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The Gist on the Gender/Race Salary Gap

President Obama declared today, April 20th, National Equal Pay Day:

“Throughout our Nation’s history, extraordinary women have broken barriers to achieve their dreams and blazed trails so their daughters would not face similar obstacles. Despite decades of progress, pay inequity still hinders women and their families across our country. National Equal Pay Day symbolizes the day when an average American woman’s earnings finally match what an average American man earned in the past year. Today, we renew our commitment to end wage discrimination and celebrate the strength and vibrancy women add to our economy.”

Read the full press release here.

If you haven’t heard, women make 77 cents for every dollar men make.  However, that statistic is true for the average white woman.  This chart, included in a report done by NPR’s Jennifer Ludden on the salary gap and current legislation’s efforts to squash it, shows how women of color make far less than 77%.  And this is fine and dandy when you’re thinking about one dollar, but do the math and multiply this over the course of your career, from starting bonuses to retirement, and there’s a lot of money hiding in this pay gap.

Source: Bureau of Labor Statistics (2008 annual averages) Credit: Alyson Hurt/NPR

And sadly, this is below the global average for women’s wages in comparison to men’s.  According to a 2008 report by the International Trade Union Confederation, globally women earn on average 15.6 percent less than men (that’s 84.4 cents for every dollar). You can read their fascinating report here.  And interestingly enough, in the country of Bahrain in the Persian Gulf, women make 40% more than men, which is also mentioned in the report.  Go figure.

Here’s another great chart included in Ludden’s article which shows how the gender/race salary gap has widened and lessened in America since the Equal Pay Act in 1963.

Source: U.S. Census Bureau

The Equal Pay Act (the details of the act found here) was signed into law by JFK in 1963.  The law argued that essentially this gender salary gap was bad for business.

This act has helped improve the gender wage gap since 1963 by almost 20%, as shown in the chart above.  The act enabled women to file suit against a company within 180 days if they suspected pay discrimination.  The Lilly Ledbetter Fair Pay Act, the first bill to be signed into law by President Obama (January 29, 2009), extended that time frame by allowing women 180 days after each paycheck to file suit for suspected pay discrimination.  (Find out more details about the act from Wikipedia and Open Congress.)

Obama’s statement on the act follows JFK’s, stating, “It’s about parents who find themselves with less money for tuition and child care,” Obama said last year. It’s about “couples who wind up with less to retire on. [In] households where one breadwinner is paid less than she deserves, it’s the difference between affording the mortgage or not.”

Surrounded by leaders like House Speaker Nancy Pelosi and Secretary of State Hillary Clinton, and with the new law’s namesake, Lilly Ledbetter, at his side, President Barack Obama signs into law the Lilly Ledbetter Fair Pay Act -- a powerful tool to fight discrimination. Joyce N. Boghosian - White House

This brings us to the Paycheck Fairness Act.  This act, first introduced by then Senator Hillary Clinton in 2005 and Representative Rosa DeLauro, pretty much strengthens the Equal Pay Act of 63.  Ludden states, “the Paycheck Fairness Act would make it easier to prove gender discrimination and would toughen penalties. It would also try to erode what advocates say is a paralyzing secrecy around salaries: The bill would ban companies from retaliating if workers talk to each other about pay.”  (A great breakdown of the act can be found here from the National Committee on Pay Equity’s website.)

Ludden states: “Whether or not the Paycheck Fairness Act becomes law, the Obama administration plans to crack down on pay inequity. Labor agencies, which saw their budgets shrink under the Bush administration, are getting a new infusion of staff and money. Pay equity consultant Tom McMullen says companies should prepare…

In February, the Obama administration announced a task force to coordinate enforcement of equal pay laws. It plans an education campaign to make sure that companies know: Equal work means equal pay.”

Obama’s press release on the proclamation of National Equal Pay Day detailed his administration’s efforts for pay equality:

“To further highlight the challenges women face and to provide a coordinated Federal response, I established the White House Council on Women and Girls. My Administration also created a National Equal Pay Enforcement Task Force to bolster enforcement of pay discrimination laws, making sure women get equal pay for an equal day’s work. And, because the importance of empowering women extends beyond our borders, my Administration created the first Office for Global Women’s Issues at the Department of State.”

Fantastic news, eh?  And now you are up to speed, amigos.


For those even more interested in the gender/race salary gap, Ludden’s report also has this amazingly interesting sidebar:

Equal Pay For Different Work?

Women’s groups say that fields traditionally dominated by women tend to be undervalued, and that this accounts for much of the ongoing gender pay gap. This is a contentious claim, with critics offering a number of other reasons, such as the danger associated with many mostly male fields. In any case, the Fair Pay Act — which is considered unlikely to pass Congress — would have companies evaluate their salary structure to ferret out such bias. Many large corporations, countries like Sweden and Canada, and a number of U.S. state governments already do this. The state of Minnesota has a gender pay equity law and uses an outside consultant to help set wage levels.

In 1982, a state evaluation found a sex-based wage disparity between delivery van drivers and clerk typists. The two jobs were deemed to be “equal work,” yet the drivers (mostly men) at the time earned $1,900 a month, while the typists (mostly women) earned $1,400.

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