Equal Pay and Substantive Economic Citizenship
By Cassandra Jones Harvard | June 19, 2023
Sixty years after the passage of the Equal Pay Act, the gender wage gap remains ensconced in the American economy. Women’s salaries relative to men’s by any comparison – occupation, experience, race, or education – demonstrate how deeply gender inequality is solidified in American society.
Even more disturbing is the persistence of a racialized gender wage gap. The depth of the under-payment of Black women relative to white men is staggering. By one estimate Black women and women of color lose out on roughly $1 million of income over a career. Yet, most of society is oblivious to the fact that wage inequality is ubiquitous for Black women.
A spate of federal statutes takes aim at pay discrimination based on gender. Three statutes – the Equal Pay Act (“EPA,” 1963), Title VII of the Civil Rights Act (“Title VII,” 1964), and the Lilly Ledbetter Fair Pay Act (“Lilly Ledbetter,” 2009) – provide an individual with a right to sue employers for previous pay discrimination. These laws are inadequate to address wage disparity, in part because their remedial scope is limited to addressing individual rather than systemic harm. Though well-intended, these statutes were not specifically designed to close the gender wage gap and serve merely as evidence that the law recognizes gender inequality.
Cultural beliefs that undervalue women as wage-earners are at the heart of the gender wage gap. Employers penalize women because they perceive women as unwilling to separate themselves from family responsibilities to make a total commitment to work. Similarly, women’s work has been segregated by occupation. Women dominate care work, such as childcare, and these fields are paid nominally. Additionally, racism and sexism in the workplace intertwine to perpetuate economic inequality for Black women and women of color.
The intersection of race, ethnicity, and gender lead to different economic realities for women of color. Laws such as the Equal Pay Act are not intended to correct the market drivers of pay inequity.
Wage inequality is an indicator of the failure of a democracy to accord full economic citizenship. Neither women nor Black Americans were included in the Constitution, denying both groups democratic rights and protections. In a democracy, citizens have a democratic right “to seek employment, income, education, and welfare benefits.” Economic citizenship is about the freedom and opportunities that a government provides for individuals to attain economic security. The gender wage gap is evidence that women are continuing to fight for full and equal participation in this democracy.
The continuing wage inequality that women and all Black Americans experience is because economic citizenship rights have not been fully afforded to them.
The existence of laws prohibiting race and sex discrimination in employment indicate awareness that employment inequality has far-reaching political and social consequences.
Laissez-Faire Approach to Equal Pay
What makes gender-racial wage gaps so persistent? Examining the political economy of wage equality, or how politics and law influence markets and economies, adds clarity. The predominant view and the economic theory underlying American labor markets is laissez-faire, or the idea of a free and autonomous market. In this view, women, individually or collectively, are responsible for contesting any economic disadvantage that results from their participation in the workforce. The free-market theory imposes no responsibility on the government to correct gender bias or discrimination because the presumption is that the market should function independent of government intervention. As a result, gender and racial inequity is legitimized.
Arguably, laissez-faire is a tacit assumption underlying the discrimination statutes. The Equal Pay Act and Title VII, though corrective, serve only as tepid market corrections.
While both target discriminatory employer action, they also require that each aggrieved individual person or class of persons initiate legal action instead of addressing the structural barriers that contribute to unequal pay.
For instance, a significant obstacle to equal pay is employers’ reliance on salary history. When a woman’s “old” salary is used as a basis for setting compensation for a “new” position, underpayment self-perpetuates. Moreover, the lack of mandated data collection about salaries along lines of gender, race, and ethnicity; the failure to require employers to post salary ranges for job openings; and the lack of consistent enforcement of equal pay rules all perpetuate pay inequity.
Steps Toward Equal Pay
As intractable as this problem may appear, there are some rather simple ways to erase the systemic biases that sustain the gender wage gap.
First, we must address occupational segregation. Women remain disproportionately represented in certain occupations, such as the service and home and healthcare sectors, that tend to pay less. If the skills and expertise needed to perform these positions were to be re-evaluated, these jobs would pay higher wages. And when men enter fields dominated by women, they earn more. Properly valuing the skills of a position should lead to an increase in wages across the board for occupations dominated by women.
Second, US law should recognize intersectional remedies are needed for the intersectional harm of pay discrimination in the workplace. Congress should amend Title VII and the Equal Pay Act to recognize that race and sex discrimination are mutually intertwined in our economy.
As presently enacted, neither the EPA nor Title VII differentiates the extent of the discrimination that Black women and other women of color experience based on both gender and race. The Equal Employment Opportunity Commission, which has enforcement jurisdiction over the two statutes, has adopted intersectionality as a doctrine. However, only a few federal courts have recognized the concept as a viable idea. Most courts view intersectional claims as an impermissible broadening of Title VII, although it is quite common for claims of discrimination to be made on multiple bases. Allowing Black women and other women of color to use intersectionality, when applicable, is the only way to remedy discrimination that may be both racist and sexist.
Finally, eradicating race and gender-based economic inequality requires the “disinfectant of sunshine.”
Instead of allowing imperfect market conditions to close the gender wage gap, Congress should pass legislation to set a reasonable time frame for ending the gender wage gap.
This is a two-step process.
First, Congress must establish a national commitment to pay equity by mandating employer reporting requirements under Title VII. The Paycheck Fairness Act, which has passed the House, would strengthen the Equal Pay Act by prohibiting employers from asking about salary history and incentivizing employers to do a more thorough review of pay inequity. While this is an important step, a mandatory reporting policy could make wage inequity more visible and prod the government to take action to end the gender wage gap.
Second, Congress must adopt a transparent pay policy, as is the norm in the United Kingdom, France, and Germany, where companies report on gender pay gaps. A reporting requirement requires employers to establish useful salary information for employees. A transparent pay policy also gives employers a basis to explain legitimate salary differentials and provides employees with critical information about how they stand in comparison to their colleagues.
Equitable workplaces, equal opportunities, and fair pay – the process of creating these begins with acknowledging the need for change. The political and economic barriers that curtail the economic security of women must be abolished. This requires a more deliberate action by policymakers to address the gender wage gap, including its racialized aspects. Breaking down barriers for all women will open new opportunities for everyone, regardless of gender.
Cassandra Jones Harvard is Professor of Law in the School of Law at the University of South Carolina
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