanation for the wage gap is occupational
segregation. According to AAUW research, women are still pigeonholed in
``pink-collar'' jobs that tend to depress their wages. AAUW's 2003
report, Women at Work, found that women are still concentrated in
traditionally female-dominated professions, especially the health and
education industries. The highest proportion of women with a college
education work in traditionally female occupations: primary and
secondary school teachers (8.7 percent) and registered nurses (6.9
percent).\6\
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\6\ AAUW Educational Foundation. (March 2003). Women at Work.
Washington, DC.
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A 12-state analysis based on data from the Department of Education
found that women tend to be overwhelmingly clustered in low-wage, low-
skill fields. For example, women constitute 98 percent of students in
the cosmetology industry, 87 percent in the child care industry, and 86
percent in the health aide industry. In high-wage, high-skill fields,
women fall well below the 25 percent threshold to qualify as a
``nontraditional field.'' For example, women account for 10 percent in
the construction and repair industry, 9 percent of students in the
automotive industry, 6 percent in the electrician industry, and 6
percent in the plumbing industry.\7\
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\7\ National Women's Law Center. (2005). Tools of the Trade: Using
the Law to Address Sex Segregation in High School Career and Technical
Education. Retrieved December 11, 2008, from http://www.nw1c.org/pdf/
NWLCToolsoftheTrade05.pdf.
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Women's achievements in higher education during the past three
decades are considered to be partly responsible for narrowing the wage
gap.\8\ But at every education level, women continue to earn less than
similarly educated men. Educational gains have not yet translated into
full equity for women in the workplace.
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\8\ See, for example, Blau, Francine and Lawrence Khan. The Gender
Pay Gap: Going, Going . . . But not Gone. Paper presented at the
Cornell University Inequality Symposium, October 2002.
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the aauw report: behind the pay gap
In our report, Behind the Pay Gap, AAUW found that just one year
after college graduation, women earn only 80 percent of what their male
counterparts earn. Even women who make the same choices as men in terms
of major and occupation earn less than their male counterparts. Ten
years after graduation, women fall further behind, earning only 69
percent of what men earn. After controlling for factors known to affect
earnings, a portion of these pay gaps remains unexplained and is likely
due to discrimination.
The study is based on nationally representative surveys conducted
by the Department of Education. AAUW's research uses the Baccalaureate
and Beyond Longitudinal Study, a nationally representative data set of
college graduates produced by the Department of Education. This data
set is unique because it is designed to follow bachelor's degree
recipients as they navigate the workplace, graduate school and other
life changes such as having a family. The research examines two sets of
college graduates: men and women who graduated in 1999-2000, and men
and women who graduated in 1992-93; we also limited our analysis to
those who earned their first bachelor's degree at age 35 or younger.
The 1999-2000 graduates were chosen because they were the most
recent graduates interviewed in the year after graduation. By looking
at earnings just one year out of college, we believe you have as level
a playing field as possible. These employees don't have a lot of work
experience and, for the most part, don't have caregiving obligations,
so you'd expect there to be very little difference in the wages of men
and women. The 1992-1993 graduates were chosen so that we could analyze
earnings ten years after graduation.
The pay gap can only be partially explained by differences in
personal choices. Despite some gains, many majors remain strongly
dominated by one gender. Female students are concentrated in majors
that are associated with lower earnings, such as education, health, and
psychology. Male students dominate the higher-paying majors:
engineering, mathematics, physical sciences, and business. Both women
and men who majored in ``male-dominated'' majors earn more than those
who majored in ``female-dominated'' or ``mixed-gender'' majors.
The choice of major is not the full story, however, as a pay gap
between recently graduated women and men is found in nearly every field
and in every occupation. Women full-time workers earn less than men
full-time workers in nearly every major, although the size of the gap
varies. In education, a female-dominated major and occupation, women
earn 95 percent as much as their male colleagues earn. In biology, a
mixed-gender field, women earn only 75 percent as much as men earn,
just one year after graduation.
The kinds of jobs that women and men accept also account for a
portion of the pay gap. While the choice of major is related to
occupation, the relationship is not strict. For example, some
mathematics majors teach, while others work in business or computer
science. It is important to bear in mind that such choices themselves
can be constrained in part by biased assumptions regarding appropriate
career paths for men and women. Other differences in type of jobs also
affect earnings. For example, women are more likely than men to work in
the nonprofit and public sectors, where wages are typically lower than
in the for-profit sector.
AAUW's analysis showed that men and women's different choices can
explain only some of the pay gap. After controlling for factors like
major, occupation, industry, sector, hours worked, workplace
flexibility, experience, educational attainment, enrollment status,
GPA, institution selectivity, age, race/ethnicity, region, marital
status and children, a five percent difference in the earnings of male
and female college graduates is unexplained. It is reasonable to assume
that this difference is the product of discrimination.
Discrimination is difficult to measure directly. It is illegal, and
furthermore, most people don't recognize discriminatory behavior in
themselves or others. This research asked a basic but important
question: If a woman made the same choices as a man, would she earn the
same pay? The answer is no.
Ten years after graduation, the pay gap widens. AAUW's analysis
found that, ten years after graduation, the pay gap widened--so much so
that female full-time workers earned only 69 percent of what their male
peers earned.
Ten years out, the pay gap within occupations also increased. For
example, in engineering and architecture, where wages were at parity
one year out of college, we now see that women earn only 93 percent of
what their male counterparts earn. In business and management, the pay
gap widens, with women earning 69 percent of men's wages, compared to
81 percent one year out. Strikingly, women did not make gains in any
fields compared to their male counterparts.
Similar to what we saw one year out of college, this pay gap can
only partially be explained as a result of women's characteristics and
choices. In terms of occupation, women and men remained segregated in
the workforce over time, and the difference in earnings among
occupations grew over this time period. Women also continued to be much
more likely to work in the lower-paying non-profit sector. Among full-
time workers, women reported working fewer hours than men, and their
employment and experience continuity also differed from men. These
choices were associated with wage penalties.
It is important to note that what we are calling women's
``choices'' are often constrained and need to be looked at in context.
When women earn less most couples are likely to prioritize the higher-
earning husband's well-being and career path in relation to child care,
choice of residence, and other household decisions. When women are
married, this trade-off may be worthwhile; however, nearly one half of
women did not live with a husband in 2005.\9\ While most women marry at
some point, most also spend a large part of their lives on their own.
Women are also much more likely than men to be single parents.\10\
Therefore the presumption of the presence of a higher earning mate is
often a false one. It is important for us to remember that lower pay
for women means fewer resources for their children today and women's
retirement tomorrow.
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\9\ AAUW Educational Foundation. (2007). Behind the Pay Gap, by
Catherine Hill and Judy Goldberg Dey. Washington, DC.
\10\ American Community Survey; http://factfinder.census.gov/
servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2005_EST_G00_S1101&-
ds_name=ACS_2005_EST_G00_
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Women are investing in higher education, but not receiving the same
salaries as men. Choices made in college affect earnings ten years
later. College selectivity matters for men and women, but gender
differences were more pronounced. Strikingly, a woman who earned a
degree from a highly selective institution had lower earnings than men
with degrees from highly selective institutions or moderately selective
schools, and about the same pay as a man who attended a minimally
selective college. Both women and men invest a great deal of financial
resources in their college educations, and often graduate with
substantial student loans. AAUW's research suggests that a woman's
investment in attending a highly selective school--which is typically
more expensive--does not pay off for her in the same way it does for
her male counterparts.\11\ Further, because of the pay gap, women often
have a harder time paying off their student loans.
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\11\ AAUW Educational Foundation. (2007). Behind the Pay Gap, by
Catherine Hill and Judy Goldberg Dey. Washington, DC.
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Ten years out, the unexplained portion of the pay gap widens.
AAUW's analysis showed that while choices mattered, they explained even
less of the pay gap ten years after graduation. Controlling for a
similar set of factors, we found that ten years after graduation, a
twelve percent difference in the earnings of male and female college
graduates is unexplained and attributable only to gender.
The pay gap among full-time workers understates the lifetime
difference in the earnings of women and men. The impact of personal
choices such as parenting has profoundly different effects on men and
women. Ten years after graduation, 23 percent of mothers in this sample
were out of the work force, and 17 percent worked part-time. Among
fathers, only 1 percent were out of the work force, and only 2 percent
worked part-time. Stay-at-home dads in this study appear to be a rare
breed. We know that most mothers return to the workforce, and hence it
is reasonable to assume that the pay gap between men and women will
widen as mothers return to full-time employment, driving down average
earnings for women.
Interestingly, motherhood is not the driving factor behind the wage
gap among women working full-time ten years after graduation.\12\ That
is, mothers who were in the workforce full-time did not earn less than
other women also working full-time, controlling for other factors such
as occupation and major.
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\12\ This is in keeping with research that shows that a
``motherhood penalty'' applies to most women but less to women who
maintain continuous work force attachment (Lundberg & Rose, 2000).
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the search for solutions to the pay gap
First, it must be publicly recognized as a serious problem. Too
often, both women and men dismiss the pay gap as simply a matter of
differing personal choices. While choices about college major and jobs
can make a difference, individuals cannot simply avoid the pay gap by
making different choices. Even women who make the same occupational
choices as men will not end up with the same earnings. If ``too many''
women make the same occupational choice, resulting in job segregation,
earnings can be expected to decline.
Women's progress throughout the past 30 years attests to the
possibility of change. Before the Equal Pay Act of 1963, Title IX of
the Education Amendments of 1972, Title VII of the Civil Rights Act of
1964, and the Pregnancy Discrimination Act of 1978, employers could--
and did--refuse to hire women for occupations deemed ``unsuitable,''
fire women when they became pregnant, openly pay differently based on
sex, or limit women's work schedules simply because they were female.
Schools could--and did--set quotas for the number of women admitted or
refuse women admission altogether. In the decades since these civil
rights laws were enacted, women have made remarkable progress in fields
such as law, medicine, and business. Thirty years ago the pay gap was
attributed to the notion that women's education and skills just didn't
``measure up.'' If that was ever the case, it certainly isn't true now.
Unfortunately, women's educational gains--ironically likely
motivated in part by women's desire for economic security \13\--have
not translated into equal pay for women in the workforce. In fact,
while a college degree does absolutely increase women's earnings, the
pay gap remains larger for college graduates than the population as a
whole.\14\
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\13\ DiPrete, Thomas A., & Claudia Buchmann. (2006, February).
Gender-specific trends in the value of education and the emerging
gender gap in college completion. Demography, 43(1), 1-24.
\14\ Authors calculation from tables produced by the U.S.
Department of Labor, Bureau of Labor Statistics. (2006). Median Usual
Weekly Earnings, Employed Full Time, Wage and Salary Workers, 25 Years
and Older. Retrieved April 16, 2007, from http://www.bls.gov/cps/.
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AAUW's research report provides strong evidence that sex
discrimination still exists in the workplace and that this
discrimination is not disappearing on its own. It's clear that existing
laws have failed to end the inequities that women face in the
workplace. AAUW believes we must take stronger steps to address this
critical issue. While enactment of the Lilly Ledbetter Fair Pay Act was
a critical first step, restoring the ability of working women to have
their day in court to combat wage discrimination, additional
legislation is needed to truly make real progress on pay equity.
the paycheck fairness act
AAUW applauds Congress and the Obama Administration for moving
quickly to pass the Ledbetter Fair Pay Act. However, the Ledbetter bill
is only a down payment on the real change needed to close the pay gap.
The next critical step is for the Senate to pass the Paycheck Fairness
Act (S. 182/H.R. 12); the House already passed the measure in January
2009 by an even stronger vote (256-163) than the Ledbetter bill (247-
171).
Passing both bills is critical to the overall goal of achieving pay
equity for all. The Lilly Ledbetter Fair Pay Act amended Title VII of
the Civil Rights Act of 1964 and righted the wrongs done by the Supreme
Court, regaining ground we'd lost. Ledbetter was a narrow fix that
simply returned legal practices and EEOC policies to what they were the
day before the Ledbetter decision was issued in 2007--nothing more,
nothing less. The Paycheck Fairness Act is a much needed update of the
45-year-old Equal Pay Act, closing longstanding loopholes and
strengthening incentives to prevent pay discrimination. Together, these
bills can help to create a climate where wage discrimination is not
tolerated, and give the administration the enforcement tools it needs
to make real progress on pay equity.
background on the equal pay act of 1963
This law requires that men and women be given equal pay for equal
work in the same place of business or establishment. The jobs do not
have to be identical, but they must be substantially equal. It is job
content--not job titles--that determines whether jobs are substantially
equal. Pay differentials are permitted only when they are based on
seniority, merit, quantity or quality of production, or a factor other
than sex. It is important to note that when correcting a pay
differential, no employee's pay may be reduced. Instead, the pay of the
lower paid employee(s) must be increased. While laudable in its goals,
the Equal Pay Act of 1963 has never lived up to its promise to provide
``equal pay for equal work.''
what will the paycheck fairness act do?
The Paycheck Fairness Act is a comprehensive bill that strengthens
the Equal Pay Act by taking meaningful steps to create incentives for
employers to follow the law, empower women to negotiate for equal pay,
and strengthen federal outreach and enforcement efforts. The bill would
also deter wage discrimination by strengthening penalties for equal pay
violations, and by prohibiting retaliation against workers who inquire
about employers' wage practices or disclose their own wages. The
Paycheck Fairness Act would:
Close a Loophole in Affirmative Defenses for Employers:
The legislation clarifies acceptable reasons for differences in pay by
requiring employers to demonstrate that wage gaps between men and women
doing the same work have a business justification and are truly a
result of factors other than sex.
Fix the ``Establishment'' Requirement: The bill would
clarify the establishment provision under the Equal Pay Act, which
would allow for reasonable comparisons between employees within clearly
defined geographical areas to determine fair wages. This provision is
based on a similar plan successfully used in the state of Illinois.
Prohibit Employer Retaliation: The legislation would
deter wage discrimination by prohibiting retaliation against workers
who inquire about employers' wage practices or disclose their own
wages. (NOTE: Employees with access to colleagues' wage information in
the course of their work, such as human resources employees, may still
be prohibited from sharing that information.) This non-retaliation
provision would have been particularly helpful to Lilly Ledbetter,
because Goodyear prohibited employees from discussing or sharing their
wages. This policy delayed her discovery of the discrimination against
her by more than a decade.
Improve Equal Pay Remedies: The bill would deter wage
discrimination by strengthening penalties for equal pay violations by
providing women with a fair option to proceed in an opt-out class
action suit under the Equal Pay Act, and allowing women to receive
punitive and compensatory damages for pay discrimination. The bill's
measured approach levels the playing field by ensuring that women can
obtain the same remedies as those subject to discrimination on the
basis of race or national origin.
Increase Training, Research and Education: The
legislation would authorize additional training for Equal Employment
Opportunity Commission staff to better identify and handle wage
disputes. It would also aid in the efficient and effective enforcement
of federal anti-pay discrimination laws by requiring the EEOC to
develop regulations directing employers to collect wage data, reported
by the race, sex, and national origin of employees. The bill would also
require the U.S. Department of Labor to reinstate activities that
promote equal pay, such as: directing educational programs, providing
technical assistance to employers, recognizing businesses that address
the wage gap, and conducting and promoting research about pay
disparities between men and women.
Establish Salary Negotiation Skills Training: The bill
would create a competitive grant program to develop salary negotiation
training for women and girls.
Improve Collection of Pay Information: The bill would
also reinstate the Equal Opportunity Survey, to enable targeting of the
Labor Department's enforcement efforts by requiring all federal
contractors to submit data on employment practices such as hiring,
promotions, terminations and pay. This survey was developed over two
decades and three presidential administrations, was first used in 2000,
but was rescinded by the Department of Labor in 2006.
The Paycheck Fairness Act maintains the protections currently
provided to small businesses under the Equal Pay Act, and updates its
remedies and protections using familiar principles and concepts from
other civil rights laws. These new provisions are not onerous and are
well-known to employers, the legal community, and the courts. As a
result, the legislation will enhance women's civil rights protections
while simultaneously protecting the job-creating capacity of small
businesses. That's why--in addition to AAUW and almost 300 other
organizations--groups such as Business and Professional Women/USA and
the U.S. Women's Chamber of Commerce support the Paycheck Fairness Act.
despite progress, the pay gap remains
Despite the progress that women have made, pay equity still remains
out of reach and partly unexplained. Even government economists say
that a portion of the pay gap remains a mystery even after adjusting
for women's life choices. Skeptics like to claim that there is no real
pay gap--that somehow it's all a product of our imaginations. Worse,
these critics prefer to blame women for any pay disparities, saying
that the pay gap is due to the ``choices'' that women make. But excuses
are excuses, and facts are facts.
Women are working harder than ever to balance the roles of work and
family. They've developed and supported successful legislation that has
opened doors and helped to keep them in the workforce while they raise
their children. When women don't earn equal pay, they're not the only
ones to suffer--their families do, too. In these days when two incomes
are needed to make ends meet, and where female-headed households are so
much more likely to be poor, it is disturbing how maternal profiling is
used to undercut women's wages because of their caregiving roles. It is
also ironic and short sighted in a nation that needs women's labor to
be competitive in a global economy.
One popular argument is that motherhood (and the choices it
engenders)--rather than discrimination--is the real culprit behind the
pay gap. If that's the case, then we have much larger problems than the
pay gap to deal with. If that's true, then this country--including its
policy makers--needs to take a long, hard look at why the marketplace
punishes women for being mothers--or as AAUW's research has showed, for
simply their potential to be mothers--while fatherhood carries no
financial risk when it comes to wages and may in fact carry financial
benefits.
Here's the bottom line: There's a pay gap that most economists
agree can't be explained away completely by women's choices--no matter
how convenient, no matter how comfortable, no matter how much easier it
would be for the critics if they could do so. And we ignore it at our
peril.
AAUW plans to continue to take an active role in challenging the
persistent inequity in women's paychecks, by unmasking the real root
causes of the issue, relying on facts over inflated rhetoric, and by
urging the creation of more workplaces that are supportive of all
employees with family responsibilities, regardless of gender. We also,
quite strongly, urge the Senate to join the House and pass the Paycheck
Fairness Act.
Collectively, women have demonstrated that they have the skills and
the intelligence to do any job. Women have also shown they can do these
jobs while minding the home front and raising the next generation. No
one is disputing that women have made significant gains in education
and labor force participation. In fact, AAUW revels in them and our
role in making them happen. But our work is not done, and pay equity
remains a pernicious problem with both daily and long term
consequences. It's past time for women's paychecks to catch up with our
achievements.
__________
Prepared Statement of Diana Furchtgott-Roth
Ms. Chairwoman, members of the Committee, I am honored to be
invited to testify before your Committee today on the subject of the
pay gap between men and women. I have followed and written about this
and related issues for many years. I am the coauthor of two books on
women in the labor force, ``Women's Figures: An Illustrated Guide to
the Economic Progress of Women in America,'' and ``The Feminist
Dilemma: When Success Is Not Enough.''
Currently I am a senior fellow at the Hudson Institute. From
February 2003 until April 2005 I was chief economist at the U.S.
Department of Labor. From 2001 until 2003 I served at the Council of
Economic Advisers as chief of staff and special adviser. Previously, I
was a resident fellow at the American Enterprise Institute. I have
served as Deputy Executive Secretary of the Domestic Policy Council
under President George H. W. Bush.
One of the concerns of working women is the ``pay gap''--the
alleged payment to women of 78 cents for every dollar earned by a man.
However, men and women generally have equal pay for equal work now--if
they have the same jobs, responsibilities, and skills. Members of
Congress are paid identically regardless of gender, as are many other
men and women with the same job. Two entry-level cashiers at a
supermarket, one male and one female, are usually paid the same, as are
male and female first-year associates at law firms. If they believe
they are underpaid, they can sue for discrimination under current law.
The 78 percent figure comes from comparing the 2007 full-time
median annual earnings of women with men, the latest year available
from the Census Bureau.\1\ The 2007 Department of Labor data show that
women's full-time median weekly earnings are 80 percent of
men's.\2,\\3\ Just comparing men and women who work 40 hours weekly,
without accounting for differences in jobs, training, or time in the
labor force, yields a ratio of 87.2 percent.\4\
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\1\ DeNavas-Walt, Carmen, Bernadette D Proctor, and Jessica C
Smith, U.S. Census Bureau, ``Table A-2. Real Median Earnings of Full-
Time, Year-Round Workers by Sex and Female-to-Male Earnings Ratio: 1960
to 2007'', Income, Poverty, and Health Insurance Coverage in the United
States: 2007, Washington, DC: U.S. Government Printing Office, 2008, p.
38.
\2\ U.S. Department of Labor Bureau of Labor Statistics, Women in
the Labor Force: A Databook, Washington, DC, December 2008, p. 1.
\3\ BLS uncompiled 2008 data on weekly earnings yield an earnings
ratio of 79.9 percent.
\4\ Bureau of Labor Statistics, ``Median usual weekly earnings of
wage and salary workers by hours usually worked and sex, 2007 annual
averages--continued'', Highlights of Women's Earnings in 2007,
Washington, DC, October 2008, p. 41. Statistic refers to workers who
usually work exactly 40 hours a week.
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These wage ratios are computed from aggregate government data and
do not take into account differences in education, job title and
responsibility, regional labor markets, work experience, occupation,
and time in the workforce. When economic studies include these major
determinants of income, rather than simple averages of all men and
women's salaries, the pay gap shrinks even more. A report by Jody Feder
and Linda Levine of the Congressional Research Service entitled ``Pay
Equity Legislation in the 110th Congress,'' \5\ declared that
``Although these disparities between seemingly comparable men and women
sometimes are taken as proof of sex-based wage inequities, the data
have not been adjusted to reflect gender differences in all
characteristics that can legitimately affect relative wages (e.g.
college major or uninterrupted years of employment).''
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\5\ Jody Feder and Linda Levine, ``Pay Equity Legislation in the
110th Congress,'' CRS Report for Congress RL31867, Washington, DC:
Congressional Research Service, Updated January 5, 2007.
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Many academic studies of gender discrimination focus on the
measurement of the wage gap. Dozens of studies have been published in
academic journals over the past two decades. These studies attempt to
measure the contributing effects of all the factors that could
plausibly explain the wage gap through an econometric technique called
regression analysis. The remaining portion of the wage gap that cannot
be explained by measurable variables is frequently termed
``discrimination.'' Generally, the more explanatory variables that are
included in the econometric regression analysis, the more of the wage
gap that can be explained, and the less is the residual portion
attributable to ``discrimination.'' An analysis that omits relevant
variables finds a greater unexplained residual.
However, simple wage ratios do not take into account other
determinants of income. They are computed using purely mathematical
calculations of U.S. labor market data published by the Bureau of Labor
Statistics of the U.S. Department of Labor. Comparisons of men's and
women's wages need to be made carefully, because there are differences
in hours worked by men and women.
Let's take an example of how regression analysis allows us to
distinguish different factors that affect earnings. A female nurse
might earn less than a male orthopedic surgeon. But this would not be
termed ``unfair'' or ``discrimination'' because the profession of
surgeon requires more years of education, the surgeon might work
different hours from the nurse, and the nurse might have fewer
continuous years of work experience due to family considerations.
The standard literature in analyzing wage gaps between men and
women is centered on measuring these varying factors. Professors such
as Francine Blau and Lawrence Kahn,\6\ Charles Brown and Mary
Corcoran,\7\ David Macpherson and Barry Hirsch,\8\ and Jane Waldfogel
\9\ all take these factors into account to a greater or lesser degree.
There are no peer-reviewed academic studies that measure the wage gap
between men and women without using regression analysis to account for
the major factors affecting wages.
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\6\ Francine D. Blau and Lawrence M. Kahn, ``The US Gender Pay Gap
in the 1990s: Slowing Convergence,'' National Bureau of Economic
Research, Working Paper 10853, October 2004.
\7\ Charles Brown and Mary Corcoran, ``Sex-Based Differences in
School Content and the Male/Female Wage Gap,'' Journal of Labor
Economics 15 (July 1997 Part 1): 431-65.
\8\ David A. Macpherson and Barry T. Hirsh, ``Wages and Gender
Composition: Why Do Women's Jobs Pay Less?'' Journal of Labor Economics
13 (July 1995): 426-71.
\9\ Jane Waldfogel, ``Working Mothers Then and Now: A Cross-Cohort
Analysis of the Effects of Maternity Leave on Women's Pay,'' in Gender
and Family Issues in the Workplace, edited by Francine D. Blau and
Ronald G. Ehrenberg (New York: Russell Sage Foundation, 1997).
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To take one study as an example, Professor June O'Neill, in an
article published in 2003 in the economics profession's flagship
journal The American Economic Review,\10\ shows that the observed
unadjusted wage ratio between women and men in 2000 is 78.2 percent.
When data on demographics, education, scores on the Armed Forces
Qualification Test, and work experience are added, the wage ratio rises
to 91.4. The addition of variables measuring workplace and occupational
characteristics, as well as child-related factors, causes the wage
ratio to rise to 95.1 percent. When the percentage female in the
occupation is added, the wage ratio becomes 97.5 percent, an
insignificant difference.
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\10\ June O'Neill, ``The Gender Gap in Wages, Circa 2000,''
American Economic Review, Vol. 93, No.2, Papers and Proceedings of the
One Hundred Fifteenth Annual Meeting of the American Economic
Association, Washington, D.C., January 3-5, 2003 (May 2003), 309-314.
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In another study, Professors Marianne Bertrand of the University of
Chicago and Kevin Hallock of Cornell University found almost no
difference in the pay of male and female top corporate executives when
accounting for size of firm, position in the company, age, seniority,
and experience.\11\
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\11\ Marianne Bertrand and Kevin Hallock, ``The Gender Gap in Top
Corporate Jobs,'' Industrial and Labor Relations Review, October 2001.
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Lower pay can reflect decisions--by men and women--about field of
study, occupation, and time in the workforce. Those who don't finish
high school earn less. College graduates who major in humanities rather
than the sciences have lower incomes. More women than men choose
humanities majors.
Employers pay workers who have taken time out of the work force
less than those with more experience on the job, and many women work
less for family reasons. A choice of more time out of the workforce
with less money rather than more time in the workforce with more income
is not a social problem. A society that gives men and women these
choices, as does ours, is something to applaud.
Nevertheless, we need to do all we can to level the playing field
so that women are not discouraged by our institutions from dropping out
of the workforce. One change that has been proposed is to allow the top
tax rate to rise. This would adversely affect married women because
their incomes are frequently secondary. It would not only discourage
marriage, but also discourage married women from working.
Take a nurse, Amanda, with taxable income of $50,000, who wants to
marry Henry, who owns an electrical supply store and has taxable income
of $160,000. Amanda's taxable income as a nurse is $50,000. Unmarried,
he is in the 28% bracket and she is in the 25% bracket. When they get
married, they will be taxed at 33%--rising to 36% in 2011 if Congress
allows taxes to rise in 2011.
By raising taxes on upper-income Americans, Congress would worsen
our tax system's marriage penalty on two-earner married couples, and
Amanda and Henry would pay even more tax married than single.
In President Obama's new budget for 2010, he outlined plans to
allow the top two tax rates to rise from 33% to 36% and from 35% to
39.6% in 2011. In addition, taxpayers in these brackets would not
receive the full value of their itemized deductions, further
exacerbating the fiscal disadvantages of marriage for some couples.
Taxes would rise for singles with taxable income over $172,000 and
married couples over $209,000. Even if Amanda and Henry were not
immediately affected by higher rates, those rates might well affect
Amanda when she earned more.
Unless, of course, Amanda and Henry decide to have children, and
Amanda left the workforce to care for them. Say that Amanda's taxable
income rose to $60,000, so she and Henry had a combined income of
$220,000, placing them in the new 36% bracket. But with Amanda at home
looking after the children, their federal tax rate would be 28%.
And federal taxes are not the whole story. State taxes would take
another 9% of Henry and Amanda's income in states such as Oregon,
Vermont and Iowa; Medicare would take another 1.45%; and Social
Security taxes would add another 6.2% up to $107,000.
Our tax system should not make it harder for women to work. The
penalty falls most heavily on married women who have invested in
education, hoping to shatter glass ceilings and compete with men for
managerial jobs, and the higher taxes would exacerbate the penalty.
When mothers take jobs, earnings are reduced by taxes paid at their
husbands' higher rates, in addition to costs for childcare and
transportation. This discourages married women not just from working,
but also from striving for promotions, from pursuing upwardly-mobile
careers. Mothers are more affected by the marriage penalty than other
women because they are more likely to move out of the labor force to
look after newborn children and toddlers, and then to return to work
when their children are in school.
It does not have to be this way. Congress could leave taxes as they
are now, with a flatter structure of rates, so that couples do not face
higher rates upon marriage.
Labor Department data show that as average number of earners per
household rise, so do income levels. One characteristic of the highest-
earning one-fifth of households is that they have an average of two
earners per household. The middle fifth averages 1.4 earners per
household, and the lowestearning fifth averages half an earner per
household--more part-time and unemployed workers, or retirees.
Therefore, when workers marry, more households move into the top
fifth of the income distribution. When Congress tries to raise taxes on
top earners then working women are disproportionately affected, even
if, like Amanda, they do not earn much by themselves. For Congress to
announce that taxes on those at the top end of the scale will rise is
an explicit attack on married working women.
Thank you for giving me the opportunity to appear before you today.
I would be glad to answer any questions.