Equal Pay Act

A Moment on the Lips; A Lifetime on Pay Slips

by Kathryn Ciano on October 13, 2010

in Culture, Economy, Labor, Zeitgeist

New studies suggest that very thin women earn proportionately more money than do average-sized women. Comprising only women within 25lbs of doctor-recommended weight, the latter study strictly compares the rail-thin to her average-sized female colleagues.

The Wall Street Journal reports today that employers “seem to treat women…the way the fashion industry does”; thin women get much higher paychecks than do average-weight women, while thin men tend to earn less than their average-weight colleagues:

The study is the first look at the effects of being very thin on men vs. women. Separate studies of 11,253 Germans and 12,686 U.S. residents led by Timothy A. Judge of the University of Florida found very thin women, weighing 25 pounds less than the group norm, earned an average $15,572 a year more than women of normal weight. Women continued to experience a pay penalty as their weight increased above average levels, although a smaller one — presumably because they had already violated social norms for the ideal female appearance. A woman who gained 25 pounds above the average weight earned an average $13,847 less than an average-weight female.

Men were also penalized for violating stereotypes about ideal male appearance, but in a different way. Thin guys earned $8,437 less than average-weight men. But they were consistently rewarded for getting heavier, a trend that tapered off only when their weight hit the obese level. In one study, the highest pay point, on average, was reached for guys who weighed a strapping 207 pounds.

Plenty of logical explanations account for the disparity and have nothing to do with “sizeism.” Perhaps folks who conform to social image ideals produce better results because they can better influence others. Perhaps people who work hard to attain an unnatural weight — very thin for women, overtly muscular for men — apply the same work ethic to their jobs. Perhaps women who care enough about body image to forego dessert are more attuned to their bosses’ opinion of their performance in other areas. Or perhaps the body types prevalent in the study sites — Germany and Florida — tend towards thin, and 25lbs becomes a highly variable range.

Even more poignant is the idea that a great deal of weight control is competitiveness. Weight plays into office politics. Office politics affect confidence. Confidence in turn changes the way people perceive themselves — and changes the way people negotiate for employer perception or pay.

WSJ goes on to cite a September George Washington University study comparing obesity costs across genders:

Meanwhile, in separate research, economists at George Washington University tabulated the cost of obesity and found that it’s more expensive for a woman to be obese than for a man, according to the New York Times. (Their calculations included direct costs, like medical expenses, and indirect expenses, like lost wages and reduced work productivity.)  While a man racks up $2,646 annually in extra expenses if he is obese, a woman’s obesity costs her $4,879, almost twice as much[.]

The weight-gender-pay spectrum reeks of sexist scandal, but there’s another side to this story.

Women have fared much better in the recession than have men. Women’s paychecks may be more elastic to social pressures, but this flexibility provides a measure of job security that men’s inelastic, less-sensitive paychecks seem to lack.

When considering drastic measures like the Equal Pay Act 2010 that will subject women’s salaries to the inelastic measures men enjoy, recall that pay flexibility has allowed women to retain jobs at a much higher rate during the recession. Women have also bounced back into the workforce in droves, while male-dominated sectors continue to fall and men continue their weak showing in gender-neutral industries.

Price always conveys information.

Paycheck disparity may sound like scandal, but as a measure of personality cues, workplace signaling, willingness to negotiate, and hours actually worked, this is merely one more factor in the employee informational bundle.

Employers pay workers who product more than they cost. If weight plays into this formula, hopeful employees take note. If we erect a price floor by attempting to thwart the market information available here (or by passing yet more “equal pay” legislation), the next round of layoffs will hurt much worse.

Private Employers Cut 39,000 Jobs in September

by Hans Bader on October 7, 2010

in Deregulate to Stimulate, Economy, Employment, Energy, Environment, Global Warming, Healthcare, Labor, Legal, Regulation, Stimulus to Nowhere

The private sector shed 39,000 jobs in September.  Liberal journalists claim this was “unexpected.”  This reveals their shaky grasp of economics.

If you were an employer, why would you hire somebody in an economy that’s barely growing, when you could be hit by all sorts of employee-related expenses in the future, the way employers have already been hit by increased costs due to Obamacare?  Employers are worried about additional costs that could force them to lay off newly hired workers if Congress passes cap-and-trade global warming legislation (which would impose massive costs on many industries, requiring cutbacks in production).  Recent EPA rules aimed at global warming will wipe out at least 800,000 jobs, with a blizzard of additional new rules expected to follow.  And the stimulus package, despite its $800 billion cost, did little for employers, wiping out export-sector jobs, and funneling green-jobs money to foreign firms.  (The current weak “recovery” actually began in June 2009, before the stimulus package even began being spent.)

Thanks to steadily-expanding government red tape, every time you set a worker’s pay, or have to fire a lazy or incompetent employee, you now face the risk of being sued  (You are less likely to hire someone if you can’t fire them later if they turn out to be lazy or incompetent).  Employees who are fired for even good reasons often turn around and sue the employer for age, race,  sex, or disability discrimination, or for the “hostile work environment” they claim existed during their employment due to things like overheard remarks.  Getting meritless lawsuits tossed out is expensive — years ago, it was typically $25,000 on legal bills if the employer succeeded in getting rid of the lawsuit at the earliest possible stage (on a pre-trial motion to dismiss), $75,000 at the next stage (”summary judgment”), and $250,000 if the employer won at trial.  Under a legal double-standard called the Christiansburg Garment Rule, if the employer wins, the worker seldom has to pay the employer’s legal bills; but if the worker wins, the employer has to pay the worker’s legal bills as a matter of course (or even a multiple of the employee’s legal bills if the lawsuit is brought in some liberal states like New Jersey (see  Rendine v. Panzer (1995)).

You are much less likely to hire someone if you can’t avoid being sued by them later over the pay package you negotiated with them when they were hired.  That’s now a real possibility for employers.  Setting employee pay has gotten harder under the Obama administration due to the 2009 Lilly Ledbetter Fair Pay Act, the first law signed by President Obama, which essentially eliminates the deadline for bringing pay discrimination claims against employers, meaning that employees can wait many years after their pay is set, and sometimes even after they are fired, before bringing a lawsuit against their employer. (Some courts have even allowed employees to use the new law to challenge demotions many years after they occur, under the theory that their demotion indirectly affected their pay.) The Ledbetter Act was named after Lilly Ledbetter, who waited until she was about to retire before suing over alleged pay discrimination, meaning that the supervisor who allegedly discriminated against her was dead and unable to defend himself against discrimination charges by the time the jury decided her case.  (Ledbetter testified in her deposition that she knew of the pay disparity by 1992, but didn’t file a complaint with the EEOC until 1998).  The Ledbetter Act overturned the deadline applied by the Supreme Court in its 5-to-4 ruling against Ledbetter.

The Obama administration wants to make it even easier to sue for discrimination through bills like the Civil Rights Restoration Act and the Paycheck Fairness Act.  The Paycheck Fairness Act would require equal pay for some employees who do unequal work, and allow them to seek unlimited punitive damages against their employers.  Right now, most pay discrimination claims require a showing of unequal treatment (that is, intentional discrimination), although, under Title VII of the Civil Rights Act, big employers can be ordered to pay very limited amounts (back pay, not emotional distress or punitive damages) for certain practices or pay scales that have an unintentional “disparate impact” on women or minorities (like paying people more because they have a high-school diploma, if the job supposedly doesn’t really require a high-school diploma).  The Paycheck Fairness Act would import such standards into the Equal Pay Act, which covers even tiny employers (unlike Title VII), and subject them not merely to back-pay claims, but to uncapped punitive damages and claims for “emotional distress” over pay disparities.

It would require the employer to prove in court things that no tiny employer could ever afford the legal-fees to demonstrate.  Under the Paycheck Fairness Act, an employer would have to show an overriding “business necessity” and lack of any alternative to justify the use of certain factors “other than sex” in setting pay scales.  This is worrisome, because even under existing laws that allow lawsuits over “unintentional” discrimination, employers have been forced to spend hundreds of thousands of dollars on expert witnesses to show that a challenged practice was reasonable, only to have the courts say that that was not enough, that the practice had to be more essential (and more closely-related to technical requirements like “content validity” and “construct validity”).

More Biased Press Coverage of the Supreme Court and Its Ledbetter Decision

by Hans Bader on December 6, 2009

in Legal, Personal Liberty, Politics as Usual, Sanctimony

Press coverage of the Supreme Court is sometimes marred by ideological bias.  Liberal court reporters sometimes distort what Supreme Court justices say, or the facts of Supreme Court rulings, in order to make justices look bad.  One example is the blatantly false claim by an Arizona reporter that Justice Scalia criticized court desegregation rulings (a claim the reporter belatedly admitted was false).

Another is the extremely inaccurate press coverage of the Supreme Court’s 2007 decision in Ledbetter v. Goodyear. The New York Times has peddled fables about that decision that persist in the media despite being debunked by journalists like James Taranto, legal scholars like David Copus, legal commentators like Stuart Taylor of the National Journal, and lawyers like Paul Mirengoff.

Plaintiff Lilly Ledbetter lost her pay discrimination case because she filed her complaint to the Equal Employment Opportunity Commission (EEOC) too late. The Court said that, in most cases, employees should file an EEOC complaint within 180 days of their first discriminatory paycheck, if they want to sue under Title VII of the Civil Rights Act.

But the Court also specifically left open the possibility that employees could sue later simply because they didn’t know of the discrimination at the time — a situation it said did not apply to Ledbetter’s case (she testified in her deposition that she knew of the pay disparity in 1992, but only filed her complaint with the EEOC in 1998, around the time she retired). The Court pointedly noted that the plaintiff could have pressed her claim instead under the Equal Pay Act, which has a longer deadline for suing. (Moreover, as lawyer Paul Mirengoff notes, the Supreme Court has long allowed hoodwinked employees to rely on equitable tolling, waiver, and estoppel to sue beyond the deadline, when employer deception keeps them from suing within 180 days, as it made clear in its Zipes decision).

But newspapers like The New York Times did not report any of this. Instead, Times reporters like Linda Greenhouse caricatured the Supreme Court’s decision, falsely claiming Ledbetter never knew of the pay disparity until she retired, and that the Supreme Court created a rigid rule that employees must always sue within 180 days of their first discriminatory paycheck, regardless of whether they knew or could have known of the pay disparity.

As Stuart Taylor notes, this false claim ended up in literally “hundreds of media reports.” But it was completely untrue. As Taylor notes:

Ledbetter admitted in her sworn deposition that “different people that I worked for along the way had always told me that my pay was extremely low” compared to her peers. She testified specifically that a superior had told her in 1992 that her pay was lower than that of other area managers, and that she had learned the amount of the difference by 1994 or 1995. She added that she had told her supervisor in 1995 that “I needed to earn an increase in pay” because “I wanted to get in line with where my peers were, because… at that time I knew definitely that they were all making a thousand [dollars] at least more per month than I was.”

When The Tampa Tribune inadvertently repeated this fable — that Ledbetter never knew of the pay disparity she sued over until she retired, and that the Supreme Court threw out her claim solely because her complaint was not within 180 days of her first paycheck — it eventually corrected its error, at least in the online version.

Originally, the Tribune story, entitled “Equal pay crusader says she’ll always be ‘second-class citizen,’” wrote that the Court’s “majority said that by law she should have filed her case earlier — within 180 days of her first paycheck. It failed to recognize Ledbetter didn’t know about the pay discrepancy until just before she retired in the late 1990s.” Now, it has corrected that paragraph to more accurately read:

The majority said that by law, she should have filed her case within 180 days of her first paycheck – or at least 180 days after she learned of the pay discrepancy. Ledbetter retired from Goodyear in the late 1990s, after 20 years with the company. She learned of the pay discrepancy before she retired, but more than 180 days passed before she filed her case.

By contrast, The New York Times‘s staff not only refused to correct its erroneous reporting, but also refused even to read the portions of the Supreme Court’s Ledbetter decision (like footnote 10) that proved my point about its inaccurate reporting, choosing instead to rely on Ledbetter’s self-serving, unsubstantiated claims to Congress contradicting the Supreme Court. The Times chose instead to claim that Ledbetter never knew of the discrimination until around the time she retired, and that the Supreme Court threw out Ledbetter’s claim regardless of whether she knew or could have known of the discrimination, simply because she did not complain within 180 days of her first paycheck.

But the Supreme Court did not create any such rigid deadline, and expressly left open the possibility that plaintiffs can wait to sue until after learning of discrimination, under the so-called “discovery rule.” It noted in footnote 10 of its opinion:

[W]we have previously declined to address whether Title VII suits are amenable to a discovery rule. . . .Because Ledbetter does not argue that such a rule would change the outcome in her case, we have no occasion to address this issue.

In short, since Ledbetter didn’t even claim that a lack of knowledge had prevented her from suing in time, relaxing the deadline for her would have done her no good. (Moreover, if she had lacked knowledge as a result of being hoodwinked by her employer, she could have had the deadline extended under the Supreme Court’s doctrine of equitable tolling, which applies somewhat more narrowly than the discovery rule).

After she lost her case, Ledbetter claimed to Congress that she had not learned of the discrimination until the end of her career — a claim parroted by gullible politicians and the press. But in Ledbetter’s deposition, she admitted she knew by 1992 – years earlier — that she was paid less than her male peers, notes David Copus in page 8 of the online version of his October 2008 law journal article “Pay Discrimination Claims After Ledbetter.” Similarly, Washington lawyer Paul Mirengoff notes that:

Ledbetter testified that she knew by 1992 that her pay was out of line with her peers. In 1995, she spoke to her supervisor about the problem, telling him that “I knew definitely that they were all making a thousand at least more per month than I was and that I would like to get in line.” Yet Ledbetter waited until 1998 to file her EEOC complaint.

Moreover, although the Supreme Court dismissed Ledbetter’s claim under Title VII, the discrimination law with the shortest deadline, it pointed out that the plaintiff could easily have pressed her claim instead under the Equal Pay Act, which has a longer deadline for suing. As it noted, “Petitioner, having abandoned her claim under the Equal Pay Act, asks us to deviate from our prior decisions in order to permit her to assert her claim under Title VII.” She might have won her case had she simply appealed based on the Equal Pay Act.