Category Archives: fair pay

The wage gap is still enormous

You’re probably wondering.  Wage gap?  Huh?

This isn’t a sexy topic, but it’s troubling, and it’s not the first time I’ve written about it.  There are certainly more compelling topics to discuss right now (e.g., gun safety, the persistence of Covid), but I want to focus on this today.

 Five years ago, in July 2017, I noted my concern with the CEO-worker wage gap [https://susanjustwrites.com/2017/07/31/random-thoughts-ii/].

What was bothering me?  The CEO “pay ratio” was standing at 271-to-1.

I was looking at the Economic Policy Institute’s annual report on executive compensation released on July 20, 2017.  According to that report, chief executives of America’s 350 largest companies made an average of $15.6 million in 2016, or 271 times more than what the typical worker made last year.

Yes, the number was slightly lower than it was in 2015, when the average pay was $16.3 million, and the ratio was 286-to-1.   And it was even lower than the highest ratio calculated, 376-to-1 in 2000.

But, as I pointed out, before we popped any champagne corks because of the slightly lower number, we had to remember that in 1989, after eight years of Ronald Reagan in the White House, the ratio was 59-to-1, and in 1965, in the midst of the Vietnam War and civil rights turmoil, it was 20-to-1.

In 2017, I wanted us to reflect on those numbers.  To think about how distorted these ratios were and what they said about our country.  I asked, “Did somebody say ‘income inequality’?”

Why am I writing about this issue again?  Because this week Andrew Ross Sorkin reported in The New York Times that the average pay gap between low-wage workers and the CEOs of their companies is still enormous.

Sorkin reported that, according to a brand-new study by the Institute for Policy Studies, the median pay for workers at companies that tend to pay low wages was, thanks to inflation,  up by 17 percent,.  But that raise was dwarfed by the rise in CEO pay, which rose by 30 percent at those same companies.  The lead author of the study “Executive Excess” noted, “this could have been a time when companies used rising profits to level the playing field.  Instead,” said Sarah Anderson, “we haven’t seen a very big shift in pay equity.”

Further, CEOs did even better at companies where salaries didn’t keep pace with inflation. The study looked at median workers’ wages at about a third of the firms in the study, firms whose wages did not keep pace with inflation.  The average CEO pay at those companies was up by 65 percent, or more than double the increase at all of the firms in the study.

One company in this group was Best Buy, where median pay fell two percent last year (to $29,999), while the CEO, Corie Barry, got a 30 percent pay increase to $15.6 million.  Barry may have done a bang-up job, but the huge difference in pay is pretty stark.

Hey, Best Buy, I just bought some stuff from you.  If I’d known that my purchases have led to this vast inequity in pay, I’d have thought twice about giving my business to you.  I don’t like to think that such a big chunk of your profits, including those derived from customers like me, went straight to your CEO instead of to your workers.

Is there any possibility for change?  There may be a glimmer of hope.  Sorkin’s report also noted that the SEC (Securities and Exchange Commission) could possibly move in that direction.  According to Sorkin, a group of former regulators (including two former SEC commissioners) have asked the SEC to issue new rules illuminating this disparity. 

The petition for this rule-change contends that “investors need more information about what companies pay workers,” and it urges the SEC to propose new rules requiring companies to disclose how much they’re investing in their workforces.

The two former SEC commissioners (Joseph Grundfest and Robert Jackson) have, in the past, often had opposing views.  They noted, “We differ in our views about the regulation of firms’ relationships with their employees generally.”  But, they added, “we all share the view that investors need additional information.”  The group stated that the current accounting and tax rules make “investing in machines more attractive than spending on humans.

Right now only about 15 percent of public companies disclose their labor costs. The proposed rules would require that companies disclose their labor costs (and no longer lump them in with other expenses).  They’d also require companies to provide detailed workforce compensation data, including information on the breakdown for contract, part-time, and full-time employees.

So we may be able to clearly see the current disparity in compensation.  If these new rules are endorsed by the SEC, we could see much more transparency in workers’ compensation because data revealing who earns how much would be revealed for everyone, including investors, to see.  

At least some investors could then make choices that would benefit workers’ compensation.

The goal is achieving greater equity.  I think that many if not most investors would welcome a move in that direction.  As Virginia’s Senator Mark Warner, who supports the petition, says, “No one can credibly argue that this type of disclosure wouldn’t be valuable or material to investors in a highly competitive, 21st-century, global economy.”

The Battle of the Sexes: One more take on it

When Billie Jean King met Bobby Riggs on a tennis court at the Houston Astrodome on September 20, 1973, I was miles away in San Diego.  I’d just finished teaching a class of law school students about Poverty Law, and I was blissfully pregnant with my first child.

I was watching the clock, assessing the time it would take me to drive from the law school on the beautiful campus of the University of San Diego to our recently-rented apartment in seaside La Jolla.  Waiting at home for me was my handsome and super-smart husband Herb, finished for the day with teaching math students at UCSD, the University of California at San Diego.

We were both Professors Alexander that year, and I took delight in answering our phone and hearing a student ask to speak to “Professor Alexander.”  My somewhat amused response:  “Which one?”

Herb had snacks and drinks ready for the two of us to munch on and imbibe during the televised tennis match.  The drinks included nothing alcoholic for me.  Not because the medical profession had pronounced that alcohol was detrimental for growing fetuses.  As I recall, that came later.  I avoided alcoholic drinks simply because I had no desire to drink them during my pregnancy.

Was it instinct or just dumb luck?  When we later that year saw the film “Cinderella Liberty,” in which an often-drunk woman’s pregnancy ends in tragedy, my choice to avoid alcohol was clearly vindicated.

I drove home from USD with as much speed as I could safely muster, arriving in time to watch the much-hyped tennis match dubbed the “Battle of the Sexes.”  In the 2017 film that tells the story of the match, Emma Stone captures the Billie Jean King role perfectly.  She portrays with aplomb not only King’s triumph over Riggs in that tennis match but also her initial uncertainty over her decision to compete against him and her continuing struggle to ensure that women’s tennis be given equal status with men’s.

As one of the estimated 50 million viewers who watched King on ABC television that night, I can’t imagine any other Hollywood star assuming the role with greater success.  Emma Stone embodies Billie Jean King to perfection, and I hope her performance garners the attention of countless moviegoers, including many too young to remember  the match that took place in 1973.

Steve Carell carries off his role as Bobby Riggs in the film equally well, depicting the outrageous antics of the 55-year-old Riggs, who initiated the concept of the “Battle of the Sexes.”  But the focus here has to be on Billie Jean, the Wonder-Woman-like heroine of her day.  By accepting Riggs’s challenge, and then defeating him, she became the mid-twentieth-century symbol of women’s strength and perseverance, advancing the cause of women in sports (and in American culture at large) as much as she advanced her own.  Watching the battle on TV with my adored husband, my hoped-for child growing inside me, I was ecstatic when Billie Jean defeated Riggs before 90 million viewers worldwide.

As my pregnancy advanced, I was frequently asked by complete strangers, “Do you want a boy or a girl?”  I took pleasure in answering “a girl” just to see the reaction on the faces of the nosey parkers who clearly expected another response.

I was in fact hoping I would give birth to a healthy child of either sex, but I knew that I would treasure having a daughter.  When my beautiful daughter was born about seven months after the Battle of the Sexes, and when her equally beautiful sister arrived three years later, Herb and I were both on top of the world.

Maybe watching Billie Jean King in September of 1973 sealed our fate.  We really wanted her to win that battle.

Did the endorphins circulating inside me as we watched Billie Jean triumph produce a feeling of euphoria?  Euphoria that later led us to produce two Wonder-Woman-like heroines of our own?

Maybe.

Tennis, anyone?

 

Let’s Lobby Congress to Pass the Paycheck Fairness Act

When U.S. Senator Barbara Mikulski recently announced her decision not to run for a sixth term, she noted that one of the issues she cares about “most deeply” is the issue of fair pay.

Mikulski, who was elected to the U.S. Senate in 1986 as the only Democratic woman and one of only two women in the Senate (the other was Kansas’s Nancy Kassebaum), has a long record of promoting issues that loom large in the lives of American women and families.

Mikulski noted that every year, on average, women who work full-time lose more than $10,800 in income because of the wage gap between what women and men earn. She plans to spend every day of the two years remaining in her term fighting for critical legislation like the Paycheck Fairness Act.

I’m joining Senator Mikulski in her campaign to enact the Paycheck Fairness Act (the PFA). I first wrote about this issue in an op-ed in the San Francisco Chronicle on April 23, 2010, “Unequal pay harms U.S. women.” (It appeared on this blog in October 2012.)

In the five years since my SF Chronicle op-ed appeared, nothing has happened. When the House of Representatives still had a Democratic majority, the House passed the PFA. But because it never passed in the Senate, it never became law.

Now, post-2014, when the Republicans hold a majority in both the Senate and the House, passage of the PFA seems impossible. But let’s not throw in the towel just yet. Because it’s such a vital issue, affecting millions of American workers and their families, I, like Senator Mikulski, am once again climbing on my soapbox and doing what I can to promote its passage.

I’ll begin by asking this question: How many working women think they’re paid fairly for the work they do? Right now, with the economy improving but still struggling to provide good-paying jobs for all of those who want them, some women may be happy just to be employed.

But women are still paid only 78 cents for every dollar men receive, making unequal pay a continuing problem for American women and the families who depend on their wages.

Did you know that women are now the primary breadwinners in 40 percent of American households? This fact makes closing the wage gap a crucial issue for all of these families, not merely for working women alone.

Why is the PFA so important? Because it would level the playing field for working women.

It would amend the Equal Pay Act (the EPA), which was enacted over 50 years ago in 1963 but hasn’t gone far enough to do what it was supposed to.

The EPA made it illegal for employers to pay unequal wages to those who perform substantially equal work. That sounds great, doesn’t it? So why hasn’t it made a real difference? Because of a startling failure in enforcement.

Enforcement by the EEOC during the past five decades has narrowed the wage gap to some degree. But the gap still exists because the EPA’s enforcement tools are outdated, making the gender-disparity in pay almost impossible to eradicate.

While other federal civil rights statutes have been amended numerous times, the EPA has never been amended. That’s why passing the PFA can make a real difference.

Let’s understand something right off the bat: The PFA doesn’t give employers a lot to complain about. It wouldn’t create an onerous burden because it wouldn’t give their employees any new rights. Employers are already required to comply with the EPA. The only difference is that under the PFA, women would be better able to ENFORCE those rights.

Many of the bill’s provisions make no demands on employers whatsoever. One provision would merely create a grant program that would help women and girls develop better skills at salary negotiation. Another would improve the way the government collects information from federal contractors.

Other provisions focus on the role of the Equal Employment Opportunity Commission. For example, it would give EEOC staff additional training to do a better job identifying and handling wage disputes.

Of course, some provisions do directly affect employers. Most significantly, the PFA would give women the same remedies as those available to employees discriminated against on the basis of race or national origin. Currently women can get only limited awards like back pay. The PFA would allow women to get compensatory and punitive damages for pay discrimination. These are the kinds of damages those suffering from racial and national-origin bias already get.

The PFA would also prohibit employers from retaliating against women who share salary information with their coworkers. This kind of information-sharing helps employees get vital information about wage disparities and discrimination at their workplace. But right now employers can retaliate against women who share such information. Women can be fired or suffer other repercussions for sharing the kind of salary info they need if they’re going to discover how much less they’re earning. This has to change.

Under the PFA, an EPA lawsuit could also proceed as a class action under the rules that apply to other federal lawsuits, instead of the restrictive 1963 rules that have never been amended.

Finally, a significant loophole now keeps women from winning cases brought under the EPA. Employers who are paying women less than men for equal work can claim that the difference in pay is based on a “factor other than sex.” This language is far too broad. It allows employers to make claims that have little or no merit. For example, this language has been used to argue that male workers have stronger negotiation skills and for that reason can negotiate higher salaries. Does that sound right to you? Should arguments like that allow men to earn more than a woman doing the same work? I don’t think so.

That result is NOT what Congress intended when it passed the EPA. The PFA would alter this language and allow different pay for men and women only when an employer can show that the difference relates to job performance and business necessity.

It’s time to shake things up and put women on a level playing field with their male co-workers. Women and men need to speak out and demand passage of the PFA. If we don’t speak out, we have to ask ourselves: When will Congress make pay equity a reality for America’s working women? And what did I do to try to make it happen?