Equal Pay Day!
Today is the national observance of Equal Pay Day. With the spring snows melting, New Year’s Day seems a long time ago. But because, on average, full-time working women in the United States earn 77 cents for every dollar a male earns, a working woman must work until mid April before her earnings equal what an equivalent working man earned last year.
Here in Montana it is even worse. The median income for a woman is only 71.5 percent of a man’s, pushing the catch-up date into mid-May. Montana women and their families are being shortchanged thousands of dollars a year ($11,369 at the median) and hundreds of thousands of dollars over a lifetime.
Though most young women may not expect to face sex discrimination in their careers, the wage gap is very real and stubbornly persistent. There is a one-two punch that shows up in the numbers.
First, in occupations where women tend to work, wages are lower. There is still a tendency to explain this by comparing apples to oranges – women are dental hygenists while men become surgeons. However, comparing traditionally male and female occupations with equal levels of skill, effort, and responsibility, one finds that “women’s work” like education and health care is still undervalued compared to male-dominated areas like computer programmers. In fact, when researchers asked people to assign a pay level to the same exact job, the answers were significantly different depending on whether the job was being performed within a traditionally male or female occupational setting.
Perhaps more startling is the fact that women earn less than men within almost every single occupation – they are paid less for the same job. Yes, women are more likely to reduce their hours to care for children and elders, for maternity leave, and to carry other responsibilities for their families. No, that does not explain the gap. The gap is not explained by factors such as work experience, tenure on the job, flexible work arrangements, education levels or even grades in school. The gap is not even explained when you factor in the occupation in which one works. Montana women earn less than men regardless of whether they are businesswomen, accountants, managers, retail workers, doctors, health technicians, lawyers, saleswomen, or engineers. Women even earn less than men in female-dominated occupations! Controlling for all of these factors still leaves a wage gap of 81 to 88 cents to the man’s dollar. Women simply are paid less.
Paying workers equitably for the work they do is the right thing to do. Fairness and justice do matter in our society. But if that isn’t convincing, then one should consider that the persistence of the wage gap has an important negative impact on our economy. It is not just a matter of fairness; it is also a matter of economic success for businesses and economic security for families.
Women are now half the workforce. Without their labor, our economy would grind to a halt. Businesses of all sizes have found that they can attract and retain the best talent by paying men and women equally. Such meritocracy is fundamental to our free market system, to innovation, and to a strong economy.
Women are also increasingly the breadwinners for Montana families. Sixty-seven percent of Montana families depend on a woman for all or part of their income. In 40 percent of families today, a woman is the primary breadwinner. When the median wage for full time work paid to a woman is $11,369 less than that paid to a man, the impact on the family budget is significant. That lost income in one year would cover 18 months of average rent or cover a mortgage and utilities for 9 months. It is almost a year and half’s food bills for an average family of three. In just two years it could add up to a down payment to buy a home – a key factor in economic security and achieving a higher standard of living. If that money were invested each year throughout a 40 year career, at a conservative rate of 5 percent, it would produce retirement savings of almost $1.5 million – the nest egg that most Montana families lack.
Legislation at both the state and federal level could promote progress in this area. The federal Paycheck Fairness Act, which was passed by the House of Representatives in 2008, had majority support in the Senate and was supported by most Americans who were polled. Unfortunately, this legislation which would have closed loopholes in the Equal Pay Act, was blocked from a Senate vote by a minority of Senators last year. In the current Montana legislative session, Representative Franke Wilmer introduced a bill to provide criteria for pay equity, guiding businesses toward better pay practices and holding them accountable. Sadly, this legislation was never allowed out of Committee.
In addition to supporting legislation of this kind, the Business and Professional Women’s Foundation also believes that we must encourage businesses to remain mindful of what they pay their employees, and that women should be given the knowledge, tools, and encouragement to achieve pay equity at work by continuing to step into male-dominated occupations, negotiating better pay and advancement, and advocating for awareness and improvements.
The wage gap for Montana women should concern us all – it hurts women, families, and the economy. Those who wish to reduce safety net programs like WIC, Food Stamps, Medicaid and Medicare should appreciate the importance of fair wages in allowing hard working Montanans to support themselves. Those who care about the economic security of families must appreciate that the wage gap causes not only short term hardship for family budgets but also compounds into long-term asset poverty for women and families. Those who care about the strength of our economy must surely support fair, merit-based pay for high quality workers, regardless of their gender. Turn a fresh eye to your own place of employment and work for pay equity in Montana.
