© National Committee
on Pay Equity
   
 
 
Pay Equity
Information
   
 
Questions & Answers on Pay Equity
 
Q:
  What is pay equity?
   
A:
 

Pay equity is a means of eliminating sex and race discrimination in the wage-setting system. Many women and people of color are still segregated into a small number of jobs such as clerical, service workers, nurses and teachers. These jobs have historically been undervalued and continue to be underpaid to a large extent because of the gender and race of the people who hold them. Pay equity means that the criteria employers use to set wages must be sex- and race-neutral.

   
Q:
  What is the legal status of pay equity?
     
A:
 

Two laws protect workers against wage discrimination. The Equal Pay Act of 1963 prohibits unequal pay for equal or "substantially equal" work performed by men and women. Title VII of the Civil Rights Act of 1964 prohibits wage discrimination on the basis of race, color, sex, religion or national origin. In 1981, the Supreme Court made it clear that Title VII is broader than the Equal Pay Act, and prohibits wage discrimination even when the jobs are not identical. However, wage discrimination laws are poorly enforced and cases are extremely difficult to prove and win. Stronger legislation is needed to ease the burden of filing claims and clarify the right to pay equity.

   
Q:
  How large is the wage gap?
     
A:
 

2010 Median Annual Earnings
of Year-Round, Full-Time Workers

        All Men                        All Women
    $47,715    100%             $36,931    77%

In 2010, the earnings for African American women were  $32,290, 67.7 percent of all men's earnings (from 67.5 percent in 2009), and Latinas' earnings were $27,992, 58.7 percent of all men's earnings (up from 57.7 percent in 2009). Asian American women's earnings at $41,309 dropped from 90 percent of all men's earnings in 2009 to 86.6 percent in 2010.

Source: U.S. Census Bureau, Current Population Survey, 2011 Annual Social and Economic Supplement, Series PINC-05

   
Q:
  Why is there a wage gap?
     
A:
 

The wage gap exists, in part, because many women and people of color are still segregated into a few low-paying occupations. More than half of all women workers hold sales, clerical and service jobs. Studies show that the more an occupation is dominated by women or people of color, the less it pays. Part of the wage gap results from differences in education, experience or time in the workforce. But a significant portion cannot be explained by any of those factors; it is attributable to discrimination. In other words, certain jobs pay less because they are held by women and people of color.

   
Q:
  Hasn't the wage gap closed considerably in recent years?
     
A:
 
The wage gap has narrowed by about 15 percentage points during the last 23 years, ranging from 62 percent in 1982 to 77 percent in 2010. Since 1973, however, approximately 60 percent of the change in the wage gap is due to the fall in men's real earnings and only about 40 percent to the increase in women's wages. At this rate of change, the Institute for Women's Policy Research estimates that it will take 50 years to close the wage gap.

   
Q:
  Is it possible to compare different jobs?
   
A:
  Yes, employers have used job evaluations for nearly a century to set pay and rank for different occupations within a company or organization. Today, two out of three workers are employed by firms that use some form of job evaluation. The federal government, the nation's largest employer, has a 70-year old job evaluation system that covers nearly two million employees.

   
Q:
  Who really needs pay equity?
     
A:
  Women, people of color, and white men who work in jobs that have been undervalued due to race or sex bias need pay equity. Many of these workers are the sole support for their families. In addition, it is estimated that 70 percent of women with children under 18 work outside the home. (Up from 44.9 percent 20 years ago.) Discriminatory pay has consequences as people age and across generations. Everyone in society is harmed by wage discrimination. Therefore, everyone needs pay equity.

   
Q:
  Is pay equity an effective anti-poverty strategy? 
     
A:
  Yes, pay equity helps workers become self-sufficient and reduces their reliance on government assistance programs. A recent study found that nearly 40 percent of poor working women could leave welfare programs if they were to receive pay equity wage increases. Pay equity can bring great savings to tax payers at a minimal cost to business. Adjustments would cost no more than 3.7 percent of hourly wage expenses.

   
Q:
  Will the wages of white men be reduced if pay equity is implemented? 
     
A:
  No, Federal law prohibits reducing pay for any employee to remedy discrimination. Furthermore, male workers in female-dominated jobs benefit when sex discrimination is eliminated, as do white workers in minority-dominated jobs. Pay equity means equal treatment for all workers.

   
Q:
  Will achieving pay equity require a national wage-setting system?
     
A:
  No, pay equity does not mandate across-the-board salaries for any occupation, nor does it tamper with supply and demand. It merely means that wages must be based on job requirements like skill, effort, responsibility and working conditions without consideration of race, sex, or ethnicity.

   
Q:
  Doesn't pay equity cost employers too much?
     
A:
  In Minnesota, where pay equity legislation meant raises for 30,000 state employees, the cost was only 3.7 percent of the state's payroll budget over a four-year period--less than one percent of the budget each year. In Washington State, pay equity was achieved at a cost of 2.6 percent of the state's personnel costs and was implemented over an eight-year period. Voluntary implementation of pay equity is cost effective, while court-ordered pay equity adjustments can lead to greater costs. Discrimination is costly and illegal.

   
Q:
  Are wage inequalities the result of women's choices?
     
A:
  Again, part of the wage gap is attributed to differences in education, experiences and time in the work force. However, the overwhelming evidence that wage discrimination persists in America can be found in numerous court cases and legal settlements, Department of Labor investigations, surveys of men and women on the job, and salary surveys that control for age, experience and time in the workforce. While women sometimes take time out of the workforce to raise children, it should be noted that when couples are deciding who should stay home with children, the fact that the wife is earning a lower salary impacts that decision. In addition, some of the other explainable factors can sometimes be attributed to discrimination. For example, if women and men have different jobs in a company, women may not be choosing the lower paying jobs. They may have trouble advancing in a company due to bias about women's abilities or levels of commitment.

   
Q:
  Will implementing pay equity disrupt the economy?
     
A:
  No. The Equal Pay Act, minimum wage, and child labor laws all provoked the same concerns and all were implemented without major disruption. What disrupts the economy and penalizes families is the systematic underpayment of some people because of their sex or race. When wages for women and people of color are raised, their purchasing power will increase, strengthening the economy. One survey found that a growing number of businesses support the elimination of wage discrimination between different jobs as "good business" and that pay equity is consistent with remaining competitive.

   
Q:
  What is the status of efforts to achieve pay equity?
     
A:
 

Pay equity is a growing national movement building on the progress made in the 1980s, when twenty states made some adjustments of payrolls to correct for sex or race bias. (Seven of these states successfully completed full implementation of a pay equity plan. Twenty-four states plus Washington, DC conducted studies to determine if sex was a wage determinant. Four states examined their compensation systems to correct race bias, as well.)

In recent years, pay equity bills have been introduced in more than 25 state legislatures. On the federal level, two bills have been introduced since the mid-1990s, the Paycheck Fairness Act and the Fair Pay Act. The Paycheck Fairness Act, which would amend the Equal Pay Act and the Civil Rights Act of 1964 to provide more effective remedies to workers who are not being paid equal wages for doing equal work, was passed by the House of Representatives in the 110th and 111th Congresses. Hearings on the bill were held March 11, 2010 in the Senate, but it was defeated by a 58-41 vote on Nov. 17, 2010. The Fair Pay Act would expand the Equal Pay Act's protections against wage discrimination to workers in equivalent jobs with similar skills and responsibilities, even if the jobs are not identical.

   
Q:
  What can I do about pay equity?
     
A:
 

Urge your senators to support the Paycheck Fairness Act (S.182). The Senate Health, Education, Labor, and Pensions Committee held a hearing, "Fair Share for All: Pay Equity in the New American Workplace" on March 11, 2010, with testimony about the Paycheck Fairness Act; see www.womenspolicy.org.

If you need more information on how to resolve a personal situation involving unfair pay, you can call:

  • The Equal Employment Opportunity Commission (EEOC) at 800-669-4000
  • The Equal Rights Advocates (ERA) Advice and Counseling Hotline at 800-839-4372