August 20, 2004,
The trial lawyers' hunt continues. Fast-food purveyors like McDonald's and Wendy's are showcasing salads and low-carb sandwiches to avoid drawing their attention. Tobacco companies have submitted to a slow self-annihilation, funding commercials warning customers away from their products. And now the predators have scented new prey: big-box retailers.
Costco is the latest in the crosshairs. Just this week, lawyers filed a case on behalf of 650 female employees who allege that they were passed over for promotions and are paid less than their male co-workers. Wal-Mart is already battling a similar suit, filed on behalf of 1.6 million female employees who claim the retail giant is hiding an insidious policy of keeping women down.
As the lawyers for the plaintiffs offer evidence purporting to prove systematic gender bias at Costco and Wal-Mart, they will rehash many of the arguments that feminists have been making for years. For example, feminists consider the "wage gap" a disparity between men's and women's wages proof positive that women are paid less because they are women. And indeed, the Department of Labor reports the average full-time working woman earns about 75 percent of the average full-time working man's salary.
The National Committee on Pay Equity uses the 75 percent figure to calculate how many extra days women must work to reach "Equal Pay Day" it was April 20 in 2004 when women have finally earned as much as men for the preceding year. Posters decrying "75 cents on the dollar" are regular features at feminist rallies. Press accounts often begin with this number to highlight women's poor lot in American society.
But does the wage-gap statistic actually prove sex discrimination? No. First, as often is the case, this statistic ignores as much as it reveals. The 75 percent number trumpeted by feminists doesn't account for critical factors like education, occupational choice, or years of experience. On average, women leave the workforce for about a decade in order to care for children. It's no surprise that a 35-year-old woman re-entering the workforce after ten years off earns less than a man or woman who worked continuously during that time.
Several studies have attempted to use control groups to eliminate these differences. One focused on childless men and women aged 27 to 33 and found that women in that group earned 98 cents for every male dollar. Other studies, however such as a recent report by the General Accounting Office (GAO) concluded that after controlling for factors such as work experience, education, and occupation, a measurable gap remained, with women earning 80 cents for each man's dollar.
Yet the GAO cautioned against attributing this difference primarily to discrimination, concluding that "we cannot determine whether this remaining difference is due to discrimination or other factors that may affect earnings." "Some experts," the report noted, "say women trade off career advancement or higher earnings for a job that offers flexibility to manage work and family responsibilities."
Women reading this should consider how factors other than wages have influenced their own work choices. Even women currently without children often realize that they've built in future flexibility when deciding on a career or evaluating a specific job.
Proposals to close the wage gap like the "Fair Pay Act," sponsored by Sen. Patty Murray (D., Wash.) in 2001 would backfire on women by undercutting incentives for businesses to offer flexibility. The Fair Pay Act would require employers to report to the Equal Employment Opportunity Commission their processes for establishing wage rates. Businesses may fear explaining that a female employee traded a cut in salary for the ability to leave every day at 4 p.m. or work from home when her child is sick. Those options might simply vanish hardly a victory for women.
Discrimination certainly factors into the careers of some women and no doubt some Costco and Wal-mart employees may have stories of truly unfair treatment from their managers. Yet in the coming months, as trial lawyers make a case against Costco and Wal-mart, Americans need to recognize that a statistical difference in pay isn't smoking-gun evidence of discrimination. It can be the result of individuals' acting in their own self-interest which is usually a good thing, except perhaps when those individuals are trial lawyers.
Carrie Lukas is the director of policy at the Independent Women's Forum.