On the anniversary of the enactment of the Lilly Ledbetter Fair Pay Act (which apparently didn’t fix anything to hear progressives complain about it today) the President took up his pen and his phone again, signing another executive order. This one will mandate that companies above a certain size will need to report what they are paying everyone, broken down into the usual demographic pigeonholes. (Government Executive)
On Friday, the Obama administration announced executive action that would require companies with 100 employees or more to report to the federal government how much they pay their employees broken down by race, gender, and ethnicity. The proposed regulation is being jointly published by the U.S. Equal Employment Opportunity Commission and the Department of Labor. It is hoped that this transparency will help to root out discrimination and reduce the gender pay gap—which, according to the White House, leaves women in full-time jobs earning 79 cents for every dollar a man earns. Further, a report from theCouncil of Economic Advisers found that the gender wage gap in the U.S. is 2.5 percentage points larger than the average among industrialized countries…
In a press release regarding the proposed changes, the EEOC argues that “this new data will assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.” According to the EEOC, this data would point to which industry and occupations have the worst pay disparities. The compensation data would be an addition to employment information companies are already required to submit annually on race and gender—the EEOC says that the aggregate data would be published to help employers “facilitate voluntary compliance.” These requirements would begin in 2017.
You’ll note that this move doesn’t mandate that private companies immediately change their pay rates. (Not yet, anyway.) This order forces medium to large companies to begin reporting what they are paying to the government. That information will then be compiled and published to allow employers to “facilitate voluntary compliance” in providing equal pay. Of course, if business owners don’t manage the voluntary compliance part you can only imagine where things go next.
What’s never discussed in any of these debates is the definition of equal. If you hand some manager two resumes, one of which has the bare minimum educational experience and nothing else, while the other is Dean’s List material with summers spent interning for a company in the same industry and gaining real world experience, which one should they pay more? Or is the answer that both should get the same pay? And if the two applicants are of different races, gender or religion, is that supposed to be factored into the decision? We’re also not informed as to whether or not everyone should get the same raise every year no matter how they performed.
Of course, none of this takes into account the disparate factors we’ve previously discussed here, such as career choices. If you choose to find training which prepares you for a career in data entry and your friend studies heating and air conditioning, you’ll probably wind up making less money when you both find a job. Cost of living in different areas is also not taken into account. With all that in mind, what is this data collection and distribution supposed to accomplish? And aren’t we all personally responsible for negotiating the best deal we can manage when applying for a new job or asking for a raise? This looks like more political bread and circuses for the liberal masses than any type of serious reform effort.