California Fair Pay Act: Fair Pay Act Signed

Published: October 9, 2015

California Fair Pay Act: Fair Pay Act Signed, On Tuesday, California governor Jerry Brown chose a fitting location to sign a state bill aimed at narrowing the gap between men’s and women’s wages-a national park named after Rosie the Riveter, the cultural icon modelled after several real-life working women. Rosie, with her don’t-mess-with-me expression and Michelle Obama biceps, is the closest thing we have to a national mascot for feminism; the surge of women into the workforce during the Second World War, which Rosie encouraged and symbolized, helped erase the taboo on women working alongside men, advancing one of the early goals of feminism. Soon after the war’s end, though, a complication emerged, as statistics began to show that women weren’t being compensated as well as men. In an attempt to address this imbalance, in 1963 President John F. Kennedy signed the Equal Pay Act, which bars employers from paying employees of one sex wages that are lower than those paid to people of the opposite sex who do the same work. The wage gap has since narrowed, but it still exists. On average, working women still earn seventy-nine cents for every dollar that men make.

In order to close the wage gap altogether, it helps to look at why it persists, so many years after Rosie’s prime. One common argument holds that the Equal Pay Act isn’t strong enough. It applies only to employees who are doing the same job and working at the same physical job site, and it doesn’t prevent employers from retaliating against employees who discuss their wages with one another. At the federal level, these critics have advocated for what’s known as the Paycheck Fairness Act, which would remove some perceived loopholes from the Equal Pay Act and would bar employers from punishing employees for discussing wages. That legislation has stalled at the federal level, though-so, as is often the case, statehouses have sought to pass their own similar bills. In California, the Fair Pay Act puts in place some provisions similar to the federal ones; it also bars employers from setting wages for any of its employees at rates lower than those paid to employees of the opposite sex for similar work-not only for equal work-and applies to people who work at different offices for the same employer.

At Rosie the Riveter/World War II Home Front National Historical Park, in the city of Richmond, Governor Brown told an audience of supporters that “the inequities that have plagued our state . . . are slowly being resolved with this kind of bill.” The gender gap in wages is already narrower in California than in the nation as a whole, but it’s still significant; women there make eighty-four cents on the dollar. But whether the Fair Pay Act will resolve the gap isn’t as clear as Brown might hope. Research suggests that wage discrepancies between men and women have to do with factors more complicated than, for instance, bias on the part of managers-and that a mandate on employers might, therefore, not be a sufficient fix.

One oft-cited 2007 study, by the economists Francine Blau and Lawrence Kahn, aimed to quantify the factors behind the gender gap. Looking at data on wages from 1998, they found that women’s chosen occupations and industries, versus men’s, accounted for forty-nine per cent of the gap; the jobs and sectors made up disproportionately of women simply tend to pay less than those occupied mostly by men. There were other factors, too. Women’s relative inexperience accounted for eleven per cent of the gap, for example, and men’s higher representation by unions explained four per cent. There was, however, a significant portion of the gap that was unexplained-forty-one per cent. Blau and Kahn, along with others who have followed up with related research, have tried to deconstruct what could be behind that share. Is it discrimination? Or other factors, like the fact that women tend to work fewer hours than men-Blau and Kahn’s research looked at total salaries for full-time workers, rather than at hourly wages-and that they are likelier to take time off from work while raising children?

Claudia Goldin, an economist at Harvard, has arrived at one intriguing answer. In several of the industries with large wage gaps that she has studied, the difference in pay rates is explained largely by a single factor: These industries-the legal and finance professions, for instance-tend to more richly compensate people who are willing to work long, inflexible hours. And those people are likelier to be men than women. As an example, consider a corporate law firm whose clients demand attention at all hours, as opposed to the general counsel’s office at a college; the firm might have an incentive to compensate someone willing to work eighty hours per week more than double what the college would pay a lawyer who works forty hours. In some professions, the difference accounts for such a significant portion of the wage gap that, Goldin told me, getting rid of the premium pay for the most dogged-and often male-employees could eliminate the gender gap altogether. In fact, she has found that the gender gap is smaller in many science and tech professions, where long, inflexible hours aren’t rewarded to the extent that they are in the legal and finance fields.

Our conversation turned to the question of the best approach to eliminating the wage gap. “Many people find it very useful to have an adversary-to find a person who they’d like to get rid of, and if you get rid of that person or force that person to be fair, then you will have solved the problem,” Goldin said. “That’s where the word ‘discrimination’ comes in, or ‘prejudice.’ I’m not saying these don’t exist, but everything that I have done, everything that I have read, indicates that even if we reduced all of that to zero, we’d still have a very large gap.”

Given this, then, what kinds of laws should politicians pass to improve the situation? And how should employers and employees change their practices? In recent years, the Facebook C.O.O., Sheryl Sandberg, has exhorted women to advocate for themselves and urged men to do their fair share at home; the former government official Anne-Marie Slaughter, meanwhile, has focussed her attention on calling for more family-friendly workplace policies. In one recent paper, Goldin, intentionally or not, seems to propose a third path-she writes, “The solution does not have to involve government intervention and it does not depend on the improvement of women’s bargaining skills or heightened will to compete. Nor must men become more responsible in the home (although that would greatly help). What is needed are changes in how jobs are structured and remunerated, enhancing the flexibility of work schedules.”

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