November 17 2010
Equal Pay Obsession as Women Lead in the Economy
Are Men Being Left Behind?
Just one day before the Senate was scheduled to take up the Paycheck Fairness Act, June O'Neill offered an insightful opinion piece in the Wall Street Journal on Washington's Equal Pay Obsession:
Women in the workplace don't face rampant pay discrimination, and yet the Senate may soon pass a bill-already passed in the House-premised on the erroneous charge that they do. The Paycheck Fairness Act (PFA) would be a harmful addition to the many federal laws that already protect women and men from labor-market discrimination.
The original Equal Pay Act of 1963 made it illegal for firms to pay different wages to women and men who performed equal work on jobs in the same establishment. Title VII of the 1964 Civil Rights Act outlawed discrimination against women and minorities in all aspects of employment, including hiring, promotion and compensation. Additional protections came with the 1978 Pregnancy Discrimination Act; the 1991 amendments to Title VII, which boosted penalties for discrimination; and the 2009 Lilly Ledbetter Act, which essentially eliminated the time limit for filing discrimination claims.
In addition, for more than 40 years two major federal agencies have been dedicated to fighting labor-market discrimination: the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance.
Some firms undoubtedly discriminate against women, but their number is small and the federal government's existing antidiscrimination apparatus is more than adequate. This new legislation would simply provide a feast for lawyers-and, by increasing the cost of employing women, would likely harm its intended beneficiaries.
The Paycheck Fairness Act is second only to the Promoting Natural Gas and Electric Vehicles Act of 2010 on the list of bills to be considered for a cloture vote in the Senate tomorrow. IWF recently published a policy paper on the Unintended Consequences of the Paycheck Fairness Act, which lists the following harmful consequences should the Act be passed:
• Employers would face far greater liability and potentially frivolous lawsuits
• Employers would be burdend with more regulations and paperwork
• The role of government in employers' compensation decisions would be vastly expanded
• Flexible working arrangements would be discouraged
It seems that proponents of the Paycheck Fairness Act overlook that we have entered an age in which women lead in the economy. If anybody needs extra encouragement and support to adapt to our rapidly expanding post-industrial economy, it's men. The Atlantic had an excellent article on the End of Men this summer, highlighting some of the features of the 21st century economy that allow women to excel economically while leaving men behind. Below is a summary of some of the main points.
Post-industrial society is fueled by services which require more thinking, communicating, and an inclusive management style that focuses on collaboration, rather than on physical strength, stamina, and a command and control management style, features men excelled at in the past. Women are taking the lead in this new economy and country-wide data reflects this trend.
In 2006, the Organization for Economic Cooperation and Development devised the Gender, Institutions and Development Database, which measures the economic and political power of women in 162 countries. With few exceptions, the greater the power of women, the greater the country's economic success.
While female CEOs are still a rarity, a 2008 study by researchers at the Columbia Business School and the University of Maryland, shows that female leadership qualities are already prominent drivers of firm success:
[The] study attempted to quantify the effect of this more-feminine management style. [...] Firms that had women in top positions performed better, and this was especially true if the firm pursued what the researchers called an "innovation intensive strategy," in which, they argued, "creativity and collaboration may be especially important"-an apt description of the future economy.
The Atlantic predicts that, if men don't bridge the gap and successfully adapt to the needs of a post-industrial society, more of American society will reflect the current situation in African American communities where women are the main breadwinners and decision makers who raise their children without men.
The sociologist Kathryn Edin spent five years talking with low-income mothers in the inner suburbs of Philadelphia. Many of these neighborhoods, she found, had turned into matriarchies, with women making all the decisions and dictating what the men should and should not do.
The women, she explained, "make every important decision"-whether to have a baby, how to raise it, where to live. "It's definitely ‘my way or the highway,'" she said. "Thirty years ago, cultural norms were such that the fathers might have said, ‘Great, catch me if you can.' Now they are desperate to father, but they are pessimistic about whether they can meet her expectations." The women don't want them as husbands, and they have no steady income to provide. So what do they have?
Edin thinks the most compelling theory is that marriage has disappeared because women are setting the terms-and setting them too high for the men around them to reach. "I want that white-picket-fence dream," one woman told Edin, and the men she knew just didn't measure up, so she had become her own one-woman mother/father/nurturer/provider.
The whole country's future could look much as the present does for many lower-class African Americans: the mothers pull themselves up, but the men don't follow. First-generation college-educated white women may join their black counterparts in a new kind of middle class, where marriage is increasingly rare.
Women are leading the way in this new economy. The more pertinent question is: Are men being left behind? The current policy focus on securing equal pay for women is misguided, and passing the Paycheck Fairness Act will likely result in doing more harm than good.