On his first day in office, President Obama signed the Lilly Ledbetter Act. The administration coined it the “Equal Pay for Equal Work” bill.
However, the law does not give fair pay for equal work, but rather extends the period of time that women are able to file a claim of wage discrimination. With each new paycheck, the six-month time frame for filing a lawsuit resets. The bill passed with minimal Republican support.
The Republican members opposed the bill primarily because of how it affects employers — and therefore job creation — and on the belief that, as a result of the new legislation, gender discrimination — and hence, not hiring — in the workplace would likely increase because employers would fear lawsuits from female workers.
The Obama Administration cites the Department of Labor statistic that full-time working American women earn 77 cents for every dollar a man earns.
They claim this is the ‘wage gap.’ However, the statistic does not account for the number of hours per week women and men
work on average. To a considerable degree, the ‘gender wage gap’ is more a ‘gender hours gap.’
The Department of Labor considers full-time employment to be 35 or more hours per week. Men are more likely to work more hours, while women are more likely to work less than 35 hours per week. In 2009, 66.6 percent of American workers working less than 35-hour workweeks were women. In comparison, just 45.1 percent of workers logging more than 35 hours a week were men.
Adjusting for education, experience, race, industry and occupation, nine cents per hour was attributed to gender discrimination, according to Blau and Kahn’s “Perspectives,” and between five and seven cents per hour, according to Consad Research of Pittsburgh.
The wage gap depends on the labor-force participation rate by women, which is a function of a number of variables, both personal and societal.
In a study done by the University of Chicago of college-educated women who graduated between 1992 and 1993, only 25.6 percent were working 10 years later. Women are likely to opt out of the labor force in order to spend time with their children.
The Lilly Ledbetter Act provides a forum to air grievances that may or may not be related to wage differentials. However, it obscures the fact that differentials are due to choices. Even with Lilly Ledbetter, you would expect these differentials to continue and perhaps resolve a few individual claims.
However, it does not affect the decisions of women regarding labor-force participation.
As a piece of social legislation designed to improve women’s wages in comparison to men, the Lilly Ledbetter Act is more likely to result in fewer employed females because firms fear potential litigation, adverse publicity from such cases, and the amount of resources they would have to devote to defending themselves against such claims.