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May 21 2019

Kamala Harris Unveiled a Pay Gap Attack Plan That's Bound to Fail

by Patrice Lee Onwuka

Senator Kamala Harris just unveiled her plan to close the gender pay gap. Some are giving her credit for bringing a new idea to the table, but they will be sorely disappointed when they realize that a government mandate on business won’t close the gap.

The gender pay gap is largely driven by the choices that women and men make about their careers and future. Efforts to use legislation are futile at best and could have harmful unintended consequences at worst.

Harris wants to force corporations with 100 employees or more to prove that they are not engaging in pay discrimination. This is different from voluntary transparency.

Companies that don’t pay men and women the same, without reason, will be fined. She thinks she will raise about $180 billion over a decade which would be used to fund a national paid family and medical leave law.

Here’s why Harris’s plan is doomed to accomplish the goal of closing the pay gap.

First, it starts from the wrong premise: the gender pay gap is entirely due to gender discrimination. According to the raw data, women earn 80 percent of what men earn. However, when controlling for factors such as hours worked each day, education, seniority, and occupation, the gap shrinks to a few percentage points. (Check out: What Drives the Pay Gap)

Just isolate hours worked each day and we see the wage gap shrink to 11 percent because men work on average 8.3 hours each day compared to the 7.8 hours that women work per day.

Second, women make tradeoffs that lower overall earnings. As noted, women work less than men to manage household and childrearing responsibilities. Some women like flexibility and will pursue occupations or careers that offer greater flexibility than bigger paychecks. Others are drawn to study majors or pursue careers that they are passionate about and find fulfilling, but offer lower pay. 

The most common jobs for women generally pay less than the most common jobs for men. Many college majors that lead to high-paying roles in tech and engineering are male dominated, while majors that lead to lower-paying roles in social sciences and liberal arts tend to be female-dominated, placing men in higher-paying career pathways, on average. (Check out how college majors impact the wage gap)

The point is that most of the pay gap is controllable by the choices women make.

It is illegal to pay men and women differently on the basis of gender (or race or ethnicity). It is legal to pay a man and woman differently for valid reasons such as those above.

Before jumping to conclusions, it’s important to understand what is real discrimination and what is the result of choices and differences between individuals. These truths have been missing from the pay gap debate for too long.

Senator Harris copy and pasted this idea from Iceland. The country just instituted a brand new, first-of-its-kind mandate on business that penalizes them for unexplainable pay differences between men and women.

It’s too early to even know how the plan works in Iceland, but the bigger concern is that Iceland is a tiny nation compared to the U.S. Unlike the diverse labor force of the United States, Iceland’s labor force is homogenous and the workers share similar backgrounds which may make comparisons of workers simpler than here.

Whatever the case, treating companies as guilty until proven innocent could lead them to make other business decisions that leave workers worse off such as salary cuts, discrimination against women of child-bearing age, or resentment toward women.

Women can earn more when empowered to negotiate for what they want. A tight jobs market also forces pay higher and offers abundant opportunities so that a woman can leave and find a better-paying job. Senator Harris may mean well, but her plan would lead to worse outcomes for working women. That is exactly what we don't need.





Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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