Sarah Denio Seminar in Industrial Psychology Literature Review #1 October 1, 1999
The Federal Government has been struggling for almost four decades now to close the gap between the wages of men and women. In the 1960�s, women were paid approximately 60 cents for every dollar men received for their work. Although progress has been made since Congress passed the Equal Pay Act in 1963, equality has not yet been achieved. Today, thirty-six years later, women still earn only seventy-six percent of the wages of men.
Early studies found convincing evidence that women were being construed as inferior when it came to their work. Jobs that were dominated by women were paid less than male-dominated jobs, not because they were intrinsically worth less, but because they were dominated by women (Treiman & Hartmann, 1981:93; Remick, 1984b; and Steinbert et al, 1986 as cited in Ames, 1995). Jobs labeled �feminine� were viewed as requiring less effort and ability than identical jobs given a �masculine� label in a study conducted by Taynor and Deaux in 1975. Similarly, Deaux and Emswiller found in 1974 that both men and women attributed successful women�s performance less to effort and more to luck. What�s more, Heilman (1979) and Touhey (1974) demonstrated that people tend to devalue the prestige and desirability of jobs that they were told would become female dominated in the future.
Comparable worth is a concept that takes a different approach to remedying these injustices. It may be thought of as a step beyond that of equal work. With �equal pay for equal work,� jobs must be determined to be equal in all aspects, including content. �Comparable worth� on the other hand, refers to the notion of paying people equally according to the value, or �worth,� of their work. It is distinguished from �equal work� in that it does not require that comparison jobs be equivalent in terms of individual factors or actual task content. Jobs are judged similar, thus comparable, based on composite ratings of requirements such as skill, effort, responsibility, or other factors valued by an organization. All in all, comparable worth is necessary because discriminatory pay practices of the past were not fully addressed by equal employment opportunity legislation, and thus effects have been perpetuated by conventional pay administration practices (Taylor, 1989). Comparable worth rests on the theory that pay differentials are caused by sex discrimination. It proposes that sexual segregation in jobs has unjustly depressed women workers� wages. According to Wittig (1989), we may look at how this segregation has contributed to the wage gap from two viewpoints. Firstly, a significant portion of the sex pay gap has undoubtedly been caused by job placement discrimination, which has placed women into less skilled, less demanding jobs. Secondly, the gap may be caused by �female� jobs being assigned lower pay, even when the jobs require skill equal to that in �male� jobs. There are several ways that this discrimination may be sustained: 1) job segregation related to prejudice by employers, consumers, and co-workers; 2) devaluation of jobs performed primarily by women and minority men; and 3) women and minority men�s job choices, assertiveness about pay, and other group tendencies (Wittig, 1989). So, how does one go about achieving comparable worth in their organization, you may bee wondering? First, a method must be developed for analyzing the worth of jobs, including, of course, a specific set of criteria for determining relative worth. This may be referred to as job evaluation. Next, you must evaluate the jobs against these criteria. Once this has been completed, jobs performed predominately by women must be compared to those held by men. That is the easier part. Unfortunately, less work has been done to examine the wage-adjusting procedures that may be used after job content has been analyzed. The translation of worth into pay is the most difficult, not to mention the most controversial, part of comparable worth (Ames, 1995). There are several questions that have yet to be answered with this respect. As stated by Ames, �If job content is to be determine pay, exactly how is it to determine pay?�What is deemed to constitute equity once worth has been determined?�How will we judge an equitable system?�And in the end, how will we know when it is fixed?�
Unfortunately, no static set of standards may be relied on to achieve equity. In order to implement comparable worth on a large scale, we must rely on policies to be passed and enforce its principles. But any criterion used in attempts at equality are subject to political influence and thus it is difficult to say how we may reliably implement comparable worth to achieve equal pay for men and women (Ames, 1995). For the time being, it appears to be in our best interest to implement whatever policies appear to be the most useful for achieving equality at any given time. Policies may be evaluated comparatively in order to assess how each stacks up against the other in terms of effectiveness. At any given time, whatever policy most successfully produces equity and rationality in pay setting can be treated as standard (Ames, 1995). Newer, more innovative approaches can always be tested against the currently accepted approach to determine which works best.
Studies have delved into various aspects of the comparable worth debate. In 1997 The American Federation of Labor-Congress of Industrial Organizations� (AFL-CIO) �Ask a Working Woman� survey (as cited in Mann, 1999) discovered that 94% of the women surveyed said pay was �very important� to them and that 2 out of 5 women cited pay as the �biggest� problem that women face at work. That same year, the AFL-CIO and the Institute for Women�s Policy Research conducted a national study on the wage gap, which generated some very powerful numbers. After accounting for differences in education, age, location and number of hour worked, the survey concluded that the country�s working families lose an average of $4,000 each year because of unequal pay. Specifically, women in traditional �women�s� fields lose an average of $3,446 each year and men in these fields lose an average of $6,259 when compared with other men. This equals $200 billion total income lost each year as a result of pay discrimination. Young women of today often go into the workforce with a distorted view, believing that the gender discrimination battle has been won. In reality, the AFL-CIO and the Institute for Women�s Policy Research forecast that the typical 29 year old woman with a college degree will lost about $990,000 in wages during her lifetime. (To project what it may cost you personally, check out www.aflcio.org/women/equalpay.htm).
So, can comparable worth reconcile these differences? Gardner and Daniel (1998) investigated the impact of comparable worth in the eight states that have reached the highest level of pay equity activity in the United States by implementing comparable worth/pay equity laws. These eight states are: Connecticut, Iowa, Minnesota, Montana, New York, Oregon, Washington, and Wisconsin. Pay gaps between men and women employees ranged from 14% to 31% in these eight states. Upon follow-up, it was determined that disparities between men and women�s wages were remedied by expending 1% to 4% of total payroll of the organizations.
Here in New York, the pay equity �law� is incorporated into Civil Service Article 14, which deals with labor union agreements. The state�s pay equity program was implemented through reclassification and compensation changes, which took place primarily from 1987-1989. New York�s efforts toward equality were found to have produced adjustments averaging $685 annually per affected worker. Overall, the cost to organizations was found to be approximately 1% of payroll. The researchers postulated that pay gaps that remain after pay equity has been implemented must stem from causes other than biased classification and compensation systems. This finding leads them to conclude that pay equity systems such as comparable worth may be used to complement, but not replace, other types of anti-discrimination measures.
This leads us to another side of the issue. Comparable worth has been visited by its fair share of critics. The first argument against comparable worth is that is it not at all necessary as some people postulate that the pay gap does not exist anymore. As stated by Michael Barlett, manager of labor law policy for the U.S. Chamber of Commerce, �as a general proposition, I don�t think for women coming into the workforce today the pay gap exists.� Bartlett and others claim that any pay inequity found today must be the result of �muddled arithmetic, faulty logic and failing to control for variables such as education and choice of occupation.� Bartlett�s position corresponds with that of Weidenbaum (1999) who asserts that workplace barriers to women have been reduced if not removed by public policy and private actions in recent years. Weidenbaum claims that �every study� shows that in the youngest of working groups, the pay gap has almost disappeared. He also claims that women on average have less experience because they are more likely to leave their jobs in connection with childbirth and childrearing, thus relinquishing themselves to discrimination.
Skepticism appears to be quite widespread according to a 1996 investigation. Whaples mailed out 193 questionnaires to randomly selected labor economists who were members of the American Economic Association. Three of the forty questions addressed comparable worth legislation. Participants were instructed to indicate whether they �generally agree,� agree�but with provisos,� or �generally disagree� with the statements. Overall, the survey demonstrates that labor economists vehemently reject the recommendations of comparable worth. Only nine percent of the economists indicated that they thought comparable worth should be adopted in the United States. Eight percent agreed but with provisos. Representing the majority, eighty-three percent disagreed with the idea of widespread adoption of comparable worth. In support of these beliefs, eighty-nine percent of the participants reject the argument that comparable worth would increase labor market efficiency and fifty-six percent reject that comparable worth legislation would increase labor market equity. As one may suspect upon viewing these statistics, the vast majority of the labor economists surveyed, seventy-three percent, indicated that they believe occupational segregation by gender to be caused by the choices of the workers, not by labor market discrimination. Although it was not noted in the article I read, I would be interested in knowing the gender demographics of the economists who participated in this study.
Another problem with comparable worth is that organizations are reluctant to implement it for fear of the possibly astronomical costs they may incur. Some employers are unable to hire workers because the mandated wage levels of comparable worth are too high or because they are required to give workers raises instead of using the money to hire more workers. Unfortunately, there are often serious discrepancies between market-determined wage levels and those determined by pay-equity studies, which can lead employers to avoid implementing comparable worth. What most of the problems and criticisms boil down to is the fact that comparable worth is a very subjective notion. It has wonderful intentions as the solution to the problem of pay disparities between men and women but at the present time, there still remain some kinks which need to be worked out before organizations will approach it with a more open mind, as well as an open pocketbook.
Recently, the entire class-action process for the handling of inequality issues has been handed over from the Equal Employment Opportunities Commission (EEOC) to the U.S. Department of Labor�s Office of Federal Contract Compliance Programs (OFCCP). This leaves the EEOC more time to hear complaints filed by individual employees at all types of companies, including those that don�t have government contracts. In turn, the entire process is sped up. The government theorizes that by speeding up the enforcement process, the policy is liable to shake loose more pay discrimination complaints, and hopes are that this will be enough to prompt more companies to clean up their compensation systems.
As explained by both Adams (1999) and Flynn (1999) in order to avoid a lawsuit, it is most important for organizations to have documentation and be able to explain pay discrepancies. Some common traits of organizations with equitable compensation systems are: 1) salaries and merit raises are based primarily on prevailing market pay scales for the industry, not simply on an employee�s arbitrary value to the firm; 2) differences in skills, performance, and tenure are boiled down to a system that the HR can monitor and control; and 3) compensation is reviewed regularly for imbalances caused by cutbacks, transfers, mergers or bulges in recruiting and any discrepancies are quickly corrected. Organizations agree that maintaining a balanced payroll system is imperative and may only be sustained through constant scrutiny. The overall goal is a gender-neutral organization that immediately recognizes any unfair discrepancies within the system (Adams, 1999).
As stated by Ames, �The question to be answered at the end of the day is whether the devaluation of women�s jobs is corrected by a given policy.� If the answer to this question is affirmative, then we may begin to rest assured that we are doing all we can to reconcile the differences in perceptions of men and women and their worth to the respective organizations for which they work. Comparable worth theory is concerned, not so much with whether individual jobs are under or over paid relative to their worth, but with whether there exist patterns of underpayment of jobs dominated by women and minority men. (Wittig, 1989) An organization�s commitment to comparable worth shows its commitment to fairness and dedication to the common good of its employees. I feel it is our duty, to see that all organizations come to realize their obligation to such standards of equality.
References
Ames, Linda J. (1995). Fixing women�s wages: The effectiveness of comparable worth policies. Industrial and Labor Relations Review, v. 48; p. 709-725.
Adams, Mark. Fair and Square. HR Magazine, v. 44 (5). May, 1999.
Gardner, Susan E. & Daniel, Christopher. (1998). Implementing comparable worth/pay equity: Experiences of cutting edge states. Public Personnel Management, v. 27(4); p. 475-489.
Leinwand, Donna. Pay gender gap is narrowing, but slowly: Women earn average 24% less than men, but employers say issue is complex. Detroit News. September 5, 1999.
Mann, Judy. Waiting for the equal pay ship to dock. The Washington Post. March 3, 1999.
Rhoads, Stephen E. (1994). Incomparable worth. Cited in The Futurist, v. 28; p. 59-60.
Taylor, Susan H. (1989). The case for comparable worth. Journal of Social Issues, v. 45(4); p. 23-37.
Weidenbaum, Murray. Admitting the gender pay-gap is narrowing. Christian Science Monitor. June 17, 1999.
Whaples, Robert. (1996). Is there consensus among American labor economists? Survey results on forty propositions. Journal of Labor Research, v. 1; p. 725-734.
Wittig, Michele A. (1989). Comparable worth theory and policy. Journal of Social Issues, v. 45 (4); p. 1-21.
