The White House announced new requirements last Friday that would require businesses to submit detailed pay data to a federal database to screen for pay disparity. Event participants rolled out the same tired lines about the gender wage gap that have been heard countless times before. Looking at pay statistics more closely, however, it’s clear that there is a big credibility gap among those railing against the gender pay gap.
The pay gap argument is based on U.S. Census data that claims to show that women earn 79 cents for every dollar a man earns. There’s a problem with that statistic, though: It doesn’t compare men and women who perform the same work. It just compares the median wages of all men and all women.
In America we all believe in equality, and we all support the concept of “equal pay for equal work.” But saying women earn 79 cents to every man’s dollar doesn’t compare equal work, equal skills, equal education, or equal experience. When all things are considered, the so-called pay gap virtually disappears.
By ignoring this basic fact, activist groups and politicians would have you believe that some kind of rampant workplace sexism is to blame for the fictitious wage gap — but that’s not the case. The pay gap is due to the choices we make.
More men, for example, choose to pursue careers in science and engineering, while more women choose to be social workers or teachers. Women also value flexible hours and tend to take more time out of the workforce while on average men more time in the office.
In other words, women who have children tend to be more open to work that allows them to spend time with their families, while men with children lean towards earning more money to support their families – even if it means working more hours to do so.
Pay gap activists are using this misleading statistic to push bad public policy that will negatively impact job creation and the economy. Proponents claim the proposed pay law would lend transparency to compensation decisions, but in reality, it will do more to enrich trial lawyers than increase fairness in the workplace. It will allow employees to sue for unlimited amounts of compensatory and punitive damages while shifting the burden of proof to employers, who would need to justify every pay disparity among their employees.
More regulations are the problem, not the solution to women’s success in the workplace. The true sources of their economic empowerment is a result of the opportunity economy. The free market already penalizes discrimination through the profit and loss system. If you don’t hire based on merit, you will be penalized. Yet it is endangered by overregulation.
In a recent poll of 400 small business owners commissioned by the Job Creators Network, three in five respondents said overregulation threatens the viability of their businesses. As a result, four out of five business owners said they won’t be hiring new employees over the next year.
In an attempt to determine the real issues facing women in the workplace, JCN is hosting a town hall in New Hampshire on Friday. It features local businesswomen and is moderated by CNN political commentator Margaret Hoover. Instead of telling women employees what is best for them, we’re actually going to ask them what they want in the workplace. We suspect participants will pinpoint exactly what the White House did last Friday: regulations – just fewer of them, not more.
Elaine Lutz is Chief Marketing Officer at the Job Creators Network