Obama’s Orders Aim to Spot Wage Disparity and Eliminate the Pay Gap

Since 1965 it’s been illegal to pay women less than men for doing the same work. Yet the pay gap persists. On Tuesday, President Obama is scheduled to sign two executive actions to try to cut down the enduring disparity by making it easier to spot where pay may be unequal. Lack of information is “one of the biggest reasons that wage discrimination has been difficult to identify and enforce against,” says labor economist Marc Bendick.

Bendick, part of a nonpartisan expert panel on wage discrimination assembled by the National Academy of Sciences, says even though Obama’s orders will only directly affect employees of federal contractors, the changes amount to more than just tinkering around the edges. Because so many people work for contractors, “you’re talking about immediately covering about 23 percent of the workforce,” he says. The impact could be broader, because rules for federal contractors often create an “echo effect” over entire industries. (Congressional action would be required to make the changes universal.)

The two executive actions target well-known obstacles to identifying wage disparity. The first would prohibit employers from retaliating against workers for violating so-called gag rules that prevent them from discussing their pay with one another. “You hear the same anecdote over and over,” Bendick says, “that some woman, by accident, finds out what a male peer is making and is shocked.” He says letting employees share their wages one-on-one will allow workers to discover whether they’re possibly being shortchanged. Complaints about retaliation are the largest and fastest-growing category of claims filed with the Equal Employment Opportunity Commission, according to Bendick, “so specifically going at the issue of retaliation is highly responsive to the nature of discrimination.”

The second action, technically an executive memo, would direct the Department of Labor to make rules requiring federal contractors to report how much they pay workers of different races and gender. Currently the EEOC collects demographic data on an employer’s workforce, split into nine specific job categories, but the commission doesn’t require reporting of workers’ salaries. Bendick says that’s a relic of the 1960s, when the reporting laws were first enacted to prevent discrimination that blocked women and minorities from working in certain fields at all. Some types of jobs continue to be gender- or race-imbalanced, but pay disparity has become a more prominent issue, he says.

Employers have resisted efforts to report wage data in the past, saying the process would be burdensome. Bendick says the National Academy of Sciences panel found that wouldn’t be the case, because employers already are required to track workers by demographics, and payroll processing firms have found that they could easily update their systems to produce the reports. For example, a similar effort to collect wage data in New Mexico faced few complaints. Nevertheless, Bendick believes the new executive order could help further negate the counterargument. “Starting with federal contractors will demonstrate, among other things, that the administrative burdens are practically zero,” he says.

One big question hangs over all of this, Bendick says: Why would more data collection require an executive action? The Department of Labor already started the rule-making process on the topic in 2011, but it never actually proposed the rules. During the 2012 election, despite a so-so record on equal pay, Obama campaigned on the issue, enlisting Lilly Ledbetter to join him on the campaign trail. With the 2014 midterm elections around the corner, the president is reviving the topic once again. Ledbetter is scheduled to join the president at Tuesday’s signing ceremony.

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