The Senate is set for a cloture vote today on the Paycheck Fairness Act, which requires that employers collect and provide to the government certain payroll data, classified by the sex, race, and national origin of employees. The data would be used for assessment of “fairness” of employee wages based on race and gender.
As previously reported on HUMAN EVENTS, Senate Majority Leader Harry Reid (D–Nev.) filed cloture on the motion to proceed to three bills right before Congress recessed for the elections. Included among those three bills is the Paycheck Fairness Act, which passed the Democrat-led House in January of 2009 and is part of a left-wing wish list being pushed in the lame-duck session.
A boon for trial lawyers, the Paycheck Fairness Act, if passed, would place costly, job-killing new burdens on employers, including the following:
• Requirements for employers to prove that pay differentials are not based on sex and are “consistent with business necessity.”
• Unlimited compensatory and punitive damages for violations of the Equal Employment Act to be levied against private-sector employers.
• Characterization of all employees as belonging to “the same establishment” if they are working in the same county or in similar political subdivisions of a state.
• Automatic inclusion of employees as members of a class-action lawsuit, unless they somehow become aware of the suit and specifically opt out of it.
• Creation of more conditions for lawsuits.
• Creation of a constitutionally-questionable grant program based solely on one’s being female.
Diana Furchtgott-Roth, a senior fellow and the director of the Center for Employment Policy at the Hudson Institute, told HUMAN EVENTS that the bill would vastly expand the role of government in employer compensation decisions.
“The bill would require the government to collect data from employers on the sex, race, and national origin of employees, significantly adding to red tape, paperwork, and hiring costs, and trapping firms in costly litigation,” Furchtgott-Roth said.
She provides analysis in a new report showing that discrepancies in wages are based on many different factors.
“Average wage gaps do not represent the compensation of women compared to men in specific jobs, because they average all full-time men and women in the population, rather than comparing men and women in the same jobs with the same experience. Data from the U.S. Department of Labor’s Bureau of Labor Statistics that women earned 80 cents for every dollar that men earned in 2008 and in 2009, using full-time median weekly earnings, ignore fundamental differences between jobs, experience, and hours worked,” the report states.
“If we compare wages of men and women who work 40 hours a week, without accounting for any differences in jobs, training, or time in the labor force, Labor Department data show the gender wage ratio increases to 86 percent.”
“When the wage gap is analyzed by individual occupations, jobs and employee characteristics, regional labor markets, job titles, job responsibility, and experience, then the wage gap shrinks even more. When these differences are considered, many studies show that men and women make about the same. For instance, a 2009 study by the economics consulting firm CONSAD Research Corporation, prepared for the Labor Department, shows that women make around 94% of what men make. The remaining six cents are due to unexplained variables, one of which might be discrimination,” the report finds.
“Dozens of studies on the gender wage gap that attempt to measure ‘discrimination’ have been published in academic journals in the past two decades. Unlike the Bureau of Labor Statistics, which uses simple mathematical tools to calculate the wage ratio, these studies use an econometric technique called regression analysis to measure contributing effects of all factors that could plausibly explain the wage gap.”
“At a time when the unemployment rate is above 9 percent and almost 15 million Americans are out of work, the Paycheck Fairness Act would impose substantial new burdens on employers that would encourage hiring overseas and discourage hiring in America,” Furchtgott-Roth warns. “As the Washington Post concluded in a recent editorial, ‘Discrimination is abhorrent, but the Paycheck Fairness Act is not the right fix.’”
President Obama supports passage of the Act. His Office of Budget and Management released a statement on Tuesday in full support of the legislation, hoping for change in what the Administration perceives as widespread conditions of gender and race biases in workplaces nationwide.
“The persistent gap between men’s and women’s wages demonstrates the need for legislative change. This bill would address this gap by enhancing enforcement of equal pay laws. Specifically, it would prohibit retaliation against employees who ask about or discuss wage information, and it would provide more effective remedies for women subjected to discriminatory pay practices. S. 3772 would strengthen the Equal Pay Act by closing judicially created loopholes in the law and bringing its class action rules into conformity with the Federal Rules of Civil Procedure. S. 3772 also requires the Equal Employment Opportunity Commission to collect pay data to better enforce laws prohibiting pay discrimination,” the statement reads.
One senior GOP leadership aide told HUMAN EVENTS that Democrats are expected to fall just short of the necessary 60 votes required to move the legislation forward.