Gender pay gap is a myth

Yet men can wait. Today, the Joint Economic Committee held a hearing entitled “New Evidence on the Gender Pay Gap for Women and Mothers in Management” at which I was a witness. Chair Carolyn Maloney (D-NY) used the hearing to argue for the Paycheck Fairness Act, which would vastly expand the role of the government in employers’ compensation decisions.

No matter that the new General Accountability Office study on women in management released at the meeting was accompanied by a letter from GAO Director of Education, Workforce, and Income Security Issues Andrew Sherrill, stating: “Our analysis neither confirms nor refutes the presence of discriminatory practices.”

Mr. Sherrill’s letter continued, “Some of the unexplained differences in pay seen here could be explained by factors for which we lacked data or are difficult to measure, such as managerial responsibility, field of study, years of experience, or discriminatory practices, all of which can be found in the research literature as affecting earnings.”

So if these data are found to affect earnings in the research literature, and GAO doesn’t have the information, why is the GAO study new evidence?

The hearing was replete with stock phrases such as “women earn 77 cents on a man’s dollar” (not true when women are compared with men in the same jobs, with the same experience), “women have stalled out” (women’s unemployment rate is eight percent, men’s is 9.8 percent, and it’s women who have stalled out?) and “we haven’t broken the glass ceiling” (hard to do on a flexible schedule).

Rep. Maloney called for passage of the Paycheck Fairness Act, which has been voted out of the House, but is stuck in the Senate. Feminists are desperate to get it passed this session of Congress, because Republicans are forecast to have a majority in the House next session — which would be the end of the bill for the foreseeable future.

The bill responds to a false problem. When the data are understood correctly — taking account of choice of vocation and on-the-job years — the pay gap largely disappears.

When differences in hours worked, time in the workforce, education, or choice of vocation are considered, many academic studies show that women make around 94 percent of what men make. The remaining six cents are due to unexplained variables, one of which might be discrimination.

A woman who chooses a part-time job, or one with a flexible schedule, in order to have both family and career time might think of herself as successful. But to feminists, she is a societal problem in need of a solution because she is on a lower earnings path than a man.

With Title VII of the Civil Rights Act, the Equal Pay Act, and the Lily Ledbetter Fair Pay Act all on the statute books, women do not need more remedies for discrimination. Courts have sufficient tools, and the pending bill would only burden employers with more regulations and paperwork, further discouraging hiring.

The Paycheck Fairness bill, if enacted, would be a boon to lawyers because it would spawn a tidal wave of lawsuits and enmesh employers in endless litigation.

It would no longer allow employers to defend differences in pay between men and women on the grounds of seniority and merit. Rather, differences would have to be justified on the grounds of “business necessity.” This change could prohibit male store managers with college degrees from being paid more than female cashiers — because the college degree for the male manager might not be consistent with “business necessity.”

The bill would expand the number of establishments subject to the law from one to all establishments of the same employer in a county. Now, employees who do substantially the same work in one location have to be paid equally. Including all locations would mean that cashiers in high cost, or unpleasant areas, where the employer has to pay more to attract workers, have to be paid the same as those in low-cost, more pleasant areas.

Class-action suits would be facilitated by the bill’s opt-out clause. Now, if a worker wants to participate in a class-action suit against her employer, she has to affirmatively agree to take part, or opt in. Under the bill, she would automatically be included unless she opted out. This provision would increase the numbers in class-action suits and would be a boon to plaintiffs’ lawyers.

Under the law now, employers found guilty of discrimination owe workers back pay. Under the pending bill, they would have to pay punitive damages, of which a quarter or a third typically goes to plaintiffs’ lawyers.

The bill would require the Equal Employment Opportunity Commission to promulgate regulations to collect more data, including information about the sex, race, and national origin of employees, requiring ruinous paperwork for employers.

American women have been relatively fortunate in this deep recession. Rather than yet another redundant legal remedy for discrimination against women, how about some help for unemployed men?

Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at Hudson Institute and the author of “How Obama’s Gender Policies Undermine America”, released this month by Encounter Books.