[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

=======================================================================

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 28, 2010

                               __________

          Printed for the use of the Joint Economic Committee



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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

                              ----------                              

                                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.
  

                                  
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