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Hillary Clinton's plan could narrow the gender pay gap but won't come close to closing it

Equal pay is a very difficult problem to solve.

Hillary Clinton is offering up equal pay advocates' favorite solutions.
Hillary Clinton is offering up equal pay advocates' favorite solutions.
Andrew Theodorakis/Getty Images

Hillary Clinton's big applause line on the stump is retro, but it resonates: "Equal pay for equal work."

The gender pay gap is a central piece of Clinton's policy agenda. She's laid out specifics for taking it on, like raising the minimum wage and passing a paycheck fairness law and paid family leave.

Together, these ideas could certainly help chip away at the problem, experts say. They would give women more recourse when they discover pay discrimination, lift many women-led families out of poverty, and ease pressure on working mothers after giving birth.

But the gender pay gap isn't just about changing laws. Some of the pay disparity is because of discrimination, cultural norms, institutional sexism, and workplace structures. So while Clinton's efforts around legal changes are significant, they also bump up against the problem of changing hearts and minds — an idea Clinton has explained she rejects as a political path earlier this election cycle.

The Paycheck Fairness Act

Clinton's biggest legislative plan to get wages on equal footing is a bill called the Paycheck Fairness Act, which would require companies to demonstrate why they pay men and women differently.

Championed by Sen. Barbara Mikulski (D-MD), the bill increases penalties for pay disparities and allows the Department of Labor to collect data on employees wages by race, sex, and national origin.

The upside to the bill is it will put the burden on employers to prove the pay disparity is based on a factor "other than sex," use similar jobs at different locations within the company as proof of disparity, and allow successful lawsuits to include punitive damages. As the National Women's Law Center puts it, this bill would "put gender-based wage discrimination on an equal footing with discrimination based on race or ethnicity, for which full compensatory and punitive damages are already available."

The bill's critics tend to say that we don't need to pass new legislation on equal pay because we already have legislation on the books to accomplish these ends. It's true. There is the Equal Pay Act of 1963, which established the basic idea of equal pay for equal work. And there's the Lilly Ledbetter Paycheck Fairness Act, designed to address what many felt was an egregiously literal interpretation by the Supreme Court of a window by which pay discrimination lawsuits may be filed. It was the first bill President Obama signed in office.

President Obama Delivers Remarks In The East Room Of White House Photo by Mark Wilson/Getty Images

The Ledbetter bill was celebrated by many who work on equal pay. Still, advocates want to go further by allowing women who discover they're the victims of pay discrimination to sue more effectively for damages. That gave way to the Paycheck Fairness Act.

There are also some innovative private approaches, with some companies simply making everyone's salary transparent and others advocating for banning salary negotiations altogether. But private companies have an incredible amount of leeway in how they decide to compensate their employees, and there's little the government can do aside from banning blatant discrimination.

The Paycheck Fairness Act may help keep employees a little more honest and give women who discover pay discrimination more legal leverage. The long-term goal would be to discourage employers from allowing pay gaps to crop up in the first place.

Raise the minimum wage to give a boost to low-income women

One idea for achieving equal pay isn't specific to women at all, but advocates believe it would go a long way for women: raising the minimum wage.

This concept has become one of the most popular Democratic policies proposed in recent years, and the minimum wage saw its last federal hike in 2007. Raising the minimum wage has also become a policy adopted by equal pay groups because women — and women of color particularly — are disproportionately the ones making minimum wage.

NWLC compiled a state-by-state breakdown of what percentage of minimum wage earners are women.

National Women's Law Center

A boost to the minimum wage would likely literally put more money in the pockets of women at the lower end of the income scale.

Clinton's rival in the Democratic primary, Bernie Sanders, has also made the case on the campaign trail that raising the minimum wage is a feminist issue. He lists raising the minimum wage on his campaign website under its "fighting for women's rights" section. (He similarly urges passage of the Paycheck Fairness Act.)

But while Clinton and Sanders agree that an increased minimum wage might help low-income women, where they disagree is by how much they should get a pay raise. Clinton has endorsed a $12 minimum wage, while Sanders pushes a $15 minimum wage, like the one recently passed in California.

Some left-leaning economists are skeptical about a minimum wage as high as $15 an hour. And it's less clear if an increased minimum wage would do much, if anything, to equalize pay between men and women. Fundamentally, boosts to the minimum wage seem more about lifting families out of poverty. After all, more than half of children living in poverty are in families headed by women.

Enacting paid parental leave

Along with the minimum wage, paid family leave has increasingly become an important piece of increasing the social safety net for Democrats. It's a policy so popular that San Francisco passed a law ensuring fully paid family leave just last week (and California and New Jersey already have insurance-style programs in place).

Though paid leave is certainly popular enough to become something of an arms race among high-end tech jobs, It's not very widely available to families further down the income ladder. Only 12 percent of private sector workers have paid family leave, and the federal government only offers what's mandated under the Family Medical Leave Act — six weeks of unpaid leave and nothing to workers who have been with the federal government for less than a year.

On policy, Clinton has endorsed many tenants of the FAMILY Act, which would set up an insurance-style 12-week paid leave system to which both employers and employees would contribute, but she disagrees over its funding mechanism. Because she has also insisted that she will not raise taxes on the middle class, her proposal taxes only the wealthiest Americans.

This has put Clinton under fire during debates with Sanders, who points out that a payroll-style family leave policy would be worthwhile even though it raises taxes on the middle class.

But one thing that's interesting is evidence from other countries that offering generous paid family leave policies doesn't lead to the closing of the gender pay gap. Research from Pew and Uta Schönberg at the University of Rochester indicated that more family leave doesn't seem to necessarily correlate with smaller gender pay gaps. Even in European countries, which tend to offer much more generous family leave policies, women fall behind in pay compared with their male peers.

Euronews

"We know from the research that there’s a very strong bias against mothers in the workforce," said Victoria Budson, the founder and executive director of the Women and Public Policy Program (WAPPP) at the Harvard Kennedy School of Government. She went on to point out that years of new motherhood are a very small percentage of women's overall working life, and they seem to have a disproportionate effect on women's pay.

Further discussion has indicated that this lack of effect might actually be because men are less likely to actually take their parental leave, and some have pitched mandating men take paid family leave as well, trying to equalize the time off. But even parental leave has a double standard: Men who take paternity leave are often praised more for taking leave, while women taking maternity leave is merely tolerated. Some research also indicates that companies that offer generous parental leave policies also tend to promote women into executive positions more slowly.

However, paid maternity leave seems to be better for children, both physically and emotionally, and makes women who take it feel more loyal to their current employers. Employers in the tech sector have begun offering it as means of attracting talent. One study of European policies even indicated that parental leave could have long-term effects like the reducing of rates of depression late in life.

"There’s a lot of reasons you might invest in paid family leave based on the economics alone," Budson said.

In other words, there are lots of reasons to provide parental leave, but it may not necessarily directly eliminate the gender gap.

What other research points to as barriers to equal pay

But ultimately, the problem of mandating equal pay is tougher than simply strengthening pay discrimination laws, raising the minimum wage, and investing in paid family leave. Even with all these policies in place, it's doubtful the US would suddenly see the gender pay gap eliminated.

This is partially because of the way jobs themselves are structured, particularly for highly educated workers, where gender pay differentials can vary wildly from profession to profession.

"The real fixes will be structural; they won’t be individual," Budson said.

Her colleague Claudia Goldin has found there is a very strong link between jobs where pay rewards are dependent on long hours and "face time" with clients or causal interactions with colleagues and gender pay disparities.

Goldin, a Harvard University economist whose research is some of the foremost on the gender pay gap, argues in her 2014 paper that the fuzzy definition of working hours comes at a high cost to women in the workforce:

If an employee is unavailable and communicating the information to another employee is costly, the value of the individual to the firm will decline. Equivalently, employees often gain from interacting with each other in meetings or through random exchanges. If an employee is not around that individual will be excluded from the information conveyed during these interactions and has lower value unless the information can be fully transferred in a low cost manner.

By analyzing the gender pay gaps in three different types of college-educated jobs — business or MBA holders, lawyers or JD holders, and pharmacists — she discovered some jobs put more value on being "on call" or putting in "face time" with clients. These kinds of jobs tended to be much more punishing to women in terms of the gender pay gap.

Golden notes that this lack of flexibility for "face time" comes at a price:

Often those are winner-take-all positions, such as partner in a firm tenured professor at a university, or top manager. These are also positions for which considerable work hours leads to a higher chance of obtaining the reward, and it is often the case that hours alone get rewarded

In other words, the costs of not participating in this kind of work are steep. (The profession with the least differential in apples-to-apples gender pay is pharmacists, for reasons Goldin outlined in a Q&A with Vox's Danielle Kurtzleben in 2014.)

Children, of course, account for a big difference in the gender pay gap. As Goldin writes in a 2011 paper for the The ANNALS of the American Academy of Political and Social Science, in which she looked at the data of women with MBAs:

Women with children have labor force rates that are 20 percentage points lower than are men’s or women’s without children. They work 24 percent fewer hours than men or women without children.

She also notes that the economic situation of spouses of women with MBAs makes a pretty big difference. Women with spouses who are high earners (more than $200,000 in 2006 dollars) have labor force participation rates that are 18.5 percentage points lower than women with spouses who are low earners. They also work 19 percent fewer hours than their peers with similar or lower earnings.

Goldin said in an interview with Vox that she thinks paid family leave can help — particularly encouraging men to care for children, but without dramatically remaking how jobs work, there will always be families who know they are giving up money in exchange for that family time. And she remains skeptical that the government is the appropriate mechanism.

The point of all of this is simply that there are deeply entrenched problems in gender pay differentials that can't be solved by even the most ambitious of policy proposals currently on the table. The very way we structure our work can have a huge effect on whether women can compete with men for the same pay in the same jobs.

"To the extent that there isn’t equal pay for equal work, however you want to measure that … then of course there are ways to address that with policy," Goldin said in an interview with Vox. "My point is that this isn’t the problem."

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