Addressing the Gender Wage Gap in the United States: Shortcomings of Federal Legislation

Introduction

Over the past five decades, the gender composition of the United States labor force has undergone a rapid transformation. Of all the issues that have arisen in the area of sex discrimination in employment, the compensation differential between men and women is the most controversial. Despite federal laws prohibiting sex-based employment discrimination and mandating equal pay for substantially similar work, the gender pay gap persists.

Historically, laws were enacted to exclude women from particular occupations and limit the number of hours worked. This exclusion was justified by the ideology of separate spheres for women and men in the nineteenth and twentieth centuries in which women were perceived as subordinate to men, and confined to the domain of the domestic household. Gradually, the importance of the participation of women in the workforce became evident after a shortage of labor following World War II. Women were integrated into the economy but were paid less. In 1950, twenty-eight percent of adult women worked outside the home, half on a part-time basis.1 By 1990, over fifty- seven percent of women worked outside the home, and roughly seventy percent were full-time. In 2004, women consisted of about fifty-nine percent of the total U.S. workforce.2

According to the 2013 United States Census Bureau data, full-time female workers earned seventy-eight cents for every dollar earned by male workers.3 This notoriously cited statistic can negatively spur the highly politicized issue of gender wage inequality, if misinterpreted. The number represents the median earnings of full-time, year-round workers aged fifteen years and older.4 However, when the median weekly wages of men and women are examined, women earn eighty-two cents to every dollar men earn.5 The gap is further reduced to thirteen cents when analyzing hourly wages of men and women, but this excludes salaried workers, and is thus often not used.6

Regardless of the method of measurement, the gender wage gap has endured, notwithstanding legislation that has sought to prohibit employers from utilizing such discriminatory practices. Employment experience and firm seniority are influential types of human capital that explain a fraction of the gender wage gap. Soloman Polachek (1975) asserted that approximately half of the gap could be explained by differences in the amount of time men and women have been employed.7 Steve Sandell and David Shapiro (1978) held that sex differences in years of experience explained about a quarter of the gap in pay.8

Other scholars have argued sex differences in job experience can explain up to forty-four percent of the gender gap in earnings among whites, with a part of earnings explained by racial segregation.9 Research suggests that a comparison of men and women with similar characteristics results in a reduction of the raw gap. Economists Francine Blau and Lawrence Kahn found that women’s gains in education and work experience led to a one-third decline in the gap between the 1980s and 1990s.10 Irrespective of the influence of such factors, a large portion of the gender pay gap remains unexplained. Blau and Kahn estimated that 41.1 percent is due to overt or subtle discrimination.11

Thus, given the level of contribution of women in the workforce and the large unexplained portion of the gender pay gap, it remains pivotal to examine the roots and potential remedies of the pay gap. This paper examines how the federal government was skeptical in ensuring equality in compensation among sexes at the time of enactment of the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964. Further, it analyzes the shortcomings of current federal legislation in targeting the root of the gender pay gap, and sheds light on the idea of comparable worth—the idea that men and women should be paid according to the worth of their work—as a potential solution to stabilize the gender earnings gap in the United States.

Explaining the Gender Wage Gap

Academic scholars and policymakers have investigated the various causes of the gender earnings gap. Aside from variables such as educational background, number of hours worked, and labor force attachment, there are three notable, prevailing theories: 1) women hold a different, less-valued skill set in comparison to men, 2) overt wage discrimination continues to persist, and 3) women as a group are concentrated in lower-paying occupations than men.

The first explanation of the gender earnings gap is rooted in the historical perception of women in American culture. Traditionally, women have held jobs in which employers have undervalued their work because it is rated on a scale favoring “male” traits, namely physical strength and aggression.12 The low value attached to a woman’s work was and arguably continues to be, reflected in their lower salaries regardless if a man performed the same work. An aspect of this assertion is the relative weakness of women in labor force attachment. As women are likely to temporarily leave their careers for childbirth or to raise children, the result is often a decrease in human capital, delays in promotion, or even a reduction in wages. Second, some argue that wage salary discrimination is the primary explanation for the persistence of the gender pay gap.

Although a likely contributing factor, this theory has been addressed by federal legislation, predominantly the Equal Pay Act of 1963, which prohibits wage discrimination between sexes for equal, or substantially equal, work. This topic will be explored later in this paper. Lastly, and perhaps most convincing is the idea of occupational segregation. Proponents of this hypothesis deem that women as a group are underrepresented in certain male-dominated occupations, and the resulting jobs held by women tend to be lower-paid.

Although not the topic of this paper, it is crucial to recognize that the gender pay gap widens when analyzing women across various races.13 Latino women are the most underpaid minority group in the United States. There are other confounding variables that could explain this phenomenon, such as the type of jobs they may be employed in as a demographic compared to Asian American women, but nonetheless it is crucial to recognize that as the percentage of female or minority workers in a job category increases, the average wage falls. This is because female or minority concentration depreciates wages.14

History of Federal Legislation

The history of both Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963 demonstrates that members of Congress had great hesitancy when enacting legislation to secure the economic rights of women.

The first major legal measure at the federal level to remedy the unexplained wage differential was the Equal Pay Act of 1963. The initial act contained an exemption for “employees in bona fide executive, administrative, or professional capacity…” but this was shortly removed by an amendment passed in 1972.15 The amended act contains three noteworthy provisions: the protection of equal pay for equal work, four affirmative defenses, and limitations on remedies. The Equal Pay Act of 1963 was passed as an amendment to the Fair Labor Standards Act of 1938 and requires employers to pay equal wages to male and female employees performing “substantially” the same work.16

It ensures that employers pay employees of both sexes equal rates for jobs that are equivalent in terms of skill, effort, responsibility, and working conditions. The crucial emphasis is the fact that the work performed must be substantially equal. At face value, this legislation targets issues of overt sex discrimination in matters of compensation. But the reality is that men and women often hold different occupations. The hesitancy to boldly move forward with gender equality in terms of wage is further evident in the limitations of the scope of this prohibition enacted by Congress with the creation of four affirmative defenses. Under this clause, wage discrimination is permitted if payment is made pursuant to a (i) seniority system, (ii) merit system, (iii) system which measures earnings by quantity or quality of production, or (iv) differential based on any other factor other than sex.17 While this act was passed with little struggle, its built in affirmative defenses depict the subtle resistance members of Congress displayed about equalizing wages among men and women.

Title VII of the Civil Rights Act of 1964 is considered the most comprehensive equal employment opportunity statute adopted by the federal government. The struggle to enact it was highly controversial and its purpose was to eliminate the effects of racial bias from hiring and promotion decisions in private-sector employment.18 The primary impetus for the passage of this bill occurred after the assassination of President John F. Kennedy in November 1963. His successor, President Lyndon B. Johnson, dedicated the Civil Rights Act, a series of bills in Congress at the time, to his memory, stating “We have talked long enough in this country about equal rights…it is time now to write the next chapter, and to write it in the book of laws.”19

Interestingly, gender did not constitute the extent of those equal rights, and was originally not intended to be included in the bill. An amendment adding “sex” to “race, color, religion, and national origin” as prohibited employment criterion was proposed the last day of the debate on the floor of the House of Representatives. Howard Smith, Chairman of the House Rules Committee, added “sex” to the bill in an attempt to block the passage of the entire act. A few proponents of the amendment had argued that sex discrimination was wrong justifying that passage was necessary to ensure white women would not be at a disadvantage in relation to African American women.

Despite Smith’s efforts, the amended bill passed, exhibiting that Title VII owes its origins to a misfired political tactic. The result of this last-minute amendment was that little guidelines existed to aid courts in interpreting the meaning of sex as intended by Congress. The essential difference between the EPA and the sex discrimination provisions outlined in Title VII is that former is limited to areas of compensation while the latter can be applied to all conditions of employment.20

The Bennett Amendment

The Bennett Amendment is a provision embedded into Title VII of the United States Civil Rights Act of 1964. It incorporates specific terms of the Equal Pay Act of 1963 to clearly define under what circumstances an employer may provide different compensation to employees on the basis of sex. The text reads:

“It shall not be an unlawful employment practice under this subchapter for any employer to differentiate upon the basis of sex in determining the amount of wages or compensation paid or to be paid to employees or an employer if such differentiation is authorized by the provisions of section 206(d) of Title 29 [The Equal Pay Act]…”21

It has spurred additional debate amongst academic scholars on the extent to which comparable worth can be contested. In County of Washington v. Gunther, (1981), the United States Supreme Court examined the language of the Bennett Amendment and the Equal Pay Act. A group of women prison guards sued the county of Washington on the grounds of unequal wages.22 The district court rejected this claim arguing that male guards were responsible for overseeing more prisoners, but the 9th Circuit Court of Appeals held that sex-based wage discrimination could be tried under Title VII provided that the challenged wage rate is not exempted under the Equal Pay Act.23

The Court concluded that the Amendment was intended to incorporate into Title VII only the four affirmative defenses in the Equal Pay Act, not the equal work standard. Consequently, as long as an allegedly discriminatory compensation practice is not based on seniority, merit, quantity or quality production, or "any other factor other than sex," it can be challenged under Title VII even though no employee is of the opposites sex.24Continued on Next Page »