Diana Furchtgott-Roth: 'Paycheck Fairness' is anything but

Even though he should know better, President Obama continues to give currency to the 77-cent wage gap myth. On Tuesday, he endorsed the Paycheck Fairness Act, a bill designed to raise women's wages that would vastly expand the role of the government in employers' compensation decisions.

The president declared, “Yet, even in 2010, women make only 77 cents for every dollar that men earn. … So today, I thank the House for its work on this issue and encourage the Senate to pass the Paycheck Fairness Act, a common-sense bill that will help ensure that men and women who do equal work receive the equal pay that they and their families deserve.”

The Paycheck Fairness Act was one of the first bills that the House of Representatives passed in January 2009. It is awaiting action in the Senate. The bill is misnamed because there is far less pay discrimination against women than is alleged by professional feminists.

No matter that women's unemployment rates are two percentage points lower than men's, that government figures show that comparing wages of full-time men and women yields a wage ratio of 80 percent, not 77 percent, and that the ratio is 86 percent for men and women who work 40 hours weekly. This before accounting for different jobs, education and time in the work force, which brings wage ratios closer to 95 percent.

A woman who chooses a job with a flexible schedule, perhaps part-time, in order to have time both for her family and her career thinks of herself as successful. But to President Obama, she is a social problem in search of a government solution because she might earn less than a man.

The bill requires the government to collect data from employers on the sex, race and national origin of employees, adding to red tape, paperwork and hiring costs.

It would only allow employers to defend differences in pay between men and women on the grounds of education, training and experience if these factors are justified on the grounds of “business necessity.” So male supermarket managers with college degrees couldn't be paid more than female cashiers if the college degree for the manager wasn't consistent with “business necessity.”

Another provision would expand the establishments subject to anti-discrimination laws from one to all establishments of the same employer in a county.

Now, employees who do substantially the same work in one location have to be paid equally. Including all locations would mean that wages of cashiers in high-cost or unpleasant areas would have to equal those in low-cost, more pleasant areas.

The bill's opt-out clause would facilitate class-action suits. Whereas workers now have to agree to take part in class-action suits to be included, under the bill they are automatically included unless they opt out.

The bill would increase penalties that courts could levy on employers. Now, if an employer is found guilty of discrimination, she owes her workers back pay. Under the Paycheck Fairness Act, she would have to pay back pay as well as punitive damages.

With numerous anti-discrimination laws, such as Title VII of the Civil Rights Act, the Equal Pay Act, and the 2009 Lily Ledbetter Fair Pay Act, women do not need more remedies for discrimination. Courts have sufficient tools, and use them. The pending bill would only burden employers with more regulations and paperwork, further discouraging hiring — of men and women.

If enacted, the Paycheck Fairness Act would reduce employment by trapping employers in endless litigation. The bill is a full-employment act for lawyers — and would do nothing to help women, its supposed beneficiaries.

Examiner Columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.

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