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How Democrats plan to shrink the gender pay gap

The Paycheck Fairness Act is ambitious, and obvious.

Then-House Minority Leader Nancy Pelosi meets with supporters of the Paycheck Fairness Act in 2016.
Tom Williams/CQ Roll Call via Getty Images

You’ve probably heard this statistic by now: Women who work full time in the US earn, on average, 82 cents for every dollar a man earns — a number that has hardly budged since 2004. The gap has even widened a bit in the past four years.

Several factors explain this difference, but researchers believe a big part of it is due to discrimination. But that’s really hard to prove, for one simple reason: No one really knows what private employers are paying their workers.

Democrats in Congress have tried, and failed, to change this fact for more than two decades. And now they’re trying again. In January, Rep. Rosa DeLauro (D-CT) and her colleagues reintroduced the Paycheck Fairness Act — for the 11th time.

The bill would require employers to report, among other things, job salaries, promotions and dismissals to the federal government, broken down by gender and race.

The idea is that it will help women, and the government, identify potential pay discrimination and take legal action. However, businesses hate this idea, and have responded to previous efforts by saying this would burden employers. About two dozen business groups pushed the Trump administration to revoke an Obama-era rule from 2016 that would have required businesses to provide similar salary data.

“This expansion means huge additional costs for companies of all sizes, yet has no accompanying benefit, or protections for the confidentiality of the information to be gathered,” the groups wrote in a March 2017 letter to the White House, urging the president to revoke the new rule issued by the US Equal Employment Opportunity Commission, which enforces federal civil rights laws. Trump revoked the rule a few months later.

The Paycheck Fairness Act, which Democrats have just reintroduced, would reverse that decision, essentially reinstating the rule. It would also ban wage secrecy, increase penalties for employers who retaliate against workers who share salary information, and allow workers to sue for pay discrimination.

This time around, Democrats have momentum on their side. They have the House majority, and their bill has support from every single Democratic lawmaker — more than ever before. House Speaker Nancy Pelosi publicly championed the bill too, signaling that it is a high priority for the caucus.

It’s part of a larger agenda “to make women in the workplace have the opportunities that we all should have,” Pelosi said during a press conference on January 30.

The proposal will pass the House easily, but Democrats will need support from some Senate Republicans and President Trump in order to become law. If they can pull it off, there’s a good chance the pay gap will start shrinking again, which is good — since it’s currently costing women billions of dollars.

Progress toward women reaching equal pay with men has been slow

When Rep. DeLauro first introduced the Paycheck Fairness Act in 1997, women in the US earned about 74 cents for every dollar a man earned.

The pay gap has been shrinking since then, but very slowly. And it has flattened in the past 15 years or so, hovering around 79 cents to the dollar. In the past four years, it has started to widen a bit. (The disparity is even larger between women of color and white men.)

There are several reasons for the pay difference. Women are less likely to negotiate pay, and more likely to be penalized when they try. They are also more likely to choose career fields that pay lower salaries and are often pushed out of the highest-paying professions in the country, which reward workers who put in long hours — schedules that disproportionately hurt working mothers.

But after taking education, occupation, and work hours into account, researchers say that discrimination could explain about a third of the pay gap.

A 2013 study by the American Association of University Women found that women get paid 6.6 percent less than men in their first jobs, even after considering factors such as job location, occupation, college major, and number of hours worked.

The Paycheck Fairness Act would address the problem in two key ways. It would require employers to share pay data with the EEOC, which would allow the agency to identify potential discrimination, for example, if they notice that women at a certain company consistently earn less and get promoted less than men in similar positions. It would also prohibit employers from forcing workers to keep their salaries confidential, so women can ask their colleagues how much they earn without fear of retaliation.

The bill also includes a third provision that would go a long way in promoting equal pay: It bans employers from asking job candidates about their salary history.

The salary question hurts women and people of color

Asking applicants how much money they earned at previous jobs has long been a routine part of the hiring process. But this seemingly harmless question is a key culprit in perpetuating the persistent gender wage gap in the United States, according to a growing number of civil rights groups and legal experts.

It’s not hard to see the challenge in closing that gap when employers largely rely on a person’s past salary to calculate their new salary.

Businesses decide what to pay new hires based partly (or entirely) on how much they earned at their last jobs. Because women are generally paid less than their male co-workers, for reasons that include gender discrimination, asking female job candidates about their past salaries nearly guarantees that the wage disparity will continue throughout their careers. The same dynamic disadvantages workers of color.

“When you peg your offer and salary based on what someone made in their last employment, you then replicate whatever discrimination people have faced in prior jobs,” Victoria Budson, the executive director of the Women and Public Policy Program at Harvard University’s Kennedy School, told Slate.

This awareness has led equal rights advocates to push state and local lawmakers to address the problem with a straightforward idea: ban companies from asking the question altogether.

Massachusetts was the first state to outlaw the salary question outright in August 2016. Since then, California, Oregon, Delaware, and Puerto Rico have done the same. Maryland is considering a similar law. Several local governments, including Albany County, New York City, San Francisco, New Orleans, Philadelphia, and Pittsburgh have passed their own bans, though some of the local laws only ban the question for government jobs.

Businesses aren’t thrilled about this development, and they are starting to fight back, saying they collect salary information for market research too. In Michigan and Wisconsin, lawmakers recently passed laws prohibiting bans on the salary question.

In April, the Ninth Circuit Court of Appeals gave momentum to the equal pay movement in a major court ruling, saying that it’s a violation of the Equal Pay Act for businesses to consider a job candidate’s past wages when crafting a salary offer.

The Ninth Circuit’s decision doesn’t ban the salary question, but the ruling makes it a lot harder for employers in the region — which includes Silicon Valley — to persuade a federal judge to dismiss gender pay discrimination lawsuits.

The Paycheck Fairness Act would go even further, making it illegal for all large employers in the country to ask the question.

Hollywood and Silicon Valley shined a spotlight on the gender pay gap

The fact that women make less than men in similar jobs is nothing new. But recent stories out of Hollywood and Silicon Valley have called renewed attention to the issue.

Jennifer Lawrence and Amy Adams reportedly got only a 7 percent cut of profits from the 2013 movie American Hustle, compared to the 9 percent deal for their male co-stars. More recently, Michelle Williams was reportedly paid eight times less than her co-star Mark Wahlberg to reshoot the same number of scenes for 2017’s All the Money in the World.

Silicon Valley’s most celebrated companies are also facing scrutiny for reportedly paying women less, including Uber and Nike.

Four women who worked at Google are suing the company for violating equal pay laws, arguing that the company paid women less than men for the same work, assigned them to lower-paying jobs, and promoted them less often.

Google denies those allegations, but the Labor Department’s findings seem to support the women’s claims. Auditors for DOL said they found “systemic compensation disparities against women” across the entire company. The agency is investigating Google’s pay practices as part of a routine pay audit it performs on federal contractors.

The #MeToo era has also focused more attention on barriers women face in the workplace. While most of the movement has focused largely on allegations of widespread sexual harassment, women are increasingly speaking out against other forms of discrimination, such as pay discrimination, as well.

House Democrats have noticed all this — and some believe they may have a chance to finally pass the Paycheck Fairness Act this time around.