Assessing the Democrats: “Equal pay for equal work”?

After the Republican convention, I addressed Paul Ryan’s claims about the use of stimulus funds. In this post, I want to address many Democrats’ calls for “equal pay for equal work” for women in their convention speeches. In touting Obama’s accomplishments, Dems referred to the Lilly Ledbetter Fair Pay Act of 2009, Obama’s first major legislative feat.

First, let’s take a look at the latest statistics regarding the gender pay gap. According to a December 2011 report issued by the Bureau of Labor Statistics, women made up 47.2% of all employed workers in the US in 2010. They represented 54.9% of those employed in business and financial operations occupations, 64.2% of those employed in community and social services occupations, 73.8% of those employed in education and library occupations, and 74.3% of those employed in health care practitioner and technical occupations.

The median weekly salary for men over 25 in 2010 was $874, compared with $704 for women. The median male was earning 24% more than the median female. Below is a graph of median weekly salaries for men and women over 25 by educational attainment. At every level of education, the median male earns more than the median female. However, the wage differential is greatest at higher levels of education, particularly those with professional degrees. The median male whose highest level of education is a bachelor’s degree earned over 30% more than the median female with a bachelor’s degree, while the median male with a professional degree earned 38% more than the median female with a professional degree.

Yet the Lilly Ledbetter Act, though passed in the spirit of reducing the gender pay gap, does not directly address discrimination based on sex. Lilly Ledbetter, who also gave a speech at the Democratic convention, was an employee of Goodyear Tire & Rubber Company. After she retired from Goodyear in 1998, she sued the company for gender discrimination, citing the fact that she was earning significantly less than her male equivalents at the company. She claimed that she was denied the same pay raises as her male peers. The basis of her case was that her current retirement income was reduced because of previous acts of discrimination.

The district court ruled in her favor and awarded her back pay and damages, but an appellate court overturned this ruling. Goodyear made the case to the appellate court that her complaint of alleged discrimination was made outside the 180-day period specified by the Civil Rights Act of 1964. Ledbetter took her case to the Supreme Court, arguing that the pay discrimination was not a single event but a series of actions, and the Court should use a different rule for establishing when the 180-day clock starts. In May 2007, the Supreme Court ruled 5-4 in favor of Goodyear. Justice Alito in the majority opinion pointed to several instances where similar claims had been rejected because they were filed too late.

The next month, House Democrats put forth a bill which specified that discrimination occurs not just when the discriminatory choice is made by the employer, but also every time the individual is affected by the discriminatory decision, that is, every time the individual receives a paycheck. Republicans opposed the bill on the grounds that it would invite frivolous lawsuits against employers. The bill was re-introduced in the next legislative session, when Democrats had majorities in both chambers, and signed by President Obama on January 29, 2009. The Lilly Ledbetter Fair Pay Act legislatively overturned the Supreme Court’s 2007 decision, amending Title VII of the Civil Rights Act so that the 180-day time period starts each time the employee receives a paycheck which is affected by a discriminatory decision, instead of starting when the discriminatory pay decision was made.

A similar bill, the Paycheck Fairness Act, passed the House and stalled in the Senate in 2009, which would require greater transparency in pay decisions and make it easier for women to dispute pay which they believe is reduced as a result of gender discrimination, particularly by removing the time limit to file a complaint. The bill was re-introduced in both houses in April 2011 but has not passed either house. The bill has been criticized by Republicans and some Democrats for placing too great a burden on businesses and for making it more difficult for businesses to defend themselves.

The Lilly Ledbetter Act, in short, allowed women greater flexibility in filing complaints against employers for gender discrimination. It did not directly address the issue of equal pay, nor did it provide a method for identifying how pay decisions are made or whether they were discriminatory. Therefore, it seems misleading for Democrats to tout the legislation as achieving “equal pay for equal work” as many did at the convention. What is more important, though, is that the bill was passed with the goal of one day eliminating such discriminatory decisions and reaching full equality of pay. It is also clear that the Democratic party has made efforts towards this end, such as the more recent Paycheck Fairness Act, though it has not passed Congress.

Feel free to post with any comments or corrections!

–          Anthony

Fact-checking Paul Ryan’s speech

Here’s my first official post!

While many have been commenting on Clint Eastwood’s speech, I think we should go back to Wednesday night and take a look at Vice Presidential nominee Paul Ryan’s speech. Specifically, his claims about the stimulus package. What struck me most while watching the speeches at the Republican National Convention were the misinformed and misleading statements that were made, and instead of taking these claims at face value, we should question them. Congressman Ryan said:

“So here’s the question: Without a change in leadership, why would the next four years be any different from the last four years?

The first troubling sign came with the stimulus. It was President Obama’s first and best shot at fixing the economy, at a time when he got everything he wanted under one-party rule. It cost $831 billion – the largest one-time expenditure ever by our federal government.

It went to companies like Solyndra, with their gold-plated connections, subsidized jobs, and make-believe markets. The stimulus was a case of political patronage, corporate welfare, and cronyism at their worst. You, the working men and women of this country, were cut out of the deal.”

The White House put up a website in 2009, www.recovery.gov, “to foster greater accountability and transparency in the use of funds made available in [the American Recovery and Reinvestment Act of 2009].” The website does a clear breakdown of the $840 billion that has been spent with the goal of stimulating the economy.

Solyndra is a solar-panel maker which received a $535 million government loan, under a Department of Energy Loan Guarantee Program included in the ARRA, in September of 2009 and filed for bankruptcy in September of 2011. The Bush administration had been trying to get approval for a government loan to Solyndra since 2007, and the contract with Solyndra was the Obama administration’s first loan guarantee. As of June 2012, Solyndra is one of four stimulus-backed companies to declare bankruptcy, along with Beacon Power, Ener1, and Abound Solar.

Beacon Power received a $39.5 million loan guarantee and filed for bankruptcy in October 2011. Beacon Power used that loan to fund part of an energy storage facility, which was recently purchased by a private equity firm for $30.5 million. The money from this sale is expected to be returned to the Energy Department. Ener1, an electric car battery company, which previously received $10.5 million in grants under the Bush administration, received a $118 million grant from the Department of Energy as part of the stimulus, filed for bankruptcy in January 2012. Abound Solar was granted a $400 million loan from the Energy Department in July 2010, but an Energy Department spokeperson said that only $70 million was disbursed to the Abound after it had failed to meet some of the terms of its agreement. The company then filed for bankruptcy in July 2012.

The taxpayer dollars lost from the bankruptcy of these four companies total $1.06 billion. While this is a significant amount in absolute terms, it accounts for 0.1% of the overall stimulus package. So where did the rest of the stimulus money go, and were working men and women cut out of the deal? Below is a list of some (but not all) of the stimulus money that went directly back into the taxpayers’ pockets:

$131.8 billion – Individual Tax Credits

$104.4 billion – Making Work Pay Tax Credit

$61 billion – Unemployment Insurance

$35.4 billion – Food Stamps

$4.7 billion – Temporary Assistance for Needy Families

$13.2 billion – One-time checks for Social Security beneficiaries

$466 million – One-time checks for disabled veterans

These provisions total about $351 billion, which makes up about 40% of the overall stimulus package. While the rest of the federal stimulus went to investments, loans, grants, and job contracts, I find it a little misleading to say that returning $351 billion to the American people constitutes “cutting them out of the deal.” Now enough picking on the Republicans. I can’t say I expect 100% accuracy of statements that will be made at the Democratic National Convention next week in Charlotte, NC, either. So I expect we’ll have something to talk about next week as well.

– Anthony