Obama, America's greatest class, race and gender warrior, is throwing his support behind a new bill, the Paycheck Fairness Act, ostensibly to fight rampant gender discrimination in wages. The law would significantly expand government interference in our economy. It would result in an explosion of litigation that will impact many businesses and that will undoubtedly threaten the viability of many small businesses. As such, it will inevitably increase unemployment. It will be a gold mine for trial attorneys and it will act as a means to funnel public funds to community organizers and their left wing groups. But it is a wholly unnecessary law. According to a 2009 study commissioned by the Bureau of Labor, the wage gap has nothing to do with gender discrimination.
We stand today in the midst of not merely a recession, but a mancession. Unemployment in this recession is hitting males at vastly greater rates than women. At last report, men accounted for some 80% of the job losses in this recession. As of June, 2010, according to the Bureau of Labor Statistics, the unemployment rate for all men, sixteen years of age in over, was 10.4%. That compared to 8.9% for women. Yet men, and particularly white men, are not a victim class recognized by Obama and the left. Consequently, they receive no assistance. So why is it that women in particular require more assistance now?
Obama is claiming that they do because of a gap in wages caused by gender discrimination. Explaining why America needs to pass the Paycheck Fairness Act, Obama issued a statement on Tuesday:
. . . Women make only 77 cents for every dollar that men earn. The gap is even more significant for working women of color, and it affects women across all education levels. As Vice President Biden and the Middle Class Task Force will discuss today, this is not just a question of fairness for hard-working women. Paycheck discrimination hurts families who lose out on badly needed income. And with so many families depending on women's wages, it hurts the American economy as a whole. In difficult economic times like these, we simply cannot afford this discriminatory burden.
That same justification is also at the center of the bill now in the Senate, where it tells us that:
. . . many women continue to earn significantly lower pay than men for equal work. These pay disparities exist in both the private and governmental sectors. In many instances, the pay disparities can only be due to continued intentional discrimination or the lingering effects of past discrimination.
So there you have it. We still live in a nation where misogynists and evil white males are oppressing women. The problem is, the facts are in complete contradiction.
In 2008, the Department of Labor commissioned CONSAND Research Corp. to do a study to determine why the gender pay disparity exists and what to do about it. The final report, issued in 2009, concluded that the major reasons for the disparity were that:
A greater percentage of women than men tend to work part-time. Part-time work tends to pay less than full-time work.
A greater percentage of women than men tend to leave the labor force for child birth, child care and elder care. Some of the wage gap is explained by the percentage of women who were not in the labor force during previous years, the age of women, and the number of children in the home.
Women, especially working mothers, tend to value “family friendly” workplace policies more than men. Some of the wage gap is explained by industry and occupation, particularly, the percentage of women who work in the industry and occupation.
After discussing additional legitimate reasons for the raw wage disparity, the author concluded:
. . . this study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct.
It would seem that Obama and the left are being far less than honest in their push to pass the Paycheck Fairness Act.
Discriminating against women in wages has been unlawful since the Equal Pay Act was passed in 1963 (codified at 29 U.S. § 206(d)). As it currently stands, if a woman complains of unequal pay, the employer may then defend by pointing to any of several defenses, including that the disparity is justified by "any other factor other than sex." Obama would modify that defense by adopting a much stricter standard - that employers must show the difference in pay was based on a “bona fide factor other than sex” that is “job related” and “consistent with business necessity." What precisely those terms mean in any particular context will be argued out ad infinitum during very costly and protracted litigation. Importantly, the bill adds that, even if the employer is able to establish the defense above, the plaintiff could still succeed by convincing a jury that some alternative practice could have been adopted that may have negated any need for the disparity. This will open up the floodgates of litigation.
For but one example, what if a woman is hired for a job at 30k, but a man with several years more experience and training is hired for $33k. Is the business then responsible for paying for additional training for the woman to justify bringing her salary up to $33k. How much of a role should experience play in setting wages? Those would be jury questions under the Paycheck Fairness Act, thus taking reasonable decisions on compensation out of the hands of business and putting them in the hands of trial attorneys, judges and juries.
Additionally, the Paycheck Fairness Act would vastly expand the scope of what plaintiffs could use as evidence in making a case for discrimination. Under the Equal Pay Act, a plaintiff is limited to showing a disparity in pay within the particular business and locale at which they work, or in a locale close by. The Paycheck Fairness Act mandates that the plaintiff may look at least county wide, but then goes on to provide the EEOC will have the final say in expanding the geographic area at issue, thus potentially allowing for comparisons between numerous different locales with very different economies. So should a woman working in Henderson, TN, population 6,325, be able to make out a claim for wage discrimination using as her proof the wages of a male working for the same company in Atlanta? Likewise, can a plaintiff look at similarly sized cities throughout the U.S.? If you are a business owner and the Paycheck Fairness Act is passed, the bottom line is you have to assume the answer to both questions is yes, at least until the EEOC makes a final determination.
But all of this gets far worse. For not only does the Paycheck Fairness Act make it much more likely that an employer may be held liable for what we would consider reasonable business decisions, they would also face far greater potential liability if they lose.
Under the Equal Pay Act of 1963, if a plaintiff won, they could recover two times lost wages plus attorneys fees. Under the Paycheck Fairness Act, the damages are unlimited. An employer may be liable for both compensatory and punitive damages, making law suits under PFA a potentially fatal landmine for businesses of all sizes - but particularly small businesses - and a gold mine for the plaintiff's bar. The costs of litigation and the potential for crippling judgments will likely lead many businesses to settle suits for which they have meritorious defenses. And for all of this, the costs get passed on to the public.
Then there are the massive reporting provisions that businesses will be required to meet. The Paycheck Fairness Act charges the EEOC to "issue regulations to provide for the collection of pay information data from employers as described by the sex, race, and national origin of employees."
Lastly, the Paycheck Fairness Act authorizes the Secretary of Labour to give grants to "private nonprofit organization" or "community-based organizations" in order to fund programs that will:
. . . help girls and women strengthen their negotiation skills to allow the girls and women to obtain higher salaries and rates of compensation that are equal to those paid to similarly-situated male employees.
History tells us that a provision of this ilk is nothing more than a conduit to funnel ever more of our tax dollars to ACORN type organizations.
To sum up, this is a bill meant to solve a problem that does not exist. Obama and the left, in claiming that the gap in wages between men and women is because of discrimination, are lying through their teeth in yet another act determined to balkanize America. The proposed bill would inject the courts into core business decisions. It would result in an explosion of litigation that could cripple businesses at a time when our economy can ill afford any more shocks. And the bill would be yet another means for of our Community Organizer in Chief to funnel money to community organizers and their groups. This is a horrid piece of legislation that would do nothing to eliminate discrimination and everything to harm business and our economy. In other words, it is yet another unjustified major assault on our economy and the fabric of our country by Obama and the left.