The Paycheck Fairness Act Vote Happens Today: So What Is It?

There's a situation that many, if not all of us have been in, and it's pretty embarrassing: that awkward moment when you realize that a colleague makes more than you do.

Upon discovering the disparity, there are usually a few things that race through the mind:

1. Are they smarter than I am?


2. Are they colluding with someone?


3. Are they adding more value than I am?

Unfortunately for us, many a time the assumed answer is the last in this parade of litanies. We assume our colleagues are doing better than we are.

We're often wrong.

The Unexplained Gap

Pay discrimination is real, and it seems to be a market failure that's not fixing itself. The convergence of male and female wages that we saw in the 1980s slowed down significantly in the 1990s and has seemed to plateau to a gap that's budged very little since (Blau, Kahn 2006). This "unexplained gap" has been the subject of much discussion, and now, finally, legislation to follow up the Equal Pay Act of 1963 and the Lilly Ledbetter Fair Pay Act of 2009. That's the Paycheck Fairness Act.

What's the bill say?

Basically, the Paycheck Fairness Act makes it harder for employers to prevent employees from discussing their wages amongst themselves. The idea is to make wages more transparent and hold companies accountable for discrepancies in pay between employees that have little distinguishing them other than gender.

Who's backing it?

The biggest proponents you'll hear about are President Barack Obama and Kirsten Gillibrand (D-NY).

Will the Paycheck Fairness Act actually reduce pay discrimination?

The process an employee must go through to put the Paycheck Fairness Act into practical use is pretty arduous, but the hope is that increased transparency will encourage compliance on the part of employers.

 

 

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Comments

[NWOslave]

06:36 PM on 06/17/2012

There is no wage gap, it's been proven false so many times it barely bears repeating. All the bill will do is destroy any small businesses who can't afford to lawyer up. The lilly ledbetter act and all the rest simply hamstring all small businesses. Do you think it's a coincidence that after every one of these legislations is passed small companies are swallowed up? This country is run from wall street, not main street. The federal reserve calls the shots and Obama jumps. Pretty soon you'll be able to work for walmart or the state, and the both answer to the mighty federal reserve.

[Cadron Boy]

01:54 PM on 06/05/2012

This will pass. Why? Most legislators are lawyers and this bill will provide them with thousands upon thousands of "billable hours". The way the law is crafted the PFA allows employees to sue businesses that pay different workers different wages—even if those differences have nothing to do with the employees’ sex. These lawsuits can be brought for unlimited damages, giving a windfall to trial lawyers. Any financial benefits they reap, however, would come at the expense of the employer and ultimately the workers themselves. This is just another regulation to hamper small businesses who won't be able to afford the flood of litigation -- even now we can't fire or repimand an employee without placing our business at significant risk. In California all my peers in the healthcare industry routinely pay severance pay upon dismissal of an employee (even due to theft and concurrent drug use) simply to minimize the risk of post-employment litigation -- to claim "sexual discrimination" in California will always result in a favorable judgement for the plaintiff regardless of the facts. .