Essay/Term paper: Pay equity vs. pay equality

Essay, term paper, research paper:  Marketing

Michael D Beach

Title: Pay Equity vs. Pay Equality

Abstract: Pay Equality means equal pay for equal work, but pay equity programs throughout the world attempt to legislate and regulate the elimination of systemic gender-based wage discrimination and to ensure ongoing systems that will maintain equitable wage relationships over time.



Six Pages

APA Citations, Seven Sources



Pay Equity vs. Pay Equality



In 1963, President Kennedy signed the Equal Pay Act into law, making it unlawful to discriminate against a worker on the basis of sex. Since that time, the wage gap between men and women in the United States has narrowed by just 15 cents, now being 74 cents, as reported by the U.S. Census Bureau.

Pay equality is most prevalent for the 16 to 24 age group, in which women earn more than 90 percent of what men do; however, the gap becomes 75 percent in the 25 to 54 year old group – those at the height of their careers and life responsibilities. Brady 1998).

A number of factors have contributed to the gap between men"s and women"s wages. These include: occupational segregation of women into low paying jobs; lower levels of unionization for women and attitudinal barriers that have kept women from achieving equality in the workplace and undervaluation for women"s work.

The Equal Pay Act (part of the Fair Labor Standards Act), forbids employers to compensate women differently for jobs that are "substantially equal", that is, almost identical. Traditionally, women have worked in different occupations than men; these occupations tend to be substantially different, pay less and confer less authority. (Ferber 1999).

Equity means fairness and justice. Pay equity programs throughout the world attempt to legislate and regulate the elimination of systemic gender-based wage discrimination and to ensure ongoing systems that will maintain equitable wage relationships over time.

Pay equity programs attempt to address the undervaluation for work traditionally or historically done by women. Pay equity (also referred to as "comparable worth") programs require a gender-neutral analysis of comparative work. A variety of very different jobs are compared based on a composite of the skill, effort and responsibility of a job and the conditions under which the job is generally done. The comparison determines the relative worth of those jobs to the achievement of a firm"s objectives, under the proposition that equal contribution merits equal compensation. (Pincus and Shaw 1998) Where female-dominated jobs in the workplace are found to be of equal or comparable value to male-dominated jobs but paid below the level of the male jobs or payline, then all employees in those female-dominated jobs are entitled to receive pay equity adjustments.

But how are these adjustments to be determined in a workplace that already subjectively undervalues the effort and contribution of women and minorities? Over the past decade, under-recognition of jobs and skills attributed to women, their lower human capital attributes and a historical concentration in a culturally-confined range of jobs combined with direct discrimination has produced continuing inequities in pay. It is doubted by those concerned with this issue throughout the world that anti-discrimination and equal opportunity laws relying on the successful legal action of individuals seeking redress cannot address systemic problems due to the undervaluation of feminized work. (Pocock 1999.)

Equality means equivalent, or equal in value, measure force, significance, etc. The idea of "equal pay for equal work" refers to men and women in the same job, under the same circumstances, ability, seniority, performing equally well but being paid differently.

Opponents of pay equity base their criticism on economic theory; stating that the labor market establishes an employee"s worth. But Pincus and Shaw argue that this economic argument disregards the historical and cultural bases for the differential. Many studies show that predominately female jobs pay less, on average, than predominantly male jobs.

Debates over "comparable worth" policies come from the findings that the sex composition of an occupation exerts a net effect on the wages earned, even after all other factors which may influence the outcome are withdrawn. Studies done in North Carolina showed that the higher percentage of female workers in an occupation had a negative impact on total pay. (England 1999).

Thomas R. Tudor points out in "The Complex Issues of Pay Equity" (Journal of Compensation and Benefits, Jan-Feb 1997 v12 n4 p.34) that what employers perceive as fair pay or even what is legislated may not be perceived as such by current employees. Many employers attempt to achieve internal pay policies by standardizing pay ranges for a given position. Influencing factors may include firm size, profitability, growth and market share; however, most companies want to set compensation at whatever level they feel necessary to obtain the highest efforts and results from their employees. Some of these factors can be subjective and lead, not only to defacto discrimination, but employee dissatisfaction in general, as they compare job responsibilities and relative productivity between the people on site.

Currently, in all methods of job evaluation, it is the requirements of the job itself that are evaluated, not individual performance, and equity is not the goal.

Advocates of pay equity want to legislate that gender composition of jobs not affect the resultant pay. Systems could be set up to establish rating scales on the basis of job evaluations where it is the requirements of the job and not the performance of a given individual within the job that are determinant factors in compensation. This could include educational factors, how much time is spent on different tasks and the sphere of responsibility incumbent upon the employee. Current plans most commonly use skill, effort responsibility and working conditions as factors.

Critics of pay equity argue it could never achieve its goal, and even if it did, it would have the undesirable side effects of the disemployment of women and hurt the economy of the enforcing government. The fact is that pay disparity for men and women has a serious effect on the economy, diminishing each woman"s purchasing power in a society in which most marketing is done toward women, and also has adverse effects on families with single mothers or other female head of household situations.

Critics also point out that women or minorities come to the market with productivity shortfalls. Conclusions of research done by Neumark in 1999 are that minority workers are paid lower starting wages which are thought to reflect discriminations based on taste and lower expectations.

Will the wage gap ever be solved for good? It is expected that with all the momentum from legislative efforts, individual lawsuits, and well-intentioned proponents, hopes are high that the pay gap will be long gone by mid-century.

Bibliography



Krotz, Joanna L. "Getting Even" Working Woman Magazine Online. http://www.workingwomanmag.com/salary/getting.html



Brady, Teresa. "How Equal is Equal Pay?" Management Review March 1998. V87 n3 p.59(3)



England, Paula. "The Case for Comparable Worth". Quarterly Review of Economics and Finance, December 31, 1999 v39 special issue p.743 (13)



Ferber, Marianne A. "Introduction (Women at the End of the Millenium: What We Know, What We Need to Know)". Quarterly Review of Economics and Finance December 31, 1999 v39 Special issue p. 579(17).



Neumark, David "Wage Differentials by Race and Sex: The Roles of Taste Discrimination and Labor Market Information". Industrial Relations, July 1999 v38 i3 p414



Pincus, Laura and Bill Shaw "Comparable Worth: An Economic and Ethical Analysis". Journal of Business Ethics 17: 455-470, 1998



Pocock, Barbara. "Introduction: What Action Now for Pay Equity?" Labor & Industry, December 1999 v10 i2 p1