On Tuesday, the Senate voted down the Paycheck Fairness Act.
Sounds bad, doesn't it?
That depends on who you ask. The Paycheck Fairness Act, an update to the 45-year-old Equal Pay Act, was meant to do three things:
- Require employers to prove that any pay differences between men and women doing the same work aren't related to gender
- Prevent employers from taking any action against employees who discuss their pay with co-workers
- Require the Labor Department to take a more active role in eliminating pay disparities
Senate majority leader Harry Reid will be able to bring up the legislation again, but whether or not the bill ultimately passes, it has raised a lot of questions about equal pay and workplace discrimination: What are the existing protections anyway? Are they adequate? And just how big is the gender wage gap?
Why Do We Need a New Law?
Before diving into changes the new legislation will make, let's first review the laws already in place. First, there's the Equal Pay Act of 1963, which effectively aims to prevent workplace discrimination by ruling that men and women must be allowed equal jobs in a given workplace. Basically, it means that women can't be banned from any job in an organization and must be compensated like their male peers. The motto of the act was "equal work for equal pay."
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Get started with a free financial assessment.
Then, in 1964, Congress passed the Civil Rights Act, which prohibited discrimination on the basis of sex and race in the workplace when it comes to hiring, promoting or firing. Since issued, the law has been expanded by later amendments to prevent discrimination based on race, color, sex, creed and age.
That brings us to the Paycheck Fairness Act. The newest proposal is meant to strengthen the provisions put in place by the Equal Pay Act by making it easier for women to negotiate for equal pay: The act would incentivize employers to adhere to the law by issuing stricter penalties in instances of wage discrimination and by prohibiting employers from taking action against workers who disclose their wages to colleagues. It would also create a grant for a salary negotiation training program for women and girls as well as reinstate the Equal Opportunity Survey, which required all federal contractors to share their employment practices and was issued from 2000-2006.
The Argument Against the Bill
Not a single Republican Senator supported the bill, using the following arguments:
- The Civil Rights Act of 1964 and the Equal Pay Act of 1963 are enough protection against wage discrimination.
- The bill would allow the government to undermine employee wages (letting the government interfere with employers' decisions and taking away their power of deciding wages).
- It will encourage lawsuits, since there will be more legislation to support a claim.
- It could place unnecessary stress on small businesses.
- It might violate employee privacy by allowing employees to reveal their co-workers' pay.
- It could eliminate employee pay incentive programs, which deliberately pay some workers more than others.
Despite this vehement refutation of the bill, Republican Senator Dean Heller was quoted as saying that "pay discrimination based upon gender is unacceptable," but that the new bill doesn't effectively address workplace inequality.
How Unequal Are We, Really?
Before we explore this question, we just want to make it clear: Gender wage equality is really important to us at LearnVest, and we want all women to be paid their due. That being said, the gender wage gap numbers were all over the place, and we found ourselves skeptical of all of them.
The usual estimate is that a working woman makes about 70-80 cents to the dollar. The White House says in this fact sheet the exact number is 77 cents, but it's not the only number out there. There's also 82 cents and ... 95?
One explanation of the 77 cents figure is that women choose lower-paying jobs in order to attend to familial responsibilities. It's been said that when you compare male and female employees of the same background and qualifications, the pay gap narrows drastically. However, the White House says that the 77-cents-to-the-dollar figure remains even when you control for job choice, experience and education.
What Does the Bill's Rejection Mean for You?
Among all of the debate about the Paycheck Fairness Act's efficacy and exactly how much women make as compared to men, one particular fact sticks out to us: Even if it is 95 cents to the dollar (the highest figure floating around), women are still making less than men—even women of equal experience and qualification, doing the same job.
Knowing that alone, it's up to you to take charge of your situation. Negotiate for your salary, pursue the career you want and let the wage gap be a statistic for Senate debates rather than a fact of your daily life.