Paycheck Fairness Act Ignores Women’s Preferences and Needs

by Christina Sandefur

February 6, 2019

Last week, Democratic lawmakers reintroduced the Paycheck Fairness Act, which they claim would protect women from pay discrimination in the workplace. The Paycheck Fairness Act sounds good, but “equal pay for equal work” is already the law—and has been for over 50 years.

So what’s left for the Paycheck Fairness Act? It would force employers to report employees’ salaries to the government and allow employees to use that information, without valuable context, as a weapon against employers. And it would deem employers guilty until proven innocent, forcing them to justify supposed pay disparities through costly litigation. In other words, the bill treats women as incapable of negotiating the terms of their employment—and as victims of the patriarchy if they should dare to choose flexibility or other benefits over higher pay.

And it’s based on the “gender pay gap,” which has been debunked time and time again. As the Heritage Foundation’s Romina Boccia points out, the oft-cited gender pay gap statistic—that women are paid only 78 cents on the man’s dollar—is misleading. When one takes into account a number of factors based on individual preferences, such as education, choice of profession, level of experience, and desire for flexibility, the “pay gap” is about 95 percent, not 78 percent.

In fact, the arguments in favor of today’s Paycheck Fairness Act were once rejected by egalitarian feminist groups who opposed state laws “protecting” women from working too much or making too little money. Indeed, the National Woman’s Party, original champion of the Equal Rights Amendment, wholeheartedly rejected protective legislation that singled women out for what they considered to be restrictive and discriminatory treatment.

They weren’t the only ones. Nearly 50 years ago, the Equal Employment Opportunity Commission declared that state laws that “prohibit or limit the employment of females…in certain occupations…do not take into account the capacities, preferences, and abilities of individual females” and “conflict with and are superseded by title VII of the Civil Rights Act of 1964.” Yet the Paycheck Fairness Act does just that—it disregards individual women’s preferences and could have the practical effect of pricing women out of jobs.

If the Paycheck Fairness Act became law, it would more than likely backfire and harm workers—both male and female. And it wouldn’t be the first time such well-intentioned “protective” laws had that effect. In the U.S., state women’s minimum wage laws of the early 20th century significantly reduced the employment of women. More recently, a Harvard Business Review study of Denmark’s version of the Paycheck Fairness Act found that, while the “pay gap” did shrink, it wasn’t because women made more money, but because men made less.  

The Paycheck Fairness Act would also undermine worker productivity, by incentivizing businesses to move away from performance-based pay. The same Harvard study showed a 2.5 percent decline in worker productivity under Denmark’s version of the Paycheck Fairness Act. A decline in worker productivity usually means fewer goods at higher prices—and a decrease in everyone’s standard of living.

Moreover, the Paycheck Fairness Act would encourage employers to offer one-size-fits-all jobs that don’t take into account individual workers’ needs. Studies show that, on the whole, while men place a high premium on a larger paycheck, women value flexibility at work more than men do. That’s why the number of women-owned businesses increased by 3,000 percent since 1972, and women are increasingly choosing to work in the “gig” economy. In these scenarios, women overwhelmingly believe they can get equal pay for equal work. Laws like the Paycheck Fairness Act make it costly and undesirable for employers to offer flexibility in hours and benefits. That hurts all employees—especially women.

So what can we do to empower women to succeed? Let’s start by treating them as individuals with unique preferences and needs. Instead of pushing one-size-fits-all, top-down agendas, let’s get rid of unnecessary occupational licensing laws and pave the way for all individuals—regardless of sex—to pursue the job of their choice. 

Christina Sandefur is the Executive Vice President of the Goldwater Institute.