Equal Work Should Mean Equal Pay: Nearly 50 Years of the Equal Pay Act

By: Bernadette Smith, Women & Girls Foundation of Southwestern PA, Board Member

Women have made enormous progress in the workforce since the Equal Pay Act (EPA), but the stubborn fact remains that four-and-a-half decades later, the basic goal of the Act has not been realized. Furthermore, a critical opportunity has been missed this year … Congress failed to pass the Paycheck Fairness Act. This legislation would have strengthened the EPA by requiring employers to demonstrate that wage differentials are based on factors other than gender, prohibited retaliation for workers inquiring about employer wage practices and strengthened penalties for equal pay violations, among other key components. In short, this Act would have closed loopholes that currently allow pay inequities to persist despite the EPA.

Why is this so important to American working women and why does this disparity still exist?

The wage gap has narrowed, but it is still significant. Women earned 59% of the wages men earned in 1963; in 2008 they earned 77% of men’s wages—an improvement of about half a penny per dollar earned every year.

Under the leadership of Esther Peterson, director of the Women’s Bureau and an Assistant Secretary of Labor in the administration of President John F. Kennedy, Congress in 1963 passed the Equal Pay Act as an amendment to the Fair Labor Standards Act of 1938. The historic Act requires employers to pay equal wages to men and women doing equal work on jobs which require equal skill, effort, and responsibility and are performed under similar working conditions. In the event the employer is found guilty of violating the Equal Pay Act, back pay can be doubled if the employer’s violation is determined to be willful.

The Equal Pay Act was the first federal effort to bar discrimination by private employers on the basis of gender. Because the law was part of the Fair Labor Standards Act, wage and hour inspectors routinely reviewed company records and cited employers, rather than depending on complaints to alert them to violations. During the next decade 171,000 employees received $84 million in back pay. In the 1970s, however, President Jimmy Carter’s administration transferred enforcement to the Equal Employment Opportunity Commission, which filed few Equal Pay Act cases.

A variety of explanations for the persistent wage gap have been offered. One is that older women are factored into the wage gap equation, and many of these women from an older generation work in jobs still subject to the attitudes and conditions of the past. In contrast, the rates for young women coming of age in the 1990s reflect women’s social and legal advances. In 2005, for example, women under 25 working full-time earned 92% of men’s salaries compared to those 25 and older, who earned 77% of what men made. Does this imply that once the oldest generation of women has retired the wage gap will shrink considerably? Perhaps, but even the narrow wage gap of 92% is unacceptable under the Equal Pay Act. And, we must ask ourselves if it’s fair to let older working women persistently make so much less than their male counterparts. Young men and women have always had more comparable earnings than those of their elders. Starting salaries are generally low, and do not accurately reflect the advantages that accrue, or fail to accrue, over time as men advance and women stay in place.

In a 2009 study, the Institute for Women’s Policy Research analyzed the wage gap between men and women in occupations at similar skill levels. The study revealed that women made less than men in all categories except one – bartending. Female bartenders made 111% of their male counterparts in 2009. The two occupations where the wage gap was the smallest: registered nurses and fast food workers where the gap was 5% and 3% respectively.

The two occupations with the largest gap? Physicians/surgeons and human resource managers. Female physicians/surgeons made 64% and human resource managers 69% of their male counterparts.

In 2009, the Women’s & Girls Foundation of Southwest Pennsylvania commissioned a study entitled, “The Female Face of Poverty in Pennsylvania.” The results were quite sobering – not only as they relate to women, but also the significant impact gender discrimination has on the most vulnerable in our society: children. Working women in Pittsburgh earn 25% LESS than their male counterparts. Women of color earn 35% less!

Moreover, women face a double disadvantage. Women earn less, which translates into lower Social Security benefits, lower retirement savings and lower home ownership. Additionally, women often incur the expense of caring for dependent children, grandchildren and elderly relatives. In Pennsylvania, single women represent 26% of households with dependent children. However, they comprise 75% of families living in poverty. And, women over 65 are three times more likely to live in poverty than men over 65.

Ironically, gender diversity is good for the bottom line! A recent study of FORTUNE 500 companies showed that firms with the highest representation of women in top management experienced far better financial performance than companies with the lowest. Return on Equity for the top tier was 35% higher than the lowest group. Gender diversity is a characteristic of companies with excellent financial performance, and developing women managers and leveraging their talent is smart business! In an economy where knowledge drives results, diversity is a precious asset.

The time has come to make equal pay a reality. Failure to pass the Paycheck Fairness Act is a profound setback, which means starting over again in 2011 with a new House and Senate comprising Congress.

Every call, email and tweet makes a difference – even now. So, what can you do? First of all, we must understand the power we have as women, especially women with a vote. Write or call your current and incoming state and federal representatives and ask them to support enforcement of a new Paycheck Fairness Act to strengthen the Equal Pay Act. You can also contact local and federal offices of the U.S. Equal Employment Opportunity Commission, or visit http://www.eeoc.gov/contact/index.cfm for more information.

Additionally, seek out organizations that serve as watchdogs on this issue, such as the Women and Girls Foundation. You can also contact the media and ask them to cover this important issue. Most importantly, be your own best advocate in addressing your personal wage gap. Be informed about earnings in your field and in your region, figure out how much you can earn and formulate a strategy to ask for your raise. There are resources online that can help you do this and there are resources in this region to help you, including the Women and Girls Foundation. Understanding our worth and our worthiness is an all-important step.

Together, we can make a difference!

Bernadette Smith, CFP, is Senior Portfolio Manager at Fifth Third Private Bank. She serves on multiple boards, including the Women & Girls Foundation.  Recently, she was appointed by Gov. Rendell as a member of the Inter-branch Commission for Gender, Racial and Ethnic Fairness,  received the YWCA “A Tribute to Women Leadership Award and the Athena Award.