White House Advisor Valerie Jarrett has written an op-ed in today’s Washington Post in support of the Paycheck Fairness Act. Her piece uses outdated and inaccurate data to misrepresent the alleged pay gap between genders. In claiming women earn only 77 percent of what their male counterparts do, Ms. Jarrett conveniently ignores updated statistics from the Department of Labor that show the gap is much smaller. More interestingly, she ignores a more comprehensive analysis of the issue that the Department of Labor commissioned by the CONSAD group. This analysis available here was conveniently removed from the Department of Labor’s website after the Obama Administration took over the agency.
While the specifics of the alleged pay gap can be debated ad nauseum by economists, we understand why the White House felt it necessary to offer an op-ed to the Post the paper soundly rejected the proposal in an editorial in January 2009.
While we don’t always agree with the Post’s ed board on many issues, we strongly concur with their position on the bill. The Paycheck Fairness Act will not prevent actual instances of illegal pay discrimination. It will, however, allow the Federal government to second-guess almost all employee wages and encourage lawsuits that expose employers to unlimited damage awards. The bill substantially restricts employers’ ability to base pay decisions on legitimate factors such as professional experience, education, training, employer need, local labor market rates, hazard pay, shift differentials and the profitability of the organization. The legislation could expose employee wages or salaries to peers, family, friends and competitors.
That’s bad news for employees, as employers are already facing tremendous amounts of uncertainty in today’s economic conditions.
It’s unfortunate that the White House and Senate leaders are pushing this type of legislation before the midterm elections for what looks to be political reasons. Congress should instead focus on getting the economy back on track and not make it harder for manufacturers to create and retain jobs.