Pay for Today (and Tomorrow): Compensation in the Nonprofit Sector (Rutgers)
Womenintheeconomy
1. Closing the Wage Gap: A Possible
Role for Comparable Worth?
December 10, 2012
Nicole Taverna
Tara Lombardia
Matthew Vittorio
Nolan Harrington
Andrea Schroeder
2. Evidence of continuing Wage Gap
Possible Explanations:
- Crowding Hypothesis
- Women “crowd” into typically female occupations because there
are limited opportunities for them in “men’s work”
- Leads to reduced wages
- Social norms
- Women are expected to give up promotions to spend time with
their children
- Women tend to choose jobs with flexibility
- Factors that reduce wages:
- women tend to work in fields that require less training
- women have less experience
3. Evidence of continuing Wage Gap
Statistics about Wage Gap:
- Wage gap widens with age
- Wage gap widens as level of education is increased
- Right out of college, women only earn 80% of what their male counterpart
earns
- Wage gap widens for women of color and Hispanic descent
- Narrows most for Asian women
- Half of the wage gap remains unexplained
4. Evidence of continuing Wage Gap
Problems women continue to face:
- Employers are less likely to hire women with children
- Women with children are seen as less productive and reliable
- If hired, they are usually offered lower salaries
- Increasing the number of women in traditionally male fields is likely to
improve wages for women, but it’s unlikely to fully eliminate the pay gap.
5. Why Does The Wage Gap Matter?
Maximizing profits
Occupational wage gap decreases with
development and FDI
Globalization, trade and job opportunities,
investments in infrastructure
The wage gap as a tool to change the
gender gap
6. What Are Some Causes
Occupational segregation
50%
Inequity at home and in the
marketplace
Firms vs. families
7. What Can Be Done
Policy efficiency depends on the
magnitude of the components
targeted
Comparable worth
Contracts
8. Potential Solution: Comparable
Worth
Men and women should be compensated equally for
work requiring comparable skills, responsibilities
and effort
Introduced in 1970’s following Equal Pay Act in
1963
Evaluating Comparable Worth: Job Evaluations
Leave out market forces
9. Comparable Worth: Why It
Matters
Comparable worth shows that work has an
intrinsic or an innate value apart from the
monetary wage it commands in the labor
market
Remedy for the earnings differential
between male and female jobs
And as a remedy for the low incomes and growing poverty
among women
10. Helpful, Not Harmful
Where comparable worth has been implemented,
the effects of eradicating pay inequality have been
large and the costs have been relatively small and
distributed over a number of years
There will be costs for firms, but they are
necessary
Help all women, more so low wage workers than
higher paid workers
11. Potential Comparable Worth
Problems: Is it really the solution?
Personal Freedoms
Speech, Press, Religion
Economic Freedom
Cannot simply alter the Free Market System
Slowly giving Government control over wages
Also, over employee-employer relationships
12. Comparable Worth Shortcomings
Economic principles are ignored
Supply and Demand
Individual choices determine S&D for employment
These interactions determine wages
Individual liberty cannot and should not be quantified or
controlled
Does not have the ability to adjust for change
Buggy Whip making
To deny employers the right to adjust wages will doom our
economy
13. The Willis Scale
Best known comparable worth scale
Basis of One-Billion-Dollar court decision in Washington
Four factors
Knowledge/Skill
Mental Demands
Accountability
Working Conditions
Sub-categories
Ex. “the impact of one’s work”
Private consulting firms
14. The Willis Scale Cont.
Example:
A man in Venice Beach, California
Juggles live-running chainsaws
Skill, mental demands, varying work conditions, crowd
accountability
CEO or Nuclear Engineer
Why difference in wages?
NO DEMAND
Also, unable to measure job satisfaction
15. More Shortcomings
If unjust to pay women less, it is unjust to pay anyone less
than their “worth”
Government would eventually mandate every wage based on
worth determined by faulty measurements
Would not be correlation between wages and demand for
skills
Ineffectively distributed labor
Scarcity of engineers, surplus in female dominated fields
No such thing as intrinsic economic value
Given a wage based on worth suppresses right for free and
mutually agreeable exchanges
16. Other Options?
Affirmative Action
-Policies that recommend the deliberate recruitment, hiring, and
promotion of underutilized groups
-Increasingly used by the feminist movement throughout the 1970s to
promote women’s occupational advancement
-Positives: Benefitted women who gained entry into male-dominated
professional, managerial, and craft jobs; made lawful for women to
claim gender-based improvement in economic conditions
-Shortcomings: Only helps small percentage of women, suggests that
upward mobility is only achieved in male occupations, women lose
monopoly over their traditional jobs, led to men’s subtle domination
within traditionally women occupations, degradation of job status where
women have integrated
17. Other Options?
Support for working mothers/families
-parental leave policies, promotion of child care, flexible
work hours, reducing daily hours of work
-More career interruptions (such as leaving to take care of
children) for women has helped lead to wage gap
-Family and Medical Leave Act: Approved period of unpaid
maternity leave
-Benefits: reduces minimum time requirement, removes
burden of searching for another job
-Shortcomings: Only applies to women in mid-size or
large companies, time-span is relatively short, leave is unpaid
18. Other Options?
Train Women to Negotiate Better
-Women are reluctant to believe they deserve more and are more hesitant to
bargain for a greater salary
-Most employers expect new hires to bargain over their initial employment
terms and don’t understand why more women don’t do so
-Women have the capabilities to negotiate (better and reading nonverbal
signals, have an indirect style which may induce opponents to lower their
guard)
-Specific training in negotiation courses, teaching women that they are
worth as much as their male counterparts, and encouraging women to
negotiate their initial terms of employment when offered a new job can all
help
-Difficulties: Women are taught from a young age to focus on others more
than themselves. Would have to thus overcome entrenched societal
expectations