Pay Inequity and Other Animals

Jason Pankow of Fistful of Talent has a post up today about pay inequity.  His post alludes to the current law (Equal Pay Act) and proposed legislation of Paycheck Fairness Act (sometimes referred to as the "Lilly Ledbetter Fair Pay Act" or "Fair Pay Act").  Coincidentally, Michelle Obama has a post up today at BlogHer (where Cindy McCain has also been invited to blog) on the same topic.

Jason says,

We don't need another law to make things right.  We shouldn't be waiting for politicians to address this problem.  How is another law going to work any better than the current one?  What we need are recruiters who address any offers that are proportionally lower for a female hire.  What we need are Gens [ed note: HR generalists] who notice substantially lower salaries to bring it up and fix the problem.

Lilly Ledbetter lost her Supreme Court case, not because the company was right in not paying her properly, but because she didn't file her case within the proper time frame.  Personally, I think all it would have taken is one person to say, "Hey...she's being paid half of what he is.  This needs to be fixed."  It's our jobs to make sure our companies follow the rules.

Here's my take: If one sees the problem as only a Lilly Ledbetter type situation (where it is grossly obvious that pay is not equitable due to gender discrimination), Jason's proposed solutions make sense.  By and large, I think we have come a long way in eliminating a lot of situations similar to the Ledbetter case...not all of course, but we've made great strides.  I'm 100% with Jason in encouraging HR & recruiting pros to do everything they can to fix mistakes when they encounter them.

The thing is - the problem isn't only Lilly Ledbetter type situations.  In fact, I would even go so far as to say that blatant acts of gender discrimination in pay are the least of our worries compared to the systemic discrimination so deeply entrenched in our society. 

When the House passed the Paycheck Fairness Act, Ann Bares from Compensation Force blogged about her thoughts on the proposed legislation as well as a statement given to Congress by attorney Camille Olson, testifying on behalf of the U.S. Chamber of Commerce.  Here is the portion of Camille's statement that Ann quoted (and emphasized) in her post,

And, until now, aside from prohibiting sex-based wage differentials, the EPA has left the determination of the value brought to a particular employer by the performance of a particular position and its duties to the employer, the employee, and the market. Section 7 of the Act, however, calls upon the Department of Labor to issue “Guidelines” to compare wages for “different jobs” in order to determine if the pay scales are “adequate” and “fair” – based on an outsider looking in. Also problematic is that these Guidelines would effectively preclude consideration of many of the factors that quite legitimately and necessarily drive salary decisions, including, most notably, marketplace factors. The “Guidelines” would be accorded the same deference as other guidelines promulgated by administrative agencies in the employment context, from great deference to, in effect, the law.

In short, the Paycheck Fairness Act’s Section 7, like Section 3 discussed above, would directly involve the Department of Labor in the wage-setting process of employers, and, just as problematic, inject the widely-rejected theory of “comparable worth” into that process. And in deciding what jobs are worth to individual employers, the Government would apparently exclude consideration of some of the factors most relevant to that highly individualized determination, such as: marketplace value and supply and demand; the nature of a position vis-à-vis whether it involves physical labor; a company’s position in the marketplace; employers’ varying business needs and priorities; employees’ educational backgrounds; employees’ experience, both qualitatively and quantitatively; and regional differences.

I would like to share with my readers a comment that was posted on Ann's post.  The commentor's name is listed as E. James (Jim) Brennan.  I don't know this gentleman, but his comment really sent it home for me [emphasis mine]:

I read the Act and failed to find anything worthy of the C of C's ominously hysterical exaggerations about ignoring the Market. This is the same organization that has historically misrepresented every attempt to rectify centuries of proven discrimination against women and other protected classes, because it does not serve the interests of its members. Of course... Hey, they're a union and a lobbying enterprise.

Anyone who really studies The Market knows its weaknesses... it is totally amoral. The Market reflects and perpetuates the bias of its sponsors and will unblinkingly maintain systemic discrimination. Race discrimination was partially/mostly eliminated only through Affirmative Action. There has never been any affirmative action for women and other historically underpaid classes. The old self-adjusting Market often simply DOESN'T, when its operators continue to act from biased stereotypes. Nurses have been in shorter supply than engineers for a lot longer and the response has not been commensurately higher wages but instead imported talent and the replacement of RN functions by lower paid proxies, as it was for secretaries and other short-supply female-dominated positions. The pay of dentists has fallen relative to other medical professions as the female percentage increased to the tipping point, per Don Treiman and Heidi Hartman's Part-Correlation research for the NAS many decades ago. Their formulae are still valid.

Even the old ACA report in the early 1980s, by Chuck Shanie I think it was, on the pay of compensation association members proved it, because the last factor in the stepwise regression formula was... after you multiplied, added, etc., for all the positive standard skill, effort, responsibility and working condition factors that everyone knows ... to subtract 14% if you were female. Long story short, a Market approach can merely perpetuate historical discrimination ... because if female-dominated jobs have always been paid 86% of male rates, the surveys will continue to accurately predict the same bias. It's called systemic discrimination.

Granted, The Market rules that you can never pay below replacement-cost levels... but that same Market permits male-WASP jobs to be grossly relatively overpaid out of the savings from the tighly-constrained minimums paid to others. The problem is in the maximums, not the minimums. And with the psychology of the victims, who have refused to take up the axe handles of the men who bridled at the inequities they suffered.

None of this, of course, implies goverment control of job evaluation or pay classification... but the rules should be fair and not set according to biased principles. Every employer should be permitted its own unique pay structure as long as it is neutral in its treatment of protected classes. THAT's the real issue... and this legislation would promote that ideal. IMHO, of course. 

Is the Paycheck Fairness Act the answer to our problems with pay inequity and/or systemic discrimination?  I don't know.  What I do know, is that I am happy that people are talking about this issue - and the issue behind the issue.  And they are talking about it A LOT.