The White House theme on Thursday was economic opportunity for woman, with messaging pegged to a new National Economic Council document, “Jobs and Economic Securityfor America’s Women,” President Obama’s “backyard” event in Seattle, and his campaigning for Sen. Patty Murray (D-WA).
Unfortunately, in its highlighting of the Paycheck Fairness Act, the White House’s messaging Thursday conflicts with the President’s overarching theme, that of economic recovery and jobs growth. At the same time, the messaging reminds the public of the political power of the litigation lobby.
The White House blog listed the Paycheck Fairness Act as No. 2 in its list, following Lilly Ledbetter Act Fair Pay Act, in its list, “10 Ways Our Economic Policies Benefit Women.”
It’s weird to be boasting about a bill that hasn’t passed yet. But more importantly, the legislation would lead to a more stagnant labor market, transfer more business wealth into the pockets of trial lawyers, and raise marginal costs of each new hire. A White House concerned about jobs should be renouncing the bill, not touting it.
The Paycheck Fairness Act would extend the federal government’s control over employers’ personnel decisions through rigid “pay equity” mandates and then expanding the grounds for litigation for even unintentional violations. In making hiring and salary decisions, an employer’s chief concern would not be whether the person is worth the price in the competitive labor market, but rather, “Am I going to get sued?”
As the National Association of Manufacturers’ 2009 “Key Vote” letter to the House explained:
By removing all limits to punitive and compensatory damage awards on claims made under the Equal Pay Act (EPA), the Paycheck Fairness Act (H.R. 12) would expose employers to increased threats of litigation – even when unintentional pay disparities may have occurred. Its passage would likely prompt many employers to purchase additional legal liability insurance, increasing their costs and decreasing their ability to raise wages, increase benefits or hire new U.S. House of Representatives workers. In fact, it is difficult to imagine a scenario in which the bill would not lead to lower wages and fewer jobs.
Senate Majority Leader Reid re-introduced the Senate version of the bill, S. 3722, in late September and filed cloture for possible Senate consideration in a lame-duck session of Congress. We tend to think the maneuvering is more about exciting the political base than actually pushing through the bill in a very crowded, riven post-election Congress.
Still, for employers it’s hard to ignore: A President campaigning on expanded economic opportunities for women by touting legislation that would diminish opportunities for men and women, both.