[Joint House and Senate Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 111-789
NEW EVIDENCE ON THE GENDER PAY GAP FOR WOMEN AND MOTHERS IN MANAGEMENT
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HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 28, 2010
__________
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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 Jeff Bingaman, New Mexico
Loretta Sanchez, California Amy Klobuchar, Minnesota
Elijah E. Cummings, Maryland Robert P. Casey, Jr., Pennsylvania
Vic Snyder, Arkansas Jim Webb, Virginia
Kevin Brady, Texas Mark R. Warner, Virginia
Ron Paul, Texas Sam Brownback, Kansas, Ranking
Michael C. Burgess, M.D., Texas Minority
John Campbell, California Jim DeMint, South Carolina
James E. Risch, Idaho
Robert F. Bennett, Utah
Andrea Camp, Executive Director
Jeff Schlagenhauf, Minority Staff Director
C O N T E N T S
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Members
Hon. Carolyn B. Maloney, Chair, a U.S. Representative from New
York........................................................... 1
Hon. Kevin Brady, a U.S. Representative from Texas............... 3
Witnesses
Dr. Andrew Sherrill, Director of Education, Workforce, and Income
Security, U.S. Government Accountability Office................ 5
Ms. Ilene H. Lang, President & Chief Executive Officer, Catalyst. 7
Dr. Michelle J. Budig, Associate Professor of Sociology,
University of Massachusetts.................................... 9
Ms. Diana Furchtgott-Roth, Senior Fellow, Hudson Institute....... 11
Submissions for the Record
Prepared statement of Representative Carolyn B. Maloney, Chair... 30
Prepared statement of Representative Kevin Brady................. 31
Prepared statement of Dr. Andrew Sherrill........................ 33
Prepared statement of Ms. Ilene H. Lang.......................... 84
Prepared statement of Dr. Michelle J. Budig...................... 107
Prepared statement of Ms. Diana Furchtgott-Roth.................. 117
Prepared statement of Representative Elijah E. Cummings.......... 183
NEW EVIDENCE ON THE GENDER PAY GAP FOR WOMEN AND MOTHERS
IN MANAGEMENT
----------
TUESDAY, SEPTEMBER 28, 2010
Congress of the United States,
Joint Economic Committee,
Washington, DC.
The committee met, pursuant to call, at 9:07 a.m. in Room
106 of the Dirksen Senate Office Building, The Honorable
Carolyn B. Maloney (Chair) presiding.
Representatives present: Maloney, Cummings, and Brady.
Senators present: Bingaman.
Staff present: Andrea Camp, Gail Cohen, Colleen Healy,
Elisabeth Jacobs, Jessica Knowles, Rachel Greszler, Ted Boll,
and Robert O'Quinn.
OPENING STATEMENT OF THE HONORABLE CAROLYN B. MALONEY, CHAIR, A
U.S. REPRESENTATIVE FROM NEW YORK
Chair Maloney. The Committee will come to order, and I
welcome all the witnesses and my colleague from the other side
of the aisle, Mr. Brady, and I will begin with my opening
statement.
Good morning. Today's hearing on the gender gap among
managers is part of the Joint Economic Committee's in-depth
look at women in the work place. Women's work is crucial for
families' economic well-being, particularly in these tough
economic times.
Women comprise nearly half of the workforce, and families
are increasingly dependent on working wives' incomes, with
working wives now contributing 36 percent of household income,
compared to 29 percent in 1983.
Because of this, gains in women's earning power or the
absence of progress on that front is a very important economic
security issue for American families. Women earn just 77 cents
on the dollar as compared to men for doing the exact same work.
That figure hasn't budged in nearly ten years.
The report released today by the GAO provides additional
evidence of the persistence of the gender gap at the highest
echelons of industry. The GAO finds a striking pay gap between
male and female managers. In 2007, female managers were paid 81
cents for every dollar earned by their male manager peers, even
after accounting for measurable differences like age,
education, and industry.
The pay gap for women in management shrank by just two
cents from 2000 to 2007. In short, and in no uncertain terms,
we are stalled out. No matter how you slice the data, the pay
gap between male and female managers persists.
Even among childless managers, women earn just 83 cents for
every dollar earned by their male peers. Both the GAO and
Catalyst also find that we have made very little progress in
breaking the glass ceiling for women in management.
Women's representation in management professions in 2007
was essentially unchanged from 2000, and motherhood continues
to be a penalty for women in the workforce. A previous GAO
report showed that fathers enjoy a bonus, while mothers pay a
penalty for their decisions to have children. I like to call
this the ``mom bomb.''
Today's GAO report shows that management moms earn just 79
cents for every dollar earned by management dads, a figure that
has not budged since 2000. In all but one industry, fathers are
more likely than mothers to be managers. When working women
have children, they know it will change their lives, but they
are stunned at how much it changes their paychecks.
While women's earnings are a crucial element of families'
economic security, this is particularly true for families where
the wife is a manager. Across all industries, married female
managers are just like male managers in one key regard: they
are their families' majority breadwinners.
But married male managers' paychecks represent about 75
percent of their families' total earnings, compared to the 55
percent of total family earnings represented by married female
managers' paychecks. 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.
In order to further our understanding of the gender pay gap
across the economic spectrum, I am pleased to announce today
that I will be requesting a new report from GAO investigating
gender pay and representation issues among lower-wage workers.
The GAO research team provides a great service to our
nation with their impartial data-driven analysis of pressing
economic problems, and I look forward to learning more from
them when this report is issued next year.
Women are more productive and better-educated than they
have ever been, but their pay has not yet caught up. Women
continue to bump up against everything from subtle biases to
acts of discrimination relating to gender stereotypes about
hiring, pay raises, promotions, pregnancy, and caregiving
responsibilities.
The first piece of legislation that President Obama signed
into law, the Lilly Ledbetter Act, 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 the co-sponsor of the Paycheck Fairness Act, which
passed the House earlier this session, and I hope that the
Senate will soon act on it.
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 upwardly mobile in their careers, protecting their
earnings.
The Working Families Flexibility Act, which I have
sponsored with the late Senator Kennedy, would do just that,
and I am pleased to announce that just last week, Senator Casey
introduced a version similar to this act in the Senate. I would
like to thank today's panel, and I look forward very much to
your testimony. I recognize my colleague and very good friend,
Mr. Brady.
[The prepared statement of Representative Maloney appears
in the Submissions for the Record on page 30.]
OPENING STATEMENT OF THE HONORABLE KEVIN BRADY, A U.S.
REPRESENTATIVE FROM TEXAS
Representative Brady. Thank you Madam Chairman. I'm pleased
to join with you to welcome our panelists before the Committee
this morning, and I would ask unanimous consent that my
statement be entered in the record in full.
Chair Maloney. No objection.
Representative Brady. I support equal compensation for men
and women, and our nation's laws that are in place to ensure
women are not discriminated against in the work place. Where
lax enforcement of our laws may exist, Congress should fulfill
its duty in its role in conducting proper oversight, and I
appreciate the Chairwoman's sponsoring of this hearing today.
Back home, we have a number of women entrepreneurs, women
in management, women in the workforce, who talk to me mainly
today about jobs, the economy, and about stretching their
family budget further. They are concerned about this economy.
They have seen since the beginning of the year our economic
growth has dropped by two-thirds. We are beginning to stall out
again in our recovery. At a time when we ought to be adding
jobs, we're continuing to lose them.
Small businesses are not hiring. They're continuing to lay
off, and consumer confidence is at an 18-month low. We've given
back all the consumer confidence from the last year and a half.
The stimulus has not worked to jump-start the economy. It
certainly has not worked to restore consumer confidence, and
businesses are holding--many of them led or with women in key
management positions--are holding onto more than $2 trillion of
cash that ought to be going toward rehiring new workers, the
old workers, hiring new ones, making new investments, adding
net new sales force.
They're not doing that, and what they tell us, both small
businesses and large, that they're frightened by what they see
coming out of Washington these days. They see continued talk of
higher taxes, more regulation. They're concerned about the
health care bill driving up health care costs, its impact on
their small businesses, very concerned about higher energy
prices from cap and trade, and now they're facing in January,
January 1st, a nearly $4 trillion tax bomb that will go off,
affecting every person in America. Families who are trying to
balance their budgets, small businesses who are trying to
survive this recession.
We see women are now the fastest-growing among
entrepreneurs. I was a Chamber of Commerce executive before
coming to Congress, so I got to see firsthand how women are the
leading entrepreneurs among our small businesses. Women and
minority-owned businesses are really the catalysts for new
small business creation in this country. They are for the first
time, as a generation, building wealth, and they're concerned
about the death tax coming back, springing back to full life
January 1st, which will make it very difficult for them to pass
their small business and their wealth back down to their
children and their grandchildren.
I don't know how anyone could believe that the way to jump-
start our stalled economy is to heap new taxes on the very
professions and small businesses most critical to a recovery.
That doesn't make economic sense, and I don't think refusing to
hold a vote, just a straight up or down vote, on extending the
tax cuts, so there is not a tax increase on professions, small
businesses, on capital gains and dividends is right.
I just think leaving Congress without letting the will of
Congress be held and be known, to put lawmakers on the record
of whether they support these tax increases or not, whether
they're serious about jump-starting the economy, I think,
really is irresponsible. I'm hopeful that maybe this hearing,
maybe others, where we feature again the challenges of women in
the workforce, building wealth, of retaining their hard work
and being rewarded for it will encourage an up or down vote.
I'm hopeful perhaps any effort we can make to encourage an
up or down vote this week before we leave, I think, would be
helpful. With that, I yield back.
[The prepared statement of Representative Brady appears in
the Submissions for the Record on page 31.]
Chair Maloney. I thank the gentleman for being here. We are
focusing today on an important report that just came out of the
GAO, but I need to respond to my good friend and colleague's
revisionist history on where our economy is. He seems to have
amnesia, and does not remember that the last month that former
President Bush was in office, this country lost 790,000 jobs.
Because of the policies that were put in place during his
eight years, we had a continued loss of jobs, down to what I
call the ``red valley.'' Since President Obama took office, we
have been moving in the right direction. It is not success, but
it is definitely progress. For the past eight months, this
country has gained jobs in the private sector, which is the
true indicator of economic recovery.
President Obama's actions, along with the Recovery Act,
helped start moving us in the right direction. Economists Alan
Blinder from Princeton University and Mark Zandi, who was
McCain's economist--he works for the private sector for
Moody's, he's a forecaster--they came out with a joint report
saying that if President Obama and the Democrats had not taken
the steps that they did to start moving our economy in the
right direction, this country would have lost an additional 8.5
million jobs and would have been thrust not into the great
recession, which we are suffering in now, but into a Great
Depression.
With the actions of the Obama Administration to stabilize
our financial markets, to bring reform to them, we avoid the
risk of taxpayers having to invest in bailouts in the future.
Actions such as the HIRE Act give a tax credit to businesses
that hire unemployed workers. And you know from the testimony
that we heard before this Committee that a tax credit was one
of the prime goals that economists said would help us move in
the right direction.
Just last week the Senate passed and the President signed
into law an important bill that we passed in the House earlier,
a $30 billion loan fund for small businesses, directed to small
businesses, to help them expand, to hire. What we're hearing on
both sides of the aisle is that our small businesses do not
have access to credit. This money will be solely for credit to
small businesses directed through community banks and regional
banks, with other tax incentives and breaks to try to get this
economy moving in a stronger direction.
History speaks for itself. The facts speak for themselves.
I would certainly take the initiatives and trends that we're
seeing now over the long line of policies that led us to the
deep, red valley. But today is not a time for this type of
debate. Women comprise half of our population. The new GAO and
Catalyst studies are very disturbing, and we plan to hear more
about them today.
I thank our witnesses for being here, and I would like to
introduce them, and thank them for their life's work and for
being here today. Dr. Andrew Sherrill is a Director of
Education, Workforce, and Income Security Issues at the U.S.
Government Accountability Office. He oversees the GAO's work on
worker protection and workforce development issues, and has
worked there for 19 years. He has led GAO teams in producing
reports to Congress on topics including the gender pay gap,
compensation for nuclear weapons facilities, and welfare
reform, among many other topics.
Ms. Ilene Lang is the President and Chief Executive Officer
of Catalyst, the leading research and advisory organization
working to build inclusive work places and expand opportunities
for women in business. She was appointed President in August of
2003, and named CEO in September of 2008. She was the founding
CEO of AltaVista Software, a subsidiary of Digital Equipment
Corporation.
She was named to the Global Agenda Council on the Gender
Gap at the World Economic Forum, and she is a member of the
National Board Development Committee of the Girl Scouts of the
USA.
Dr. Michelle Budig is an associate professor of Sociology
and the associate director of the Social and Demographic
Research Institute at the University of Massachusetts. She has
published work on gender differences leading to self-
employment, the relationship between women's employment and
fertility histories, and earnings penalties associated with
childcare, labor, and motherhood.
In 2003, her research won the Rosabeth Moss Kanter Award
for Research Excellence in Families and Work.
Ms. Diana Furchtgott-Roth is a senior fellow at the Hudson
Institute, and directs the Center for Employment Policy. From
February of 2003 to April of 2005, she was chief economist of
the U.S. Department of Labor. She was Assistant to the
President and Resident Fellow at the American Enterprise
Institute from 1993 to 2001. Prior to that, she served in the
White House under President George H.W. Bush.
We thank all of our distinguished panelists, and we'll
begin with Dr. Sherrill and go down the line. Thank you again
for being here.
DR. ANDREW SHERRILL, DIRECTOR OF EDUCATION, WORKFORCE, AND
INCOME SECURITY, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Dr. Sherrill. Chair Maloney and members of the Committee,
I'm pleased to be here today as you examine issues related to
women in management. Although women's representation across the
general workforce has grown, there remains a need for
information about the challenges women face in advancing their
careers.
To respond to your request that we update our 2001 report
on women in management to 2007, we addressed the following
three questions:
First, what is the representation of women in management
positions, compared to their representation in non-management
positions by industry?
Second, what are the key characteristics of women and men
in management positions by industry, and third, what is the
difference in pay between women and men in full-time management
positions by industry? My remarks today are based on our full
report, which is being released at this hearing.
To examine these questions, we analyzed data from the
Census Bureau's American Community Survey for the years 2000
through 2007. We analyzed managers across all of the broad
industry categories used in the survey, representing almost the
entire workforce. We defined managers as individuals classified
under the manager occupation category in the survey, which
includes a wide range of job titles.
In our analysis of the differences in pay between male and
female managers working full-time and year-round by industry,
we used annual earnings as our dependent variable, and we made
adjustments for differences of certain characteristics that
were available in the data set, and are commonly used to
estimate adjusted pay differences.
These include age, hours worked beyond full-time, race and
ethnicity, state, veterans status, education level, marital
status and presence of children in the household. In summary,
we found that when looking across all industries combined from
2000 to 2007, female and male managers' characteristics
remained largely similar. However, differences narrowed
substantially in level of education and slightly in pay.
With regard to women's representation, women comprised an
estimated 40 percent of managers and 49 percent of non-managers
on average in 2007 across the 13 industry sectors we analyzed.
This compares to 39 percent of managers and 49 percent of non-
managers in 2000. In all the three industry sectors, women were
less than proportionally represented in management positions
than in non-management positions. They were more than
proportionally represented in construction and public
administration, and there was no significant difference in
their representation in the transportation and utility sector.
On average across the 13 industry sectors, an estimated 14
percent of managers in 2007 were mothers, with their own
children under age 18 living in the household, compared to 17
percent of non-managers. With regard to characteristics,
according to our estimates, female managers in 2007 had less
education, were younger on average, more likely to work part-
time, and were less likely to be married or have children than
male managers.
While the average female married manager earned the
majority of her own household's wages, her share of household
wages was smaller than the share contributed by the average
male married manager in his household wages. However, a key
story in our report was that female managers' gains in
education surpassed those of male managers from 2000 to 2007.
Looking to the estimated difference in pay between female
and male managers working full-time, it narrowed slightly
between 2000 and 2007, after adjusting for selected factors.
When looking at all industry sectors together and adjusting for
these factors, we estimate that female managers earned 81 cents
on the dollar for every dollar earned by male managers,
compared to 79 cents in 2000. This is the bolded line on the
first graphic on the chart up there.
The adjusted pay difference in 2007 varied by industry
sector, with female managers' earnings ranging from 78 cents at
the low end in the construction and financial activities
industries, to 87 cents on the dollar in public administration.
To examine the effects on pay of having children, we
conducted two additional analyses. We first compared only
managers with children, and then the second compared only those
without children. In 2007, the adjusted pay for female managers
with children was somewhat lower, 79 cents for every dollar
earned by male managers with children. That compares to 83
cents on the dollar for female managers without children.
While this indicates that the factors associated with
having children explain some of the differences in pay between
female and male managers, it also suggests that other factors
are involved in the remaining unexplained differences, the
large, gray portion of those last two graphics.
Some of the unexplained differences in pay seen here could
be explained by factors for which we lack data or are difficult
to measure, such as level of managerial responsibility, field
of study, years of experience or discriminatory practices.
Madam Chair, this concludes my prepared remarks. I would be
happy to answer any questions you or the Committee members may
have.
[The prepared statement of Dr. Andrew Sherrill appears in
the Submissions for the Record on page 33.]
Chair Maloney. Thank you for your testimony. Ms. Lang.
MS. ILENE H. LANG, PRESIDENT & CHIEF EXECUTIVE OFFICER,
CATALYST
Ms. Lang. Good morning, Chairman Maloney and members of the
Committee. Thank you for inviting me on behalf of Catalyst.
Founded in 1962, Catalyst is the leading non-profit working
globally to advance women in business. Our research, widely
considered the gold standard on women in business leadership,
identifies major barriers to women's advancement and presents
the most effective strategies for creating sustainable change.
Today I will share Catalyst's latest findings on the
representation of women in leadership positions, and their
implications as we look at issues of pay equity. First, the
good news. Women currently make up 46.7 percent of the labor
force, and more than 50 percent of management, professional and
related occupations, and have for a long time.
But despite their sustained workforce participation and
economic influence, women have experienced a shockingly slow
rate of progress advancing into business leadership, regardless
of industry.
According to Catalyst research, the percentage of women
executive officers and board directors in Fortune 500 companies
is stuck in the teens, and a staggering 97.4 percent of Fortune
500 CEOs are men. The Catalyst census of Fortune 500 companies
is a precise count of women leaders in our nation's largest 500
corporations, as measured by revenue.
We analyze the Fortune 500 because the country's most
powerful and influential companies set the standard. Catalyst
believes we will not see systemic change until we see it at the
nation's leading corporations. So let's look at the data.
While women are 46.4 percent of the Fortune 500 workforce,
they are only 25.9 percent of senior officers and managers,
hold only 15.2 percent of board seats, are only 13.5 percent of
executive officers, and just 2.6 percent of CEOs. That's 13
CEOs out of 500.
The numbers reflect a deep leadership gap. The current
gender ratio of top earners at Fortune 500 companies raises
another red flag. Executive officer compensation remains a
visible indicator of women's status in corporations. In 2009,
women were only 6.3 percent of top-earning executive officers
within the Fortune 500.
Women are stuck. Despite decades of efforts to create
opportunities for advancement, deep inequities persist. Our
recently released report, ``Pipeline's Broken Promise,''
revealed that talented female MBA graduates still start lower,
are paid less, and climb more slowly than equally qualified
men.
The report surveyed more than 4,100 women and men MBA
alumni from 26 leading business schools around the world.
Taking into account time elapsed since earning the MBA, years
of work experience pre-MBA, industry and region, the survey
found (1) women averaged $4,600 less in their initial jobs
after controlling for their job level; (2) women were outpaced
by men in salary throughout their careers. In fact, the gap in
pay intensified as time went on, and cannot be explained by
career aspirations or parenthood status.
And (3), even if they both started at entry level, men
progressed more quickly than women up the corporate ladder. If
this is happening to our best and brightest, one can only
imagine the inequities throughout the rest of the system. These
inequities must be addressed because it's the right thing and
the smart thing to do.
Catalyst Bottom Line research found that Fortune 500
companies with more women corporate officers, on average,
financially outperformed those with fewer, and the same holds
true for Fortune 500 companies with more women on their boards
of directors. On average, companies with more women on their
board of directors significantly outperformed those with fewer
women by 53 percent on Return on Equity, 42 percent on Return
on Sales, and a whopping 66 percent on Return on Invested
Capital.
What's good for women is good for American business. From
the perspectives of leadership advancement and pay equity,
companies that disadvantage women lose out on half the
available talent. That's like playing cards with half a deck.
Women aspire to success just as much as men do, and they define
it similarly. But until women achieve parity in pay and
business leadership roles, they will be marginalized in every
other arena.
To address inequities, Catalyst advises companies to
establish strict accountability regarding promotion and pay. We
strongly support legislation that targets inequity. A bold step
forward for American business and the economy would be for the
Senate to join the House in passing the Paycheck Fairness Act.
Chairman Maloney and members of the Committee, thank you
for this opportunity to testify today. I have also submitted a
written testimony that includes further details about relevant
Catalyst research and our methodology. I'm ready to answer
questions now. Thank you.
[The prepared statement of Ms. Ilene H. Lang appears in the
Submissions for the Record on page 84.]
Chair Maloney. Thank you very much. Dr. Budig.
DR. MICHELLE J. BUDIG, ASSOCIATE PROFESSOR OF SOCIOLOGY,
UNIVERSITY OF MASSACHUSETTS
Dr. Budig. Chairwoman Maloney and members of the Committee,
I thank you for the opportunity to speak. Today I testify that
a significant portion of the persistent gender gap in earnings
among workers with equivalent qualifications and in similar
jobs is attributable to parenthood.
Thus, policies that target the difficulties of balancing
work and family responsibilities, as well as discrimination
based on workers' parental status, may be the most effective at
reducing the remaining gender pay gap. I'm going to address
four points: The relative absence of wives and mothers among
managers, the larger gender pay gaps among parents, the
evidence of motherhood penalties and fatherhood bonuses, and
work family policies that are associated with smaller
motherhood wage penalties.
The GAO report shows that, compared with male managers,
women managers are far less likely to be married, to be parents
and have smaller family sizes when they are. The absence of
mothers and the rising childlessness among workers is also
found in national data.
Table 1 in the handout I've distributed shows that
controlling for important labor market and family
characteristics, the gender employment gap among the childless
is only six percentage points, while it is 20 percentage points
among parents. Thus, high-achieving women are foregoing
families at rates not observed among high-achieving men. This
is an important form of gender inequality. Moreover, the
relative absence of mothers may represent a brain drain of
experienced, skilled workers.
The GAO report also shows that, among mothers who do
persist in management, the gender pay gap relative to fathers
is far larger than the gender pay gap among childless managers.
Table 2 of your handout shows that, among all full-time workers
in the U.S., childless women earn 94 cents of the childless
man's dollar, while mothers earn only 60 cents of a father's
dollar.
The gender pay gap and the parenthood pay gap are strongly
linked. Research demonstrates that between 40 to 50 percent of
the gender pay gap can be explained by the impact of parental
and marital status on men's and women's earnings. Moreover,
while the gender pay gap has been decreasing, the pay gap
related to parenthood is increasing, which brings us to the
wage penalty for motherhood. If we look just at women, the
finding that having children reduces earnings, even among
workers with comparable qualifications, experience, work hours
and jobs, is now well-established. In your handout, Table 3
from our research shows the effect of children on earnings.
All women experience reduced earnings for children, each
additional child they have. This penalty ranges in size from 15
percent per child among low-wage workers, to about four percent
per child among the highly paid. That mothers work less and may
accept lower earnings for more family friendly jobs partially
explains the penalty among low-wage workers, and that mothers
have less experience due to interruptions for child-bearing
explains some of the penalty among highly-paid workers.
But a significant motherhood penalty persists even in
estimates that account for these differences, such that the
size of the wage penalty after all factors are controlled is
roughly three percent per child. What does that mean? In 2009,
the typical full-time female worker earned $1,100 less per
child in annual wages, all else equal.
This unexplained three percent penalty may partially derive
from employer discrimination against mothers, and evidence from
experimental and audit studies finds motherhood discrimination
in callbacks for job applications, hiring decisions, wage
offers and promotions.
After reviewing resumes that differed only in whether they
noted parental status, subjects in an experiment systematically
rated childless women and fathers significantly higher than
mothers on competency, work commitment, promotability and
recommendations for hire.
The motherhood penalty compares women against women to see
how children impact wages. Among men, fatherhood increases
earnings. Some of this fatherhood bonus is due to fathers'
longer work hours, greater experience and higher-ranking jobs,
but, even after we adjust for these differences, we find a wage
bonus for fatherhood.
Figure 1 in your handout shows that, controlling for labor
market characteristics, all men receive a fatherhood bonus, and
this bonus is the greatest for white and Latino college
graduates, whose annual earnings are about four to five
thousand dollars higher than comparable childless men. Thus, we
see parenthood exacerbates gender pay differences.
What kind of policies might reduce the gender gap in pay
attributable to the motherhood penalty? In collaborative NSF-
funded research, we've identified three key policies. Figure 2
of your handout shows that universal early childhood education
for pre-school children and increased availability of publicly
supported affordable high-quality care for children under the
age of two enables mothers to maintain connections to
employment, and therein dramatically reduces the motherhood
wage penalty.
Figure 3 shows that universal moderate-length job-protected
leave following the birth of a child also reduces motherhood
penalties. We recommend FMLA needs to be extended to all work
places and workers, and ideally should be longer than 12 weeks.
Universal paid maternity and paternity leave are key.
Short-term paid maternity leave also reduces women's exit
from the workforce and reduces the wage penalty for motherhood.
Moreover, non-transferrable paid leave to fathers is strongly
linked to smaller motherhood penalties.
I see that I'm out of time, but I'm happy to talk about any
of these recommendations, and I thank you for your attention.
[The prepared statement of Dr. Michelle J. Budig appears in
the Submissions for the Record on page 107.]
Chair Maloney. Thank you very much. Ms. Furchtgott-Roth.
MS. DIANA FURCHTGOTT-ROTH, SENIOR FELLOW, HUDSON INSTITUTE
Ms. Furchtgott-Roth. Thank you very much for inviting me to
testify today. I would like your permission to submit the full
testimony for the record, as well as my recent monograph, ``How
Obama's Gender Policies Undermine Women,'' which I refer to in
my testimony.
I'd like to congratulate GAO on another in a series of
excellent studies, and this study does not show discrimination.
On page four, if I quote from Dr. Sherrill's letter, he says
``Our analysis neither confirms nor refutes the presence of
discriminatory practices.''
Some of the unexplained differences in pay seen here could
be explained by factors for which we lack the data or are
difficult to measure, such as level of managerial
responsibility, field of study, years of experience or
discriminatory practices, all of which can be found in the
research literature as affecting earnings.
Dr. Budig has given a very clear summary of the research
literature. I mention some of it in my testimony, so I don't
think I have to review it here.
Just one small point about the male and female managers and
percent of household income. In the bullet point on page two,
it says ``While the average female married manager earned the
majority of her own household's wages, her share of household
wages was smaller than the share contributed by the average
male married manager to his household's wages.''
Well, when I spoke to Dr. Sherrill earlier, one reason for
this is because it doesn't account for whether the spouse
worked, and there are more non-working female spouses than male
spouses. So many of the male managers were the only earner in
the household, and that's one reason they had a higher
percentage of household earnings.
Well, when you account for age, experience, motherhood,
time in the work force, the pay gap basically disappears
according to many studies. In fact, Professor Marianne Bertrand
of the University of Chicago and Kevin Hallock of MIT have done
a study on top CEOs, accounting for age and tenure in the
workforce and level of responsibility, and found that women
managers earn 97 cents on the dollar.
The GAO study shows that women have been improving over the
past seven years, where they were documenting this research,
and the danger is not that women are going to fall behind. The
danger is that Congress is going to over-react to false
discrimination claims and pass legislation that will slow the
progress of both men and women. Such legislation is discussed
in this monograph here.
The Paycheck Fairness Act specifically was one of the first
bills that the House of Representatives passed, but if it is
passed by the Senate and signed by the President, it would
spawn a tidal wave of lawsuits, and enmesh employers in endless
litigation. This bill is a full employment act, not for women
but for trial lawyers, that would further burden our
overburdened courts, and would slow small businesses and large
businesses from hiring, and encourage them to ship more jobs
overseas.
The bill would only allow employers to defend differences
in pay between men and women on the grounds of education,
training and experience, if these factors were also justified
on the grounds of business necessity. That means that this
change could prohibit, for example, male supermarket managers
with college degrees from being paid more than female cashiers,
because the college degree for the male manager might not be
considered as part of a business necessity.
Another provision of the Paycheck Fairness bill would
expand the number of establishments subject to the law from all
establishments to the same employer in a county. So right now,
it is county-wide, but if there are many establishments with
some firms in one say low-income county with lower wages,
another in a higher-income county, this bill would mean that
they would all have to be paid the same.
But now employees who do substantially the same work in one
location have to be paid equally. Identifying ``substantially
the same work'' is hard to do for disparate jobs in different
locations. Class action suits would be facilitated by the
bill's opt-out clause. Now, if a worker wants to participate in
a class action suit, she has to affirmatively agree to take
part.
What the Paycheck Fairness Act would do is mean that she
would have to opt out affirmatively. Otherwise, she would be
included. The bill would require the EEOC to analyze pay data
and collect more records from employers, imposing a substantial
burden in terms of collecting data on race, sex and wages of
employees.
So the danger is not that women have insufficient remedies
for discrimination, or that they are underpaid when you take
account of their age, experience, education and background, but
the Congress will interfere and slow the economy even more,
reducing job growth and family income for men and for women.
Thank you very much for allowing me to testify.
[The prepared statement of Ms. Diana Furchtgott-Roth
appears in the Submissions for the Record on page 117.]
Chair Maloney. Thank you, and I'll begin the questioning,
and I'd like to ask Dr. Sherrill and Ms. Lang about a recent
Wall Street Journal article that reported that the number of
women in finance has fallen dramatically over the last ten
years, despite the rise of the number of women in the industry
and their educational level. What does the GAO report tell us
about female managers' representation and pay, in the financial
services industry, and how has their position evolved over the
last decade? Dr. Sherrill.
Dr. Sherrill. Our analysis of the financial services
industry indicates that women's representation in management
positions dropped from about 53 to 50 percent over the time
period we looked at. Also, that this industry has the biggest
pay difference for male and female managers, at 78 cents to the
dollar for men. That's tied with construction.
We also found that the financial services industry by far
has the biggest difference between men and women managers in
the percentage with bachelor's degree or higher: 26 percentage
points. GAO has also done some prior work, separate reports,
looking specifically at women's representation and minorities'
representation in management over time in the financial
services sector, and basically found that from the mid-1990s to
the mid-2000s, it's remained largely stagnant.
There have been some initiatives, but there's been
obstacles in terms of recruiting more minorities and also
getting buy-in from middle-level managers to some of these
initiatives like recruitment and internships.
Chair Maloney. And Ms. Lang, would you like to comment on
this?
Ms. Lang. We don't have any research that shows anything
different from the GAO.
Chair Maloney. And how does this compare to other fields
that you looked at in your report, such as education, social
services, and other lower-paying fields?
Dr. Sherrill. The financial services industry is one of the
higher-paying industries, and, in comparison, we didn't find
any strict correlation between the representation of women in
management positions and the size of the pay difference in
different sectors.
But you mentioned health care and social services, just to
compare them with the financial services industry. In health
care and social services, we saw an increase in the
representation of women as managers of up to four percentage
points, up to 70 percent, the highest of all across the
industries, and the pay gap was 81 cents to the dollar in 2007.
In educational services, women represented about 57 percent
of managers in 2007. The pay gap was somewhat less, 86 cents to
every dollar earned by the men. That's one of the smallest pay
gaps across the industries we analyzed.
Chair Maloney. And Ms. Lang, are there sectors of the
economy where women are not represented at all at the upper
rungs of the corporate leadership? Or Dr. Sherrill, if you'd
like to comment. Are there some areas where they're not
represented at all? Are there other areas where they're more
represented?
Ms. Lang. Thank you. We look at the Fortune 500, and we
look at industry breakouts, and in particular when there are
ten companies in an industry, we compare, and what we found is
that there are women in leadership throughout--and senior
corporate leadership in every industry. The only place where
you don't see women is in the CEO role. There are some
industries that have no women CEOs.
That's not to say that the representation is equivalent
across the board. Some do better and some do worse, but, in
fact, there are women on boards in just about every industry,
and, again, in the C-suite and in management. Some industries
have a much higher percentage of women in the overall workforce
than others, but it doesn't seem to make that much of a
difference overall as to how far they advance, except to the
CEO.
Chair Maloney. Thank you. My time is up. Mr. Brady.
Representative Brady. Well, discrimination against women in
the workforce or society is wrong, period, and we ought to root
that out, and we ought to apply the principles that allow merit
in hard work and effective work to be rewarded on an equal
level with men, period. The question is one, what is
government's role in doing that, and secondly, does it--and how
does it--exist?
I think Ms. Furchtgott-Roth pointed out, as did Dr.
Sherrill's report, that it is sometimes difficult to compare
apples to apples. We have male-dominated industries and female-
dominated jobs. You've got education, skills, tenure,
workforce, a whole number of variables in it. I want to get to
the point about how that affects women entrepreneurs
specifically.
But I also want to point out the women in my district, and
we meet regularly with our chambers of commerce or small
business groups, and they really sincerely today are most
worried about jobs, the economy and this debt and this country.
I think today 90 percent, the latest poll, 90 percent of
the American people believe this economy is in bad shape and
not getting better any time soon. They raise real doubts and
skepticism about the stimulus bill, because it has lost, what,
three and a half million jobs now along Main Street since that
was put in place.
Almost every economist has downgraded our economic growth
over the next year. The fact is that, at this level, it will
take much of this decade to return to the unemployment levels
of the Bush years.
We have a bipartisan, I think, goal in getting this economy
back on track. Back home, what I've seen over the last decade
is a dramatic increase in women in leadership roles in the
community, leadership roles in business, and especially among
small businesses, entrepreneurs.
All you need do is go to any chamber of commerce meeting in
any community, and you'll see that it is dominated by women
running small businesses. So my question to the panelists is
what studies have you done to identify how women in small
businesses, entrepreneurs owning their business, launching
their small business are doing? What type of equality occurs in
the marketplace?
You know, are consumers and clients rewarding small
businesses run by women? Is there discrimination in that area?
Have there been any studies done? I would open it up. I ask
that because that's the growing area of job development and
creation in the country. This is where I see major gains
occurring.
I want to see more of that occurring. Has anyone made some
comparisons, identified those levels?
Dr. Budig. Is this on?
Representative Brady. There you go.
Dr. Budig. A decade ago, I wrote my dissertation on gender
differences in self-employment, so my data might be a little
old, but I think I can speak to some of your, part of your
question. Self-employment and entrepreneurship, particularly
among women, is really very varied, right? I mean it runs the
gamut from women opening hair salons in their basement to
starting up businesses in the tech sector.
What I observed in my analysis was that, among those
engaged in professional forms of self-employment, for the
highly educated and highly skilled, there were no gender
differences in the impact of self-employment and
entrepreneurship on family economics. Both men and women
benefited from it.
But among non-professional work, it's very different. So
you have men opening businesses in crafts and trades such as
plumbing, carpentry, and those are pretty lucrative, whereas
the things women are doing are not. In fact, the motherhood
penalty is even stronger among self-employed, non-professionals
than it is in the regular workforce.
There, that can't be employer discrimination, because you
are your own employer. I didn't study consumer discrimination,
so I can't speak to that end of it.
Representative Brady. But that data's a decade old?
Dr. Budig. Yes, it is, uh-huh.
Representative Brady. Okay. I appreciate the point you're
making. I think the last decade has seen tremendous growth in
women entrepreneurs. I imagine there are, if you're the mom,
and you run the company, and you're taking time off either for
the birth or for those early years, clearly there will be an
impact.
I'm just curious in the marketplace itself, have there been
any studies on, you know, do small businesses owned and run by
women make less, generate more income, have greater profit
margins, employ more, employ less? Do they have different
policies for merit, you know, and productivity in their own
business?
I just think these are areas--again, I see tremendous
growth in this area, and again discrimination doesn't belong in
the marketplace, period. I'm just trying to get to that apples
and apples comparison. Thank you.
Chair Maloney. Mr. Cummings.
Representative Cummings. Thank you very much, Madam Chair,
and I thank you for having this hearing. It's so very
important. Dr. Budig, can you--maybe you can comment on this.
The women in my district, there are huge percentage of them who
are single mother head of household, and you know, when I hear
you talk about the bonus for fatherhood and then you said what,
the penalty for women, you know, I'm trying to figure out how
does that--have you broken your numbers down as to how they
affect single mother head of household?
The reason I ask you that is because these are the women
who have no help usually, who have no support systems. They're
the ones that have to get up at five o'clock in the morning,
dress the baby, get them to a babysitter, you know, and deal
with all of those issues, while somebody who may be married may
have a partner who can take on some of those tasks.
So I'm just wondering, has there been research done with
regard to that, and the other reason I asked the question is
because, if you've got a single earner, and if her wages, if
she is penalized for having children, it seems like in those
circumstances she's in a tougher, much tougher situation than
somebody who may be married.
The other reason I ask the question is because, when we
look at our divorce rates, you know, and I wonder how, you
know, I'm sure you didn't get into this, but I wonder how all
of this, that is when women go out and they're trying their
best to move up these ladders, how that might affect the family
when they are together, when they are married, and divorce
rates.
So you've got a whole--I'd like to just have your comments.
Dr. Budig. Certainly. Because single mothers tend to not
disrupt their employment when they have children, they have
more continuous employment records, and that does help them a
little bit, but, for low-wage workers, I have a study coming
out next month in American Sociological Review, that looks at
the impact of motherhood in terms of the motherhood wage
penalty across the distribution of women earners.
And among the lowest-paid workers in the economy, they pay
the highest wage penalties for motherhood. In part, that's due
to the fragility of their child-care systems, that oftentimes
that women at that end of the spectrum, when they have work
family crises, they have to quit their jobs because they're in
jobs with very few benefits or accommodations, whereas women at
the higher end of the spectrum usually have more resources to
deal with child-care crises and so forth.
But certainly the wage penalty for motherhood is going to
be experienced more seriously in a family that is not getting
the fatherhood bonus because there's no man in the home, so
children are profoundly affected by the loss of earnings that
their mothers incur.
Representative Cummings. Now, in many jobs, there is a
necessity or requirement, and any of you all may comment on
this, that a person go back and get credits, say, for example,
teachers, lawyers, and, in many instances, as we well know,
education and continuing education is one of those factors that
would allow a woman to move up the work ladder.
I would imagine that if somebody does not have that support
system that's another factor that comes in, that makes it
almost impossible to do all the things I just talked about
doing, work and then go to night school, take care of the kids.
So I was wondering have you all addressed that issue at
all, with regard to continuing education? Mr. Sherrill, Dr.
Sherrill? Dr. Lang, Ms. Lang? Either one of you.
Ms. Lang. One of the things that Catalyst does is examine
practices among companies to see what are the best practices,
what goes the longest way towards improving the work
environment at companies, and the notion here is that, in a
competitive work environment, where you need talent and you
talk about continuing education, which is improving the talent,
you want to be the employer of choice, and what do the best
employers do in those situations?
And those are situations where the best employers sponsor
their employees for the continuing education. They invest in
their employees. They support them, and they have paid leave
for them, so that's kind of where we see the best employers
going, that they are trying to make sure that they do not lose
their employees because of situations like what you've
described.
Representative Cummings. I see my time is up. Thank you,
Madam Chairman.
[The prepared statement of Representative Cummings appears
in the Submissions for the Record on page 183.]
Chair Maloney. Thank you very much, and building on Mr.
Cummings's questions, in 2003, GAO did another report that I
requested on mothers' pay, and it showed that mothers pay a
wage penalty while fathers earn a wage premium. Dr. Budig, are
there specific industries where the ``mom bomb'' is more of a
problem than others? And if so, what do you think might explain
those differences? Dr. Sherrill, or anyone who'd like to
comment. But if you could begin, Dr. Budig?
Dr. Budig. I have--sorry. I have in the past done analyses
by industry, and I did not see that there were better or worse
industries for mothers to be in, but the wage penalty for
motherhood occurred in the same way in all jobs and industries.
Chair Maloney. Do more educated women face a bigger
motherhood wage penalty than those who are less educated?
Dr. Budig. Education seems to be protective, so the more
education you have and the longer you delay motherhood, the
less of the penalty you'd incur. So it's worse for younger
mothers and for the less educated.
Chair Maloney. And do women face an additional penalty when
they have a second child? In other words, is the ``mom bomb'' a
one-time explosion, or is it a cluster bomb?
Dr. Budig. Women face--it's a cluster bomb.
Chair Maloney. It's a cluster bomb?
Dr. Budig. It is.
Chair Maloney. Really?
Dr. Budig. Each additional child impacts earnings in a non-
linear fashion, so it actually gets exponentially worse, and
the wage penalty for motherhood doesn't go away in my, the
research I've done, as the children age, but actually grows
over time. So it's a permanent penalty.
Chair Maloney. You also mentioned that education is
somewhat protective, and we have seen in the last decade that
women have outpaced men in receiving college degrees. How have
women's educational gains translated into leadership positions
in the industry, and I ask Ms. Lang, Dr. Sherrill, anyone? What
is the impact of these gains in education? Has that also been
reflected in gains in leadership positions and in narrowing the
pay gap?
Dr. Sherrill. Our prior work on the gender pay gap has
shown that women's gains in education and level of work
experience in occupations that they're in has explained a big
part of their progress at lowering the pay gap.
When we look at that particular education story here, with
the women in management analysis we did, it's kind of a mixed
picture. For example, if you look at the industry where the
levels of education are most similar for male and female
managers, that's in manufacturing, where they're very close in
levels of education, but women represent only 23 percent of
management positions, so they're at the lower end.
In construction, an industry where women have higher levels
of education than male managers overall, women are only 12
percent of the managers there. In the educational services
industry, the levels of education for male and female managers
are fairly close, yet women represent 70 percent of managers,
so there's no clear picture. Education is just one factor in
the story.
Chair Maloney. Ms. Lang.
Ms. Lang. Certainly education has brought more women into
more professional positions, and has brought them into more
industries and on the management track, but our study about
women MBAs, comparing women and men MBAs (they are sort of the
proxy for future leadership)--from day one, first job after an
MBA, even after you control for years of experience before the
MBA, control for parenthood, industry, region, whatever, women
start at a lower compensation than men, so there's a pay gap
just for being a girl.
Chair Maloney. Well, why is the pay gap so stubborn, and
what do you think we can do to try to end it once and for all?
We learned from a Census report earlier this year that the
gender gap has not budged since 2007, and the GAO report today
shows us that the pay gap for women in management barely moved
from our first report in 2000.
We got a two cent raise, but that's hardly a massive
improvement. Two cents for seven years, between 2000 and 2007.
In management, moms saw no improvement at all, so I would just
like to hear your comments on why do you think the pay gap is
so stubborn? It's barely moved.
Ms. Furchtgott-Roth. It's because women like choosing
family friendly jobs, so here it goes up to the most educated.
So on the Yale Law Women website, these are some of the
smartest women in the country, this reads ``In the aftermath of
recent global financial crises, Yale Law Women believes the
focus on family friendly firm policies and policies designed
for the retention of women remains more important and pressing
than ever.''
And family friendly policies are those that allow children
to be combined with a career. It means careers where you can be
home for dinner, with fewer hours, and these are not careers
that lead you on the CEO track. It's not a mom bomb. It's a
preference for more flexible schedules, and women want these
flexible schedules, and they come with lower levels of pay.
That's why, until women stop wanting to be home with their
kids, until mothers stop wanting to spend time with their
children, you're always going to have, we're always going to
have that pay difference.
Chair Maloney. Would you like to comment, Dr. Sherrill? You
say you accommodated for part-time work, for preferences, for
leaving to have children, taking care of a sick parent? Or Ms.
Lang or Ms. Budig, would you like to comment on the persistence
of the pay gap?
Dr. Sherrill. Yes. We found that being a mother was
associated with a lower level of pay. Our prior work, like in
our 2003 report, found that, for the general workforce, women's
work patterns were a key in explaining differences in pay, such
as time away from the workforce, part-time work, fewer hours
worked in a year, those kinds of things.
I think this points to a couple of areas. One is the
different policies that help women better balance work and
family priorities, and I think a second area is women's entry
and retention in some of the higher-paying industries. As part
of this story, a key issue is the extent to which women are
getting degrees in the same fields of study as men, such as
mathematics, science, and engineering, and to what extent that
is changing over time.
Chair Maloney. Okay. Yes, Ms. Lang, very quickly.
Ms. Lang. We have studied the values that women and men
bring to the workplace, what they're looking for, what they
expect, and it's a little counterintuitive. But, in fact, women
and men do look for the same kinds of work environments and the
values there.
Number one and number two of women and men is having a
supportive work environment and having a challenging job.
Number three and number four are having a good fit between life
on and off the job and being well-compensated. Numbers five and
six are working at a company that has high values and having
the opportunity for high achievement. Women and men are more
alike than different in what they look for in the workplace.
But as it turns out, men are much more likely to get the
values that they're looking for than women are, and that's kind
of the rub here. There's an assumption that a family friendly
work place is a lower-paying workplace for women. That's not
true. Companies that really work at having the women, at
retaining the women in their workforce, the ones they've
invested in, the ones they've developed, they care a lot about
what those women want.
I will just conclude with the comment from the Senior Vice
President of Human Resources, a man in his early 40s with three
young children, who told me recently, he said, ``I meet
with''--he was a senior VP of Human Resources in a large global
company--he said, ``I meet with the women all the time, and I
can tell you what they want is what I want.''
Chair Maloney. Well my time is up, but I just would like to
comment and come back to this in my further questions. Isn't it
true that, in the GAO report, you found a pay gap between
childless women and men, so we can't blame motherhood for the
entire pay gap, can we? I think that's a fair thing to say. Mr.
Brady.
Representative Brady. Thank you, Madam Chairman. I want to
go back to the apples to apples comparison because I think
that's where we want to go. Obviously, GAO's report shows, I
think, a 19 percent pay gap on average salaries, but an earlier
GAO report, 2009, said that measurable differences account for
all but seven percent.
The Department of Labor recently found the wage gap is
between about five to seven percent after accounting for
measurable differences. Ms. Diana Furchtgott-Roth, you cited a
study, Bertrand and Hallock--
Ms. Furchtgott-Roth. Yes.
Representative Brady [continuing]. That found, you know,
not much of the difference in the pay of male and female
corporate executives, when they factored in a number of issues.
What are they factoring in in that study, that other studies
may not be or may, you know, not be factoring in quite as
heavily? What are the differences?
Ms. Furchtgott-Roth. So what they factored in is the work
age and experience, as well as presence of children, and what
one finds is not that mothers are underpaid but that getting on
the CEO track is just very difficult to do. A lot of men don't
make it either. When you, if you're a mother and you select a
job that allows you, say, to be home for dinner, or you might
choose, say, part-time work.
So you choose part-time work, and then the head of the law
firm or whatever it is Ms. Lang talked about says, ``Oh yes,
I'll give them whatever they want.'' Say a woman wants a part-
time job. So she says, ``I want to work three-quarters time and
get three-quarters of pay.'' Then that lowers her wages
compared with men, but she's still getting what she wants.
If you look at say recent Supreme Court nominees, Justice
Elena Kagan, Justice Sotomayer and then candidate Harriet
Miers, they didn't have any children. Condolezza Rice,
Secretary of State, no children. Hillary Clinton, one grown
daughter when she was in the Senate, and now she's Secretary of
State.
The data from the Labor Department in 2009, I have it right
here in front of me. If you just don't even account for
occupation and education, if you look at childless, single
women compared with childless, single men, on the aggregate
it's 96 percent. Then if you just add with children under six
years, it goes to 80 percent.
Representative Brady. And your point in that study is what?
Ms. Furchtgott-Roth. This is the Labor Department
Highlights of Women's Earnings in 2009, put out in June 2010 by
the Labor Department. It has tables of average earnings. This
is Table 8 I'm looking at, women, men, married, spouse present,
divorced, single. I was just reading from Table 8.
So single women with no children under 18 earned 96 percent
of what men earn, but when you add with children under six
years, it brings it to 80 percent. These women earn 80 percent,
and I can do further calculations here with my pocket
calculator if you want. I can turn this data over to your
staff. It's right there for anybody to see on the web.
Representative Brady. Can I ask for--thank you. Can I ask
first the panelists, and Ms. Lang, you made the point that men
and women may be more alike on issues of not just compensation
but of time, the ability both to have a satisfying work life
and a life afterwards, and time with your children or family,
or pursue whatever other interests you have.
Is the workforce becoming more flexible for those who want
to have a life outside of it, and is the boom in women-owned
businesses, women entrepreneurs, is that perhaps a desire to
have more flexibility and more control over your time and still
have a satisfying work environment?
I ask that because I see women-owned, starting law
practices, medical practices, sales teams. In virtually every
field, not necessarily a plumbing company but a lot of
businesses in our communities, and one, I think it's because
it's merit-based, the ability to control your time, to have
some say over your destiny.
But I wonder what role flexibility in controlling your time
has in encouraging women entrepreneurs?
Ms. Lang. Right. So I've been an entrepreneur, and I can
tell you, an entrepreneur works all the time, day and night,
round the clock, 24-7, 365. It's a myth that women who are
entrepreneurs work part-time. That said, the idea of
flexibility and the ability to control your own time is
dependent on a lot of things, most particularly on power in the
workplace.
So more senior people have more staff. They have more
resources. They have more power over their own time because
there's somebody else who they can ask to do the work or
command to do the work. Now we are in a workplace today in the
21st century that is global markets, global workforces, and
it's 24-7, 365.
The workplace that will survive in that kind of economy is
one where flexibility is the norm. I'm not talking just about
flexible hours. I'm talking about flexibility that leads to
innovation, flexibility that allows for cultural competence, so
that people who work in one part of the world can support
customers in another part of the world. Flexibility for
employers and employees, and women and men. That's really also
about focusing on results, so I think that how work is done and
where it's done today are completely contrary to the really
outmoded notions about face-time and being in the office, and
the technologies that are available make it much more possible
for companies to structure the workplace so that there's much
more flexibility. People can work at home. They can work
reduced schedules. They can do other kinds of things.
The best companies are offering that to women and men
employees. You know if they're the best companies when the men
take these kinds of options as well.
Representative Brady. Right.
Ms. Furchtgott-Roth. So if women want to be offered reduced
schedules, then they're paid a reduced amount, and that means
there's a pay gap. You just----
Ms. Lang. Every credible research study that looks at this
controls for that kind of thing, so you don't look at the raw
numbers; you look at it controlled for the number of hours
worked or some of these other things. That's what it means to
control for a factor. So when you control for that, you can
look and see what is the pay gap that nets out.
Chair Maloney. And this report compared full-time female
managers to full-time male managers. It was not comparing part-
time employment. We did have a JEC report on part-time
employment, and I'll follow up when I have time on that one,
but this was full-time versus full-time employment. Mr.
Cummings.
Ms. Furchtgott-Roth [continuing]. Full-time is over 35
hours a week.
Chair Maloney. Pardon me?
Ms. Furchtgott-Roth. Full-time is any hours over 35 hours a
week.
Chair Maloney. Yes, exactly.
Ms. Furchtgott-Roth. Someone could be working, say, 36
hours, a woman, and it would be full-time, and she's compared
to a man who's working say 50 or 60 hours a week. So saying
that those--you have to account for the number of hours, not
just full-time or part-time.
Chair Maloney. I'll call on Dr. Sherrill to clarify the
framework of his report.
Dr. Sherrill. We did also take account of hours worked
beyond full-time, as one of the explanatory factors.
Representative Cummings. I'm sitting here and I'm listening
to all this, and I'm also looking at the audience and Ms.
Furchtgott-Roth, if you saw some of the expressions on some of
these women's faces, I guess you'd be surprised. But I have two
daughters, and let me make sure I understand this.
Am I to tell them that they need to wait until they're 40
to have children?
Ms. Furchtgott-Roth. No.
Representative Cummings. Now hear me out. Now hear my whole
question now. Don't answer me too quickly. Am I supposed to
tell them they need to wait until they're 40 to have children,
if they want to progress up the employment ladder? Am I
supposed to tell them that they are--they need to go in and if
they're going to have children, they need to expect that they
will not move quickly up that ladder?
And I'm just trying to figure out, you know as I listen to
all of this, I'm trying to figure out where, and I listened to
you, Ms. Lang, and I'm thinking I agree, that you've got to
have some flexibility in the employers.
But you know where that comes from? It comes from
leadership, and I wonder if there's a correlation between who's
sitting on these boards. If I've got an all-male board, it's
like imagining Congress without women. I hate to even imagine
it.
But if you've got an all-male board, all of whom have
benefited from having as many children as they want, and they
are making decisions, corporate decisions, Dr. Budig, about
their employees. I'm just trying to figure out is there a
correlation with regard to sensitivity coming in there because
a lot of this is about sensitivity and creating that kind of
work place.
For example, I've seen situations where a lot of women tell
me, we have some situations in Maryland where they have, for
example, daycare centers right on the premises. They love it
because they can see their kids at lunch time; they're on the
way to work. They can drop them right off, pick them up right
there at work. I mean those kinds of things, all of that.
I'm just trying to figure out what do we, instead of us
being stuck here, what are the kind of things that, if I'm
sitting here as an employer, and I want to make sure that women
progress, what are the kind of things that I need to be doing
to make sure that that happens?
Ms. Furchtgott-Roth. So one thing you could tell your
daughters is that the field they choose is very important. They
need to get a lot of education and also that some careers are
more family friendly than others. If they become a Congressman
and follow in their father's footsteps, they are not going to
get a wage penalty for having children because that is a job
where the--where it's easier to combine work and family.
If they're a professor in a college, professors are given
additional years in many universities to be able to write the
publications and get tenure. Women have been teachers
frequently because they have long academic leaves in the
summer.
On the other hand, if your daughters were to go into, say,
investment banking, where there isn't really any concept of
part-time work, or a partner in a law firm, a high-powered law
firm where the client also wants to see you, you know, it could
be 24 hours a day if they have a case. That's difficult to be a
full-time working mother.
But a doctor, if she wanted to be a doctor, a medical
practice. There are group medical practices, and some doctors
cover for others in these medical practices.
Representative Cummings. And so if I--what would I say to
my son? The same things? What would I say to my sons?
Ms. Furchtgott-Roth. I mean if they were to have children?
Representative Cummings. The same questions. The same thing
you just answered. Would I have a different answer than what
you just gave me if I were talking to my boys?
Ms. Furchtgott-Roth. Well, it depended if your boy wanted
to be home in time for dinner to see his children.
Representative Cummings. I see.
Ms. Furchtgott-Roth. Some men don't care. Some do.
Representative Cummings. Ms. Lang, thank you.
Ms. Lang. Yes. I want to thank you for bringing up the
issue of leadership and tone at the top, and it's really
important. You talked about a board of directors that is all
men. There are still some boards of directors that are all men,
but I am happy to say that the largest companies in the United
States are increasingly seeing more women representation.
In fact, the question of representation of women that we
find is less industry-specific and more size of company. So the
Fortune 500, 100, have more women, a higher percentage of women
held board seats than the Fortune 101 to 200, 201 to 300, that
type of idea.
Now why is that important? You brought up a little bit of
it in some of the examples, but one of the most important is
that women are role models to women and men alike. They're not
role models just for women; they're role models also for men.
Men and women both see women in leadership roles, and one of
the most difficult perceptions to get past is that I speak a
lot and I say to people, ``Close your eyes and picture a
business leader.'' Can you imagine how many picture a woman?
Most of them picture a man.
Getting past that assumption or stereotypic perception is
very important, so when you see women on boards of directors,
you know that there is diversity, inclusion of women, as well
as men there. It sets the example that this is a company at
which all people can succeed.
One of the quotes that I like the most from one of our
focus groups that we had was a woman saying about--and she
worked in a high tech company--and she said, ``When I look up
and see that they're all men, I don't think I have a chance.
When I see diversity, I know that people like me can succeed,
that everyone can be successful.'' That's what tone at the top
is really all about.
So I think that the more we focus on leadership, the more
important it is. We did one study that shows that a company
that has more women on their board of directors, five years
later will have more women in their senior leadership, so
that's again sort of showing it's not just that it happens
organically. It shows that it happens because there are people
in the boardroom who think that it's important to have
diversity and leadership, and they stand for that and they
pursue that in policy.
Representative Cummings. Thank you.
Chair Maloney. What is the impact of the recession on the
gender gap? When we did this report, we specifically looked
through 2007 in order to avoid the recession, so we would have
a greater long-term trend to look at, but I'm interested in
knowing what the gender gap is during times of prosperity
versus times of recessions. Do women share the wealth during
times of prosperity, or does the disparity grow? Have there
been any studies on that impact on the pay gap? Yes, Doctor--
Ms. Lang.
Ms. Lang. I've been a doctor three times already today. So
our study about the pipeline, looking at the MBA alums,
explored that as one of several issues that we looked at. What
we found is looking at the period between December 2007 and
June 2009, asking a group of over 1,000, about 1,500 or 1,600
of the women and men MBA alums, how did the recession treat
you? What's happened to you over these last 18 months?
And what we found is that women and men, for the most part,
did well. These are the MBA alums. They job-hopped much more
than one would have thought. They were promoted. They took
lateral moves. They took international assignments. However,
the women and men, when we looked just at the women and men who
were in the most senior levels, that group, women were three
times more likely to lose their jobs.
So that was a--that's a very serious penalty when it looks
at what's happened to women in leadership, and it has been
quite pronounced, at least anecdotally. People would ask us are
senior women losing their jobs more in this recession? This
study that we did suggests that that was the case.
Chair Maloney. Also, could you talk about women's
leadership, and how it creates opportunities for women lower
down the corporate ladder? You did mention that female board
members help improve the hiring of women. Would you like to
elaborate more on the pipeline issue that you studied? Others
may want to comment on the pipeline issue you were commenting
on, too.
Ms. Lang. Well, what we have found in the research that
we've done, looking at both senior levels and in the pipeline,
is that women face barriers to advancement that men don't. We
documented that women MBAs, all other things being equal, start
at lower compensation rates, and they are slow--they move more
slowly up the ladder over the years, at least in the ten years
that we covered in our study.
We have shown for years that women's, their aspirations
towards leadership are just as strong as those of men, but it's
much harder for them to be treated seriously and have the
credibility and for their accomplishments to be recognized.
Chair Maloney. Thank you. Mr. Brady.
Representative Brady. No. I really have nothing more to
add. One, I think it's very--it's a fascinating discussion on
an important topic. Two, I'm grateful Stephen Colbert is not
here to make any comments. Thank you, Madam Chairman.
I do think we're missing two of the fastest-growing areas
for business, entrepreneurship and the digital economy. You
know, all you need do is go to some of the technology companies
in the Silicon Valley and look at the meritocracy there that
they've created, regardless of gender, age or anything.
It is simply who produces the best results on time under
budget. And I think we are missing some of that, and, at the
end of the day, I still believe we need jobs for women and men.
I do think this economy is off the track. I don't understand
why Washington's pursuing the policies it's doing; that has
produced a recovery three times weaker than 1981 and 1982; why
so much of America is discouraged about the economy and the
track that we're on, and, for the life of me, I don't
understand why we're not voting this week to not raise taxes on
women and men and small businesses and families, and capital
gains and a number of other areas, I think, that could create
this certainty to help get this economy on track.
So Madam Chairman, we have differences on some of the
policies, but I think your holding this hearing is a very
important action. Thank you.
Chair Maloney. Thank you, Mr. Brady.
Representative Cummings. I just want to go back to you, Ms.
Lang. You were talking to the chairwoman just a moment ago
about loss of employment. Is that right?
Ms. Lang. Yes.
Representative Cummings. And you said that women--what was
your conclusion?
Ms. Lang. We looked at women and men MBA alums who had
earned their degrees between 1996 and 2007, so it's basically
that Gen-X group, and they range in age from, at the time that
we did this most recent study, they were kind of late 20s to
mid-40s. That's kind of the age group.
We asked them, ``What's happened to you over this period of
time during the recession, December 2007 to June 2009?'' What
we found was that the women and men--the only differences
between the experiences of women and men during that period
were that, in senior leadership positions, women were three
times more likely than men to have lost their job
involuntarily.
Representative Cummings. That's very interesting. As I
listened to Mr. Brady, I could not help but think about, you
know, I really wasn't going to go here. But a few weeks ago we
had a vote on unemployment benefits, and I keep thinking about
these women in my district, many of whom are head of household,
single mothers, and we all know the stories. I can tell it, you
know. I've seen it over and over again.
They're the ones who are at the bus stop, six o'clock in
the morning. They don't have time to jog because they've got to
get that kid to the babysitter. Many of these women were the
ones who lost their jobs. We had a vote, and there were many
who, sadly, on unemployment benefits, that would have left
these women with absolutely nothing, said no.
There's something awfully wrong with that picture, and I
guess my question, Ms. Lang, is, you know, what would you say--
I mean what can government or any of you all, what can
government do to encourage employers to be more sensitive to
this situation that we find ourselves in, where a woman becomes
penalized because she has a child? I mean what kind of things
can we do because, after all, that's what we do? We legislate.
And so I'm just wondering if you all have any suggestions.
In other words, I want folks to be all that God meant for them
to be, and I don't want them to be penalized because they
decide to have a child. Ms. Lang, you talked about
entrepreneurship and women, and I know Mr. Brady's very
interested in this.
My wife is an entrepreneur, and you're right. It is a 24-7
job, 24-7. Even when you go to the movies, you've got to
compete with the Blackberry, so what kind of things can we do
as government, in government, if anything?
Ms. Furchtgott-Roth. Well, we can make sure existing laws
against discrimination are enforced. If women work the same
hours as men, they get paid the same. They only have a penalty
for having children if they decide to cut back on their work
hours after they have children. Otherwise, the data show that
they're paid the same.
And right now, the biggest gender gap we have is in the
unemployment rates. Women's unemployment rates are about two
percentage points lower than men's. It was two percentage
points. Now it's 1.8. It's men who have the higher unemployment
rates right now, and that's a big problem we need to do
something about by getting the economy going and cutting taxes.
Representative Cummings. I understand, and you know what,
and you know what? I wish you would come to my district and
tell those women that the ones who have been losing their jobs,
because they were last hired, and therefore they are the ones
that lose their jobs. But Ms. Budig, Dr. Budig, I see you
shaking your head. I just want to hear what you're thinking.
Dr. Budig. I just want to respond to the statistical models
that are estimated to capture the motherhood wage penalty, is
based on an hourly wage measure. So it's not determined by the
number of hours that you work. It is not determined by
preferences, and, in fact, family friendly work places are not
the places most women work.
Female-dominated occupations are not more family friendly.
They have less authority, less benefits, less pay, and often
have very fixed schedules that are inflexible to the needs of
families. Those are some of the thoughts I was having.
Representative Cummings. Thank you very much.
Chair Maloney. Thank you. Thank you, Mr. Cummings, and I'm
interested in pursuing your line of questioning that basically
asks how can we unstick ourselves and make true progress
towards equality, and what government policies, Dr. Budig, do
you think would be helpful?
I do have one bill in, modeled after the bill that passed
in England, where you can request a flexible work schedule.
It's not mandatory, but it's shown just having the right to
request flextime, which an employer can grant or not grant, has
led to more family friendly situations. Senator Casey is now
carrying the Senate version of it. I've authored this with
former Senator Kennedy.
What about the ideas on paid family leave for the birth of
a child? Most industrialized countries do provide that. Can you
talk about some policies, Ms. Lang or anyone, or beginning with
you, Dr. Budig, that could lead us to a more family friendly
workplace and really try to attack the gender discrimination
that is spelled out in so many reports?
Dr. Budig. Yes, I can. I've been, for the last five years,
analyzing work family policies in 22 nations and looking at the
relationship with women's employment outcomes, and the
strongest policy is the publicly funded child care. High
quality, publicly funded child care is associated with lower
gender gaps in pay and a smaller motherhood wage penalty.
Paid leave available to both fathers and mothers after the
birth or adoption of a child is also linked to smaller gender
disparities and motherhood penalties. In terms of flextime, any
policies that are targeted to women only tend to not address
the gender disparities, and any policies that serve to
disconnect women from the workforce also don't address gender
disparities.
They may have other positive outcomes for families, but not
economic ones.
Chair Maloney. Anyone else, Ms. Lang.
Ms. Lang. Yes. I'm a proponent of shining light into
darkness. So I like transparency, and I think that we find
that, in industries where some of the industries where there is
total transparency about what the compensation is for
individuals, there's much less of a pay gap.
So you might be aware that the SEC ruled early this year, I
think the regulations took effect in February, about mandatory
disclosure of certain kinds of factors, and, in particular,
executive compensation was one that got a lot of attention. But
another one is about diversity on boards, and it is--it's not
any kind of requirement that there be diversity on boards, but
there is disclosure about whether it's a factor taken into
account, and if so, how is--how are policies implemented? This
is something that is happening in Australia and also in the
U.K., and I think that mandatory disclosure of compensation
would make it possible that you wouldn't have to go ask whether
your pay is the same as somebody else's. But in fact it would
be publicly available, and it's amazing how people get into
line when they think that the information might be on the front
page of The New York Times.
Chair Maloney. I would like to ask all of you about women's
roles as family breadwinners. The report showed that an
increasing number of women are the primary breadwinner for
their families. Dr. Budig, could you spell out for me the role
that women play as breadwinners now for their families, and how
important women's paychecks are for families' economic well-
being, and how this has changed over the last several decades?
I'll begin with you and then invite anyone else who would like
to add their comments.
Dr. Budig. Women's paychecks are really important to
families. Increasingly, because of the lack of gains in the
minimum wages, working class families cannot rely on a
husband's paycheck alone to support them, so women aren't
working always because they want to but because the family has
to have them in the labor market.
Women are increasingly contributing, are the primary
breadwinners in some families, although oftentimes that's a
transitory state for those families. I lost my train of thought
there. But particularly in----
Representative Brady. The issue was just breadwinners while
you were on it. You were doing it.
Dr. Budig [continuing]. The industries that men tend to
predominate in have been the hardest-hit in the most recent
recession, meaning that women who have been better able to keep
jobs in health care services and education are increasingly
more important to family economic well-being.
Chair Maloney. Well, any other comment on the importance of
women as breadwinners for their families?
Ms. Furchtgott-Roth. It's become increasingly important
because women's unemployment rates are lower right now, so a
lot of men who've been laid off in the manufacturing and
construction sector, whereas the service sector is continuing
to grow. It's really important that we get the unemployment
rate down so that men's unemployment rate falls also, as well
as women's.
That means reducing government spending, keeping taxes low,
reducing mandates on employers, so raising minimum wages means
that low-skilled workers are, in fact, priced out of jobs.
Having a $2,000 per worker mandate penalty if you don't have
the right kind of health care insurance also reduces employers'
hiring. It's important that we let employers be as flexible as
possible in their hiring, so they can hire more workers rather
than fewer.
Chair Maloney. We're going to close this shortly, but I'd
just like to ask Dr. Sherrill and Ms. Lang if you'd like to
comment on how the gender pay gap impacts families' financial
bottom line.
Dr. Sherrill. I think the key is that our report showed
that women managers earned over 50 percent of their family
incomes, so obviously it's a very important part of their
family income, and especially over time, if they're earning
less income than they otherwise might be receiving, it has a
cumulative effect.
Chair Maloney. Okay.
Ms. Lang. I think the gender pay gap basically puts less
money in women's pockets, and that's less money that they have
to spend, and that's the problem with getting the economy
moving again. It's the women who control over 75 percent of all
spending in this economy, and, if women don't have the money to
spend for themselves and their families in particular, we're
going to see a prolonged recession.
Chair Maloney. Well, I'd like to thank all of the
panelists. This has been a very informative discussion about
the persistence of the gender pay gap, and these new reports
from the GAO and Catalyst provide fresh evidence of the
stubborn pay gap facing women managers and women in executive
roles. Now more than ever, women's incomes are critical to
family economic well-being, and narrowing and ultimately
eliminating the pay gap is truly an economic issue for
families, and for our country. Today's testimony will help us
develop and enact effective policies that can move us in that
direction. The meeting is adjourned. Thank you.
[Whereupon, at 11:43 a.m., Tuesday, September 28, 2010, the
hearing was adjourned.]
SUBMISSIONS FOR THE RECORD
Prepared Statement of Carolyn Maloney, Chair, Joint Economic Committee
Good morning. Today's hearing on the gender gap among managers is
part of the Joint Economic Committee's in-depth look at women in the
workforce.
Women's work is crucial for family economic well-being,
particularly in these rough economic times. Women comprise nearly half
of the workforce.
And families are increasingly dependent on working wives' incomes,
with working wives now contributing 36 percent of household income
compared to 29 percent in 1983.
Because of this, gains in women's earning power--or the absence of
progress on that front--is an economic security issue for families.
Women earn just 77 cents on the dollar as compared to men--for doing
the same work. That figure hasn't budged in nearly ten years.
The report released today by the GAO provides additional evidence
of the persistence of the gender gap at the highest echelons of
industry.
The GAO finds a striking pay gap between male and female managers.
In 2007, female managers were paid 81 cents for every dollar earned
by their male manager peers, even after accounting for measurable
differences like age, education, and industry. The pay gap for women in
management shrank by just 2 cents from 2000 to 2007. In short, and in
no uncertain terms: we've stalled out.
No matter how you slice the data, the pay gap between male and
female managers persists. Even among childless managers, women earn
just 83 cents for every dollar earned by their male peers.
Both the GAO and Catalyst also find that we have made very little
progress in breaking the glass ceiling for women in management.
Women's representation in management professions in 2007 was
essentially unchanged from 2000.
And motherhood continues to be a penalty for women. A previous GAO
report showed that fathers enjoy a bonus, while mothers pay a penalty
for their decisions to have children. I like to call this the ``Mom
Bomb.''
Today's GAO report shows that Management Moms earn just 79 cents
for every dollar earned by Management Dads--a figure that hasn't budged
since 2000. In all but one industry, fathers are more likely than
mothers to be managers.
When working women have kids they know it will change their lives,
but they are stunned at how much it changes their paycheck. While
women's earnings are a critical element to families' economic security,
this is particularly true for families where the wife is a manager.
Across all industries, married female managers are just like male
managers in one key regard: they are their families' majority
breadwinners.
But married male managers' paychecks represent about 75 percent of
their families' total earnings, as compared to the 55 percent of total
family earnings represented by married female manager's paychecks.
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.
In order to further our understanding of the gender pay gap across
the economic spectrum, I am pleased to announce today that I will be
requesting a new report from GAO investigating gender pay and
representation issues among lower-wage workers. The GAO research team
provides a great service to our nation with their impartial, data-
driven analysis of pressing economic problems, and I look forward to
learning more from them when this report is issued next year.
Women are more productive and better educated than they've ever
been, but their pay hasn't yet caught up.
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 first piece of legislation that President Obama signed into
law--the Lilly Ledbetter Act--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 Working Families Flexibility Act, which I have sponsored, would
do just that. I'm very pleased to announce that just last week Senator
Casey introduced a version of that bill in the Senate.
I would like to thank today's panel of experts and I look forward
to the testimony today.
__________
Prepared Statement of Representative Kevin Brady
I am pleased to join in welcoming Dr. Sherrill, Ms. Lang, Dr.
Budig, and Ms. Furchtgott-Roth before the Committee this morning.
I support equal compensation for men and women and our nation's
laws that are in place to ensure women are not discriminated against in
the workplace. Where lax enforcement of our laws may exist, Congress
should fulfill its duty in conducting proper oversight.
But respectfully since today's hearing is the last one before the
November election, let us take a few moments to assess the economic
record of President Obama and the Democratic Congress.
After taking office, President Obama proposed a stimulus bill now
estimated to cost $814 billion by the Congressional Budget Office. The
Democratic Congress passed this bill with little scrutiny, and
President Obama signed it into law on February 17, 2009.
The President's two top economic advisers assured the American
people that if Congress were to pass President Obama's stimulus plan,
then
1) The unemployment rate would remain below 8.0 percent;
2) Payroll employment would increase to 137.6 million jobs by
the fourth quarter of 2010; and
3) 90 percent of the jobs created would be in the private
sector.
By the standards that the Obama administration set for itself, its
stimulus plan has failed miserably.
1) The unemployment rate has never been below 8.0 percent and
actually rose to 9.6 percent in August 2010;
2) The United States is 7.2 million payroll jobs short of the
Democrats' promise; and
3) Since February 2009, the private sector lost 3.1 million
payroll jobs. The only sector that has created payroll jobs is
the federal government, which added a mere 116,000 payroll
jobs.
Incredibly, since the Democrats took control of Congress in January
2007, payroll employment has fallen by 6.6 million jobs.
While failing to offer new job opportunities to unemployed workers,
the Democrats' stimulus plan, their federal takeover of healthcare, and
their other reckless spending schemes have accomplished two things:
record federal budget deficits and a ballooning federal debt. For the
first time since Alexander Hamilton was Secretary of the Treasury,
financial market participants are actually questioning the long-term
creditworthiness of the U.S. government.
Another way to judge the economic performance of President Obama
and the Democratic Congress is to compare this recovery with a recovery
after a recession similar in depth and length: the August 1981 to
November 1982 recession.
In the first four quarters of recovery under President Reagan,
average real GDP growth was a robust 7.8 percent. In the first four
quarters of the recovery under President Obama, average real GDP growth
was a mediocre 3.0 percent. Even more troubling, growth has slowed from
5.0 percent in the fourth quarter of 2009 to an anemic 1.6 percent in
the second quarter of 2010. Indeed, this may be as good as it gets
under Democratic economic policies.
During the first 14 months of the Reagan recovery, payroll
employment grew by 3.9 million jobs. During the first 14 months of the
Obama recovery beginning in July 2009, payroll employment fell by
329,000 jobs.
Moreover, the unemployment rate dropped by 2.8 percentage points to
8.0 percent during the first 14 months of the Reagan recovery, while
the unemployment rate rose to 9.6 percent during the first 14 months of
the Obama recovery.
The actual data, as opposed to the hypothetical ``what if'' studies
of the Congressional Budget Office and Mark Zandi, are clear and
convincing. The Democrats' stimulus has failed, and the Obama recovery
is subpar.
President Obama and the Democratic Congress have irresponsibly
pursued economic policies that have created uncertainty and needlessly
undermined public confidence. The most recent example of this is the
failure of the House and Senate leadership to hold a vote on renewing
the 2001 and 2003 tax reductions that expire at the end of this year.
Although economists of all political stripes are demanding that
Congress renew all of these reductions, Speaker Pelosi and Majority
Leader Reid prefer to let taxes increase on all Americans rather than
see the defeat of their ``divide and rule'' strategy of class warfare
on the floor of the House or the Senate. What entrepreneur would make
job-creating investments now when he or she does not know what his or
her income tax rate will be next year?
On November 2, 2010, the American people will sit in judgment on
this Democratic Congress. We can and should have economic policies that
instill confidence, promote growth, and create jobs. President Reagan
has shown us the way forward--reducing federal tax rates, controlling
federal spending, cutting regulatory red tape, and opening foreign
markets to American products through trade liberalization. I trust that
the American people will institute a mid-course correction.
I look forward to hearing the testimony of today's witnesses.
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Prepared Statement of Representative Elijah E. Cummings
Thank you, Chairwoman Maloney. I welcome our witnesses and thank
the Chairwoman for holding this hearing on such an important topic: the
issue of gender wage equity.
Some people may wonder why we are holding this hearing. After all,
earlier this month, the U.S. Census Bureau reported that gender pay
disparities are at an all-time low. Unfortunately, there is additional
data which reveals underlying trends that are deeply concerning.
For example, although the pay gap seems to be closing, experts are
attributing this positive step to the poor economy, which has caused
many laid-off men to take lower-paying jobs.
Additionally, this year, for the first time in history, women
earned more Ph.Ds than men. However, the recent data show that women
continue to earn less than men at every level of education.
A third alarming trend is the severity with which these pay gaps
are impacting African-American and Latina women, who are earning 62.1
cents and 53 cents, respectively, for every dollar earned by their
white male counterparts.
In addition to the injustice such disparities inflict on women who
are being shortchanged, such conditions send a poor message to young
women, those whom we are trying to encourage to stay in school, attend
college and pursue their dreams.
How can we take serious steps toward lowering truancy rates,
increasing college completion rates, and encouraging young people to
pursue the jobs of tomorrow if we can't assure all young people, both
men and women, that their hard work and perseverance will be rewarded?
I am proud that this Congress has taken the issue of wage
discrimination seriously. We enacted the Lilly Ledbetter Fair Pay Act,
which prevents employers from escaping responsibility for wage
discrimination by hiding that discrimination and running out the clock.
In addition, last year, the House passed the Paycheck Fairness Act
of 2009, which strengthens the Equal Pay Act of 1963 by giving victims
of gender discrimination the same remedies available to victims of
other kinds of discrimination.
Pay inequality doesn't just harm individual workers, it harms
families and our nation's economy.
Single women who are heads of household are twice as likely to be
in poverty as single men. Nearly four in 10 mothers are their families'
primary breadwinners, and nearly two-thirds are significant earners.
Therefore, for millions of families, equal pay for women determines
whether they will reach the middle-class or whether they will live in
poverty.
Additionally, the wage gap has a long-term impact on women's
economic security, especially in retirement, as unequal pay affects
Social Security and pension benefit calculations.
Therefore, I look forward to hearing from our witnesses about this
issue and about steps Congress can take to ensure that all citizens of
a nation dedicated to the principle of equal opportunity for all are
equally remunerated for their work.