The Equal Pay Act: Is It Working?

“Equal pay for equal work. It’s common sense. It’s also overdue. Let’s close the gap and let’s do it now.”

-Vice President Joe Biden

Winston Smith

When President John F. Kennedy signed the Equal Pay Act of 1963 into law it was to set the stage for pay equality throughout America. Historically a pay gap has existed between men and women and the Equal Pay Act was created to try to rectify this problem. The assigned purpose of the act was to ensure that women would be able to receive equal pay for equal work, to rectify the wage disparity that has existed between men and women. While this was not the first piece of legislation to tackle workplace discrimination, this was the first to focus on equal pay for men and women. But, did this piece of legislation achieve its goal of shrinking the wage disparity between men and women?

The pay gap has been a factor in American economics since the 1800s. Between 1820 and 1850 the “ratio of female-to-male full-time earnings rose from about 0.3, its level in the agricultural economy, to about 0.5 in manufacturing.” Between the years 1890 and 1930, the ratio rose from .46 to .56. The Equal Pay Act of 1963 set to rectify this enormous disparity.

The Equal Pay Act of 1963 put in place policy that “prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort,and responsibility under similar working conditions.” This act also defined sex discrimination within 5 factors, with the five factors being;

  1. Depresses wages and living standards for employees necessary for their health and       efficiency;
  2. Prevents the maximum utilization of the available labor resources;
  3. Tends to cause labor disputes, thereby burdening, affecting, and obstructing commerce;
  4. Burdens commerce and the free flow of goods in commerce; and
  5. Constitutes an unfair method of competition.


This definition of sex discrimination was to help enforce the act. By breaking a specific factor this definition, the violator would be punished under the sanctions listed within the act.

This act has created substantial benefits for women within the workforce. Since the act had been implemented, the pay gap has been closing. In 1979, the first year with comparable pay data was available for men and women, the Bureau of Labor Statistics has found that “women earned 62 percent of what men earned.” However, what does the data look like today?

Unfortunately, the wage gap persists in the United States. After 2004, the pay gap has shortened to the 80 to 81 percent range. While this pay gap is smaller than it was in the past, the Bureau of Labor Statistics shows that a woman in 2016 would earn only $749 in median weekly earnings as compared to a man’s $915 weekly median earnings. This means that women earned 81.86% of what men earned weekly. Along with this, women dominated fields such as “receptionists and information clerks” and “teacher assistants” overall make less money than male dominated fields. Most troublesome is that women also earn less in their top 20 most common occupations than men in those same occupations. For example, within the financial services industry, while women account for more than half of all employees, women only earn $0.69 for every $1 men make.

Women also face a very prominent glass ceiling when it comes to advancement in work, which is an effect of the pay gap and the mindset behind paying women less. Currently, only 4.2% of Fortune 500 CEOs are women. This occupational segregation also not only hurts women but also hurts the rest of the population as well. There are two reasons for this; “it is inefficient economically, preventing able people from moving into occupations where they could perform well and that would satisfy them more than the ones open to them. And occupational segregation is a major cause for the persistent wage gap.” Both of these factors affect the economy in negative ways that reduce the potential output of the female labor force and does not utilize their skills effectively. The first reason shows that the occupational segregation does not let women who have degrees for high-paying jobs work in them because they tend to be male dominated. This can lead women to work in occupations that they are overqualified for which. The second reason that this hurts the total population is that resulting from the wage gap, there is less money for women to use. This means less investment by women and less purchasing power held by women because of their lack of disposable income by having lower paying jobs.

The above data shows that the Equal Pay Act of 1963 still has left much to be desired but,  remember, the pay gap has been present in the American economic system for hundreds of years. While there has been progress to try and close the wage gap, it persists, but at a substantially lower rate. We all know of many women who have been underpaid and held back due to societal influences. Truly an equal society would not have such a pay disparity between men and women. So while an 18.14% disparity is a hell of a lot better than 44%, it’s clear that there’s still much work to be done.  

 

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3 thoughts on “The Equal Pay Act: Is It Working?

  1. Good article, but I had few comments. According to Pew Research Center: In 2012, 20% of all women in the US were stay-at-home moms. Doesn’t that skew the average wage towards the lower end of the spectrum? After all, the data you cited didn’t say that they were only working women that they researched.
    Looking forward to hearing your response!

    Liked by 1 person

    1. An astute observation to be sure. That was my first objection too, but the Bureau of Labor Statistics data we used (https://www.bls.gov/opub/reports/womens-earnings/2015/home.htm) didn’t include stay-at-home moms, it only included full-time wage and salary earners, meaning that the stay-at-home moms weren’t dragging the average down.

      I think the overall point of the article stands that there is some degree of occupational segregation being chosen, whether individually chosen or socially-enforced, where women populate lower paying fields. In short, men or more likely to be doctors and women more likely to be nurses.

      -John

      Liked by 1 person

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