Finkenauer Backs Pay Equality Bill That Could Do More Harm Than Good

Congresswoman Abby Finkenauer (D-Iowa) on Wednesday announced that she is an original co-sponsor of the Paycheck Fairness Act that was introduced into the U.S. House of Representatives. The bill (H.R. 7) sponsored by Congresswoman Rosa DeLauro (D-Connecticut) would mandate that employers not retaliate against employees who discuss their compensation.

Congresswoman Cindy Axne (D-Iowa) and Congressman Dave Loebsack (D-Iowa) are also co-sponsors of the bill.

The Paycheck Fairness Act, if passed, would also prevent employers from relying on a previous salary to set salary, a practice that Finkenauer says would lock a woman into a lower wage for her career.

Her press release states, “In Iowa, women—on average, make only 77 cents on the dollar that a man makes, meaning women and their families lose out on an average of $11,034 each year. Nationwide, women of color face even greater pay discrimination.”

“As a state legislator, I fought hard for equal pay. I’m proud to continue this fight for Iowa women and families in Congress,” Finkenauer said. “This is about doing what’s right and what’s fair, but it’s also about making sure Iowa’s hard-working families have the opportunities and economic security they need.”

The Misleading Gender Gap

Finkenauer, however, is relying upon a statistic that is misleading. The 23-cent gender pay gap in Iowa is the difference between the average earnings of all men and women working full-time.

The national wage gap according to the U.S. Census Bureau is 80.5 cents.

“The so-called ‘wage gap,’ which says that women make only 80 cents on the dollar compared to men, completely ignores all sorts of factors such as education, career choice, hours of work, and benefits that explain all but a few cents of that gap,” Rachel Greszler, a Research Fellow in Economics, Budget, and Entitlements at The Heritage Foundation, told Caffeinated Thoughts.

The wage gap is a stat that keeps cropping up in the debate over pay equality.

“When all these relevant factors are taken into consideration, the wage gap narrows to about five cents. And no one knows if the five cents is a result of discrimination or some other subtle, hard-to-measure difference between male and female workers,” Christina Hoff Summers wrote in a 2014 article for The Daily Beast.

Politifact.com called the gender wage gap as “mostly false.”

“The statistics showing that women earn 80 percent of what men earn are overall comparisons and do not specifically compare men and women occupying the same jobs,” Louis Jacobsen wrote.

Equal Pay for Equal Work Is Already the Law

“Equal pay for equal work is already the law of the land, and even if it weren’t, in today’s competitive worldwide economy, employers who discriminate based on gender will be the ones who pay for it through lower productivity and lower profits,” Greszler explained.

Greszler said that instead of increasing opportunities for women, the Paycheck Fairness Act backed by Finkenauer would set women back.

The bill “could claw back gains – such as more flexible works schedules – that women worked decades to achieve,” she noted.

“Uniform pay scales would require employers to implement uniform job duties and schedules, and that keeps a lot of women out of the labor force altogether. Moreover, the fear of bigger, more frequent, and more expensive lawsuits would likely cause employers to discriminate against women in the hiring process,” Greszler stated.

“Policymakers should care more about equality of opportunity and women’s choices than their paychecks. Unfortunately, by trying to force women’s pay to match that of men’s, policymakers could end up hurting a lot more women than they help,” she added.