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Archive for the ‘equal pay’ Category

Fair Pay Act Would Bring Equal Pay for Equal Work

Wednesday, April 13th, 2011

Image: Mike HallYesterday, equal rights advocates marked Equal Pay Day to remind the nation that women are paid  just 80 cents for every dollar men earn, Sen. Tom Harkin (D-Iowa) introduced the Fair Pay Act of 2011 that would ensure that employers provide equal pay for jobs that are equivalent in skill, effort, responsibility and working conditions.

Harkin says that discrimination accounts for much of the pay gap and there are too many loopholes and barriers to effective enforcement of existing laws. “We need to strengthen penalties and give women the tools they need to confront discrimination.”

At the same time, we must recognize that the problem of unequal pay goes beyond insidious discrimination. As a nation, we unjustly devalue jobs traditionally performed by women, even when they require comparable skills to jobs traditionally performed by men.

Millions of jobs dominated by women such as social workers, teachers, child care workers and nurses are equivalent in skills, effort, responsibility and working conditions to similar jobs dominated by men says Harkin:

But the female-dominated jobs pay significantly less. This is inexplicable. Why is a housekeeper worth less than a janitor? Why is a parking meter reader worth less than an electrical meter reader? Why is a social worker worth less than a probation officer?

Commentator Debbie Hines writes on OpEdNews.com today:

Women’s salaries are outpaced by men almost everywhere from the highest paying occupation to the lowest paying occupations. Everywhere from doctors and lawyers to cashiers and lesser positions, women earn less than their male counterparts.

The Fair Pay Act would also require employers to publicly disclose their job categories and their pay scales, without requiring specific information on individual workers. Under current law women who believe they are the victim of pay discrimination must file a lawsuit and endure a drawn-out legal discovery process to find out whether they make less than the man working beside them.

It took Lilly Ledbetter nearly 20 years before she discovered she was being paid less than men doing the same job and was able to file suit. After the U.S. Supreme Court ruled against her in 2007, Congress passed the Lilly Ledbetter Fair Pay Act that helps level the playing field for victims of wage discrimination that President Obama signed in 2009. Says Harkin:

On this Equal Pay Day, let us make sure that what happened to Lilly never happens again by recommitting to eliminate discrimination in the workplace and make equal pay for equal work a reality

Click here for more information on the Fair Pay Act.

About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He came to the AFL- CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety. When his collar was still blue, he carried union cards from the Oil, Chemical and Atomic Workers, American Flint Glass Workers and Teamsters for jobs in a chemical plant, a mining equipment manufacturing plant and a warehouse. He has also worked as roadie for a small-time country-rock band, sold his blood plasma and played an occasional game of poker to help pay the rent.

This blog originally appeared in AFL-CIO on April 12, 2011. Reprinted with Permission.

Join March 29 Rally to Support Wal-Mart Women

Tuesday, March 29th, 2011

Image: James ParksHundreds of people will show their support outside the U.S. Supreme Court Tuesday, when the High Court hears oral arguments in what could become the largest class-action civil rights suit in U.S. history.

The Stand with the Women of Wal-Mart rally will take place as the nation’s highest court hears arguments on Wal-Mart v. Dukes to decide whether the case can move forward as a class action.

Ten years ago, a group of women who worked at Wal-Mart stores, led by Betty Dukes, filed a lawsuit alleging the corporation engaged in company-wide gender discrimination by paying women less than men, promoting fewer women to management positions and promoting male employees more quickly. The case, now a class action, has made its way to the Supreme Court.

Wal-Mart is challenging the decision by a lower court to allow the women employed at Wal-Mart stores across the country to join together in a class action lawsuit to challenge pay and promotion practices that discriminate against women.

If Wal-Mart succeeds in keeping these women from joining together, the already uphill battle for women to fight pay discrimination will get even worse. But If the women prevail, their case will become the largest class-action civil rights suit in the nation’s history, with some 1.6 million female Wal-Mart and Sam’s Club employees.

A coalition of women’s, workers’ and religious groups are sponsoring the rally, including the AFL-CIO constituency group, the Coalition of Labor Union Women (CLUW).

In a statement, the American Association of University Women (AAUW), another rally sponsor, says class action can send a strong message to employers to follow the law in the first place. Lisa Maatz, AAUW’s director of public policy and government relations, says:

This case illuminates the dirty little secret that women know all too well — that pay discrimination is alive and well and undermining the economic security of American families.

About the Author: James Parks’ first encounter with unions was at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and has worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He also has been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections.

This blog originally appeared in ALFCIO on March 28, 2011. Reprinted with Permission.

Warehouse Workers Allege Wage Theft, Demand Pay Stubs

Monday, February 28th, 2011

kari-lydersenEmployees will march into Reliable Staffing office to demand billing records, highlight mistreatment

When Reginald Burnett started working in a warehouse unloading trucks of goods destined for Wal-Mart, he said he was told he’d make at least $10 an hour. But he soon realized that figure hinged on unloading a truck in three hours. Depending on how many things are in a truck and how heavy and unwieldy they are, unloading a truck can take two days.

Burnett, 32, soon found himself working 12-hour days, seven days a week, and taking home only $90-100 a day – less than $9 an hour, not counting copious overtime to which he should have been entitled under the law. He said he wasn’t the only one who realized his Friday paycheck from the agency Reliable Staffing “didn’t add up.”

Burnett is among workers who think they are victims of wage theft by the New Lenox, Ill., staffing agency. Reliable Staffing workers have contacted the group Warehouse Workers for Justice, which is trying to shed light on alleged wage and hour violations, unhealthy working conditions, extensive use of temporary labor and other unsettling aspects of the massive warehouse industry in Chicago’s southwest suburbs.

Today Burnett and other former or current Reliable Staffing workers and their supporters are marching into the company demanding copies of their pay stubs and billing records, to highlight what many workers say is erratic, deceptive or non-existent recordkeeping and transparency by the agencies that hire workers to staff warehouses for major multinational companies like Wal-Mart.

“It was everything that goes to Wal-Mart, from BBQ grills to tables to different types of book folders,” said Burnett. “A lot of it was heavy.”

George Johnson is among the former Reliable Staffing workers who never got straight answers about how much he was being paid. He said he was promised $9.25 an hour, but he said he sometimes got as little as $15 for a full eight-hour day during his three months at the company, paid piecemeal for unloading trucks, splitting pay with one or two other workers unloading the same truck. He said he was also told to report to the warehouse at 7 a.m., but wouldn’t start working until 8:30 a.m. or 9 a.m., without being paid for the waiting time.

“It was all screwed up,” said Johnson, 41, who struggled to support eight kids on the meager wages. “You spent all these hours working, unloading these big trucks, one after another after another. For nothing.”

Warehouse Workers for Justice, a campaign launched several years ago by the United Electrical Radio and Machine Workers of America (UE), last year released the study Bad Jobs in Good Movement: Warehouse Work in Will County that showed:

63 percent of warehouse workers were temps and that majority were earning below the poverty line…and one in four warehouse workers needed public assistance and many workers needed a second job in order to make ends meet.

Both Johnson and Burnett were temporary workers, and Johnson since then worked another temporary warehouse job. Burnett has been collecting unemployment since being laid off after about seven months, when his contract ended.

“When they want that order, they’ll say ‘that truck is hot,’” he said. “There are people waiting on the order, they need to complete it right away to get their money, so they make you work harder. But they don’t share the money with you. They are making big money, I kid you not.”

Warehouse Workers for Justice organizers have been meeting with Illinois state legislators to introduce legislation that would limit the number of temporary jobs in the industry, among other workers’ rights protections.
“People deserve permanent jobs,” said Tory Moore, a WWJ organizer who worked at the same warehouse for six years as a temp.

Burnett said he hopes more workers speak up about wage theft and other problems. He said many of the people working for Reliable Staffing have criminal records, something he thinks the company banked on.

“The job is so God-damned hard, most people they hire have felonies, they know most people won’t hire someone with a felony, so they know he’ll put up with it because he’ll have a hard time doing anything else,” Burnett said.

They are trying to prove to society that they’re capable of handling this kind of thing. Making their own money feels good, especially someone who came from the street, who never had anything in their lifetime. Now they don’t have to look over their shoulder, over their back, look out for the police.

They’re going to hold on to that job as long as they can. The people know they’re being cheated, but they don’t want to speak up because if you speak up, you lose your job.

About the Author: Kari Lydersen is an In These Times contributing editor, is a Chicago-based journalist whose works has appeared in The New York Times, the Washington Post, the Chicago Reader and The Progressive, among other publications. Her most recent book is Revolt on Goose Island. In 2011, she was awarded a Studs Terkel Community Media Award for her work. She can be reached at kari.lydersen@gmail.com.

This post originally appeared in http://www.inthesetimes.com on February 21, 2011.

Employee Rights Short Takes: New Evidence Of Gender Pay Gap, Race Discrimination, Disability Discrimination And More

Friday, October 1st, 2010

ellen simonHere are a few short takes about employment discrimination stories that made the news this past week:

New Evidence Of Gender Pay Gap And Discrimination Against Mothers In Management

Women made little progress in climbing into management positions according to a new report by the Government Accountability Office yesterday.

As of 2007, the last year for which the data was available, women made up only 40% of managers in the United States work force compared to 39% in 2000. In all but 13 industries covered by the report, women had a significantly smaller share of management positions than men when compared to the overall workforce.

In addition, managers who were mothers earned 79 cents of every dollar paid to managers who were fathers.

The report was prepared at the request of Representative Carolyn Maloney, Democrat of New York, and chairwoman of the Joint Economic Committee for a hearing before that committee on Tuesday — where witnesses  talked about the  “shockingly slow rate of progress” for women in corporate management positions and the “motherhood wage penalty.”

Several individuals who testified urged the passage of the Paycheck Fairness Act as a partial remedy to the issues surrounding gender discrimination in the workforce.

For more about the report read the NY Times article here. For a copy of the report from Rep. Maloney’s website and more about the hearing read and watch here.

Employee With Multiple Sclerosis Settles Discrimination Case For $1.2 Million

An ex-employee of the Madison New Jersey Board of Education with multiple sclerosis settled her disability discrimination case for $1,200,000, including attorney fees, as reported yesterday by DailyRecord.com and Lawyers USA. Disability discrimination is prohibited by the Americans with Disabilities Act.

Joan Briel, a former accounts payable secretary, was diagnosed with MS in 2002. She claimed that her employer retaliated against her by inappropriately increasing her workload, repeatedly harassing her and failing to take action on her requests for reasonable accommodation — including her request to work on the first floor instead of the third floor.

Briel also claimed that the stress of the work environment caused her to relapse and that she was fired while she was on medical leave.

The case was heading for a jury trial when the settlement was reached. Ms. Briel will receive $412,000 in the settlement. Her attorneys will receive $877,303 for the work they did on the case. The court also awarded Briel over $43,000 in costs.

Plaintiffs in civil rights cases may recover attorneys’ fees – if they prevail — in addition to their individual award in most cases. These legal provisions are intended to encourage attorneys to represent individuals who are unable to invoke the protection of civil rights laws because they can not afford a lawyer.

Discrimination cases are difficult to litigate and are often complex and protracted. Therefore, it’s not unusual for the attorneys’ fees ( on both sides) to be larger than the award, or greater than the amount in controversy.

This newly reported case is but one example of the potentially high costs to employers when employment discrimination cases are not resolved early.

EEOC Settles Race Discrimination And Retaliation Case For $400,000

The Cleveland office of the EEOC announced a $400,000 settlement of a class action race discrimination and retaliation case against Mineral Met Inc., a division of Chemalloy Company.

Evidence in the case showed that black employees were disciplined for trivial matters – such as having facial hair or using a cell phone — while white employees were not disciplined for the same conduct. When one of the supervisors complained, it resulted in intensified racially discriminatory treatment and retaliation according to the EEOC.

The EEOC also charged that African-American employees were also subjected to other forms of racial harassment, including evidence that a white supervisor placed a hangman’s noose on a piece of machinery. (once again shocking that this is still going on)

Race discrimination in employment and retaliation for complaining about discrimination violate Title VII of the Civil Rights Act of 1964.

This article was originally posted on Employee Rights Blog.

About the Author: Ellen Simon: is recognized as one of the leading  employment and civil rights lawyers in the United States.She offers legal advice to individuals on employment rights, age/gender/race and disability discrimination, retaliation and sexual harassment. With a unique grasp of the issues, Ellen’s a sought-after legal analyst who discusses high-profile civil cases, employment discrimination and woman’s issues. Her blog, Employee Rights Post has dedicated readers who turn to Ellen for her advice and opinion. For more information go to www.ellensimon.net.

On 47th Anniversary, the Equal Pay Act Must Finally Live Up to its Name

Wednesday, June 16th, 2010

Image: Linda MericImagine for a moment that you work in a department with three employees: one African-American, one Caucasian and one Latina. One day, someone new is hired.

Imagine discovering that this new hire is to be paid much more than any of you; even more than the Latina, who has been employed there for 14 years. Imagine your outrage; especially since the only difference is that all of you are women — and the new hire is a man.

This story, from a Denver woman who now works in the financial industry, might be shocking to those of us who believe in equity and fairness, but it’s not unique.

All over this country, similar stories play out, most anonymous and a few now famous — like that of Lilly Ledbetter, who worked 20 years at a Goodyear plant in Alabama before learning that the men who performed the same job as she had been earning more all along.

It’s time that pay discrimination end and the pay gap close in this country — and there is something we all can do about it right now! Push the U.S. Senate to pass the Paycheck Fairness Act.

On average, women earn about 77 cents for every dollar earned by men. For women of color, African American women and Latinas, the gap is even wider. Men of color experience a pay gap, too, compared to white men. Some don’t like to talk about it; some even refuse to believe it. Some think we got past this kind of blatant discrimination long ago.

Forty-seven years ago, when President John F. Kennedy signed the Equal Pay Act into law, women’s rights activists celebrated. After years of effort, finally there was a law that prohibited women from being paid less than men for doing the exact same jobs.

Women finally had some equality in their paychecks — at least by law. When the Equal Pay Act passed, women earned, on average, 60 cents for every dollar earned by men. In the forty-seven years that have passed, the pay gap has closed by less than less than 20 cents.

Now, we have a chance to make further progress to close the pay gap: the Paycheck Fairness Act.

A desperately needed update to the Equal Pay Act of 1963, the Paycheck Fairness Act (S. 182) would close loopholes, strengthen business incentives to end pay discrimination, prohibit retaliation against workers who share wage information, and bring the Equal Pay Act in line with other civil rights laws.

The Paycheck Fairness Act has passed in the House of Representatives. President Barack Obama is ready to sign it into law. But it’s bottlenecked in the U. S. Senate. If it doesn’t move forward this year, we’ll have to start all over again.

Meanwhile, paying women less affects not only us and our families, but our communities and even our nation because it means we have less to spend on rent and mortgage payments, medical care, taxes, retirement savings and other basic necessities.

Women can’t afford to lose another penny. Our nation can’t afford to wait another year.

Speak out now. Encourage the Senate to pass this much needed update so that the Equal Pay Act of 1963 can finally start to live up to its name.

Help us support the Paycheck Fairness Act by contacting your Congressman and urging their voice behind the bill.

About The Author: Linda Meric is Executive Director of 9to5, National Association of Working Women, an inclusive multi-racial membership-based organization founded in 1973 to strengthen the ability of low-income women to win economic justice through grassroots organizing and policy advocacy. Linda has spent more than 30 years as a labor and community organizer. She also serves as an adjunct professor specializing in sexual harassment and other workplace issues.

It’s Equal Pay Day And Time To Pass The Paycheck Fairness Act

Wednesday, April 21st, 2010

Wage Discrimination Needs Attention And A Legislative Fix

April 20, 2010 is Equal Pay Day. It was established in 1996 to illuminate the gap between men’s and women’s wages. The date symbolizes how far into 2010 women must work to earn what men earned in 2009.

This year, with the support of President Obama, Equal Pay Day should also bring attention to pending legislation intended to address lingering issues of pay disparity in the American workforce.

Here are some facts about pay equity from the National Organization for Women:

  • In 2007, women’s median annual paychecks reflected only 78 cents for every $1.00 earned by men. Specifically for women of color, the gap is even wider: In comparison to a man’s dollar, African American women earn only 69 cents and Latinas just 59 cents. 
  • In 1963, when the Equal Pay Act was passed, full-time working women were paid 59 cents on average for every dollar paid to men. This means it took 44 years for the wage gap to close just 19 cents — a rate of less than half a penny a year.
  • The narrowing of this gap has slowed down over the last six years, with women gaining a mere two cents since 2001.
  • Women’s median pay was less than men’s in each and every one of the 20 industries and 25 occupation groups surveyed by the U.S. Census Bureau in 2007. Even men working in female-dominated occupations earn more than women working in those same occupations.
  • According to the Institute for Women’s Policy Research,  if equal pay for women were instituted immediately, across the board, it would result in an annual $319 billion gain nationally for women and their families (in 2008 dollars).
  • When The WAGE Project looked exclusively at full-time workers, they estimated that women with a high school diploma lose as much as $700,000 over a lifetime of work, women with a college degree lose $1.2 million and professional school graduates may lose up to $2 million because of pay disparity.
  • As a result, these inequities follow women into their retirement years, reducing their Social Security benefits, pensions, savings and other financial resources.
  • A study by the American Association of University Women examined how the wage gap affects college graduates. Wage disparities kick in shortly after college graduation, when women and men should, absent discrimination, be on a level playing field.
  • One year after graduating college, women are paid on average only 80 percent of their male counterparts’ wages, and during the next 10 years, women’s wages fall even further behind, dropping to only 69 percent of men’s earnings ten years after college

I have represented women in discrimination cases for many years.  From my vantage point it’s clear that while the pay equity issues are not as blatant as they once were, wage discrimination is still a prevalent concern for women of all socio-economic groups.

It’s also true that the Equal Pay Act of 1963, while well intentioned, has not come close to fulfilling its goal due to a whole host of reasons.

The good news is that there is a bill pending in Congress aimed at correcting unlawful wage disparities and which offers a legislative fix for some of the problems with the Equal Pay Act.

The Paycheck Fairness Act (H.R.12 and S.182) was introduced January 2009 by then-Senator Hillary Clinton and Rep. Rosa DeLauro to strengthen the Equal Pay Act of 1963. The bill expands damages under the Equal Pay Act and amends its very broad fourth affirmative defense which will be a real help to victims of pay discrimination.

The Paycheck Fairness Act also prohibits retaliation against inquiring about or disclosing wage information  and proposes voluntary EEOC guidelines to show employers how to evaluate jobs with the goal of eliminating unfair disparities. The bill was passed by the House in January of 2009 and is pending in the Senate. It’s lead sponsor is Sen. Christopher Dodd.

There were hearings about the bill in March of this year with lots of illuminating testimony, including the remarks of Stuart Ishimaru, acting Chariman of the EEOC, which you can read here if you are interested in more detail about the subject.

The bottom line is if you care about equal rights for women and want to make a difference, please call or write your Senator and urge passage of the Paycheck Fairness Act. Here’s a link that will help you send the message. We know that the President  supports it — we just need to get it on his desk.

images: www.evetahmincioglu.com

*This post originally appeared in Employee Rights Post on April 20, 2010. Reprinted with permission from the author.

About the Author: Ellen Simon: is recognized as one of the leading  employment and civil rights lawyers in the United States.She offers legal advice to individuals on employment rights, age/gender/race and disability discrimination, retaliation and sexual harassment. With a unique grasp of the issues, Ellen’s a sought-after legal analyst who discusses high-profile civil cases, employment discrimination and woman’s issues. Her blog, Employee Rights Post has dedicated readers who turn to Ellen for her advice and opinion. For more information go to www.ellensimon.net.

A Year After Ledbetter – What’s Next for Fair Pay for Women?

Tuesday, February 2nd, 2010

One year ago, Obama signed the Lilly Ledbetter Fair Pay Act into law, ensuring that workers can go to court to protest pay discrimination. Now it’s time for the next step.

For almost twenty years, I got paid less than my co-workers. I was a woman doing the same work as the men on my team — and apparently, my gender was all the excuse my employers at a Goodyear tire plant needed to cut my paychecks. My salary was far lower, and I got lower raises – over and over again.

But one year ago today, to my amazement, the President signed the Lilly Ledbetter Fair Pay Act into law, which restored the law to make sure workers can go to court to protest pay discrimination.

And now it’s time for the next step. The right to go to court is important, but it isn’t enough. We need to do more to keep women from being discriminated against in the first place.

We need to pass the Paycheck Fairness Act. This bill gives teeth to the protections against pay discrimination. And women, who are still shortchanged in the workplace, deserve just that. The bill would empower women to negotiate for equal pay, create stronger incentives for employers to follow the law, and strengthen federal outreach and enforcement efforts. It would also strengthen penalties for equal pay violations.

But from where I sit, one of the most important aspects of the Paycheck Fairness Act is a provision that would prohibit retaliation against workers who ask about employers’ wage practices or disclose their own wages to co-workers. This would have been particularly helpful to me, because Goodyear prohibited my colleagues and me from talking about our wages. This policy delayed my discovery of the pay inequities between my male counterparts and me by — literally — decades.

For the past year, I’ve been speaking out to build up support of this bill, with the help of my friends at the National Women’s Law Center.

The bill has already passed the House, and now it’s up to the Senate. It is time to improve the law, not just restore it. You can count on my continued commitment to passing this Act and to ensuring that women will some day, as the President called for in his State of the Union, truly have equal pay for equal work.

About the Author: Lilly Ledbetter is a volunteer and mother of two. She resides in Jacksonville, Alabama.

Bringing Overpaid Executives to Heel

Wednesday, January 6th, 2010
Photo by Martin Gardlin

Photo by Martin Gardlin

A recent Time magazine poll found that 71% of Americans who responded want the government to place limits on the executive compensation at firms that received bailout money. Yet accomplishing this task selectively is impossible to do.

The government did appoint a czar of executive compensation for these corporations, but he approved a $7-million salary/$3.5-million bonus plan for the head of AIG, 80% of which is now owned by taxpayers. Few workers, executives included, would agree to work for less than the going rate. Executives are simply used to earning millions of dollars, and there is little that either the czar or shareholders can do about it unless Congress limits all executive compensation. But the chance of such legislation passing is slim.

Why is limiting executive compensation so difficult? Because executives have a seemingly unassailable argument — market forces — that University of Chicago professor Steven Kaplan defended in an October debate: “Market forces govern CEO compensation. CEOs are paid what they are worth.”

Of course, market forces are cited not only to justify outsized compensation for executives but also poverty wages for workers. Textbooks claim that minimum wage laws and union wages create unemployment. Just what are these market forces, and should we let them determine executive compensation and wages?

When British economists David Ricardo and Adam Smith examined this question 200 years ago, they concluded that what a person earns is determined not by what the person has produced but by that person’s bargaining power. Why? Because production is typically carried out by teams of workers, managers and machines, and the contribution of each member cannot be separated from that of the rest. A driver and a bus, for example, generate $100,000 of income a year. The driver is paid $25,000. Is this because the driver had transported 10 of the passengers without the bus while the bus had transported 30 of the passengers without the driver? The driver’s pay is so small only because the driver is so weak at the bargaining table.

It was Smith who explained that the bargaining power of each party is determined by the laws that the government passes and the way that it enforces them, and that, as a rule, the government sides with employers against employees. He was particularly concerned with anti-unionization laws. Had he witnessed the largesse that boards of directors are permitted to offer executives, and the government’s behavior toward executives in the current crisis, he probably would have added that the government also sides with executives against shareholders and taxpayers.

Despite the logic of Ricardo and Smith’s explanation that it is power, not productivity, that determines what people earn, the notion that people earn what they “deserve” persists. It dates to the Haymarket riot of 1886 in Chicago — in which police and labor protesters clashed and several policemen and demonstrators were killed — and the labor unrest that followed. Concerned about this unrest, John Bates Clark, a Columbia University professor, warned in an 1899 book: “The indictment that hangs over society is that of ‘exploiting labor.’ If this charge were proved, every right-minded man should become a socialist.”

It was thus with a clear political agenda that Clark took it upon himself to prove that the charge of exploitation of workers was dead wrong. Clark’s “proof” was to ignore the fact that production is carried out by teams and that individual contributions cannot be measured. He simply declared that the contribution of each individual worker and each machine could be measured, and that the earnings of either workers and executives or machines are simply the values of these contributions.

In this view, if the government were to raise wages by law, employers would have no choice but to fire workers, because no employer can pay out more than the worker puts in. And if the government were to set limits on executive compensation, the bright and the talented would choose to work less or limit the level of their performance.

Evidence that Clark’s theory is wrong — that production is carried out by teams and that astronomical compensation is not a requirement for good performance — can be found everywhere. In 1941, Wassily Leontief, a Nobel Prize-winning economist, tried to alert economists to the fallacy of Clark’s theory. But Leontief, like Ricardo and Smith, was ignored. And Clark’s tale that earnings are determined by productivity alone is still being taught around the globe.

Corporate executives take a different approach: picking the argument that suits them. When it comes to their workers’ wages, Clark’s theory rules: The wage of each worker is equal to the value of his or her product, and raising wages will cause unemployment. When it comes to the executives’ own compensation, however, they hide behind the idea that an individual’s contribution can’t be measured. So even when the corporations they run lose big and their stocks decline, they still collect millions in pay. Executive compensation is now so large that executives’ work effort no longer has any relation to the level of their compensation.

Adam Smith got it right: The remedy for the rule of power is the rule of law. We need new laws to check the unfair distribution of the fruits of our labor. One such law could set a maximum ratio at any given company between the highest executive compensation and the lowest worker’s wage. Another could set a minimum ratio for the division of income between labor and shareholders. Still another could raise the minimum wage and tie it to the median wage, which would make the minimum wage a consistent living wage.

Overpaid executives take more than their fair share and leave too little for the rest of us, threatening our health — and that of society.

Moshe Adler teaches economics at Columbia University and is the author of “Economics for the Rest of Us: Debunking the Science That Makes Life Dismal.”

*This article originally appeared in The L.A. Times on January 4, 2009. Reprinted with permission from the author.

Image: Economics for the Rest of UsAbout the Author: Moshe Adler teaches economics in the department of urban planning at Columbia University and is the author of the just published book: “Economics for the Rest of Us: Debunking the Science that Makes Life Dismal.”

Lily Ledbetter’s Fair Pay Fight Continues

Thursday, July 9th, 2009

In a recent Letter to the Editor in the New York Times, Lilly Ledbetter reminded all of us that Congress still has some unfinished business when it comes to ensuring fair pay for women. Specifically, she mentioned the importance of passing the Paycheck Fairness Act – a bill that aims to strengthen current laws against wage discrimination and provides tools to enable the federal government more proactively address it.

It’s an unfortunate reality that pay discrimination persists nearly half a century after the Equal Pay Act outlawed the practice. When women aren’t paid what they are owed, they suffer and so do their families – in income, benefits and retirement security.

Lilly’s determination and fortitude is an inspiration for all of us to continue fighting for pay equity. As Lilly herself has said so many times before, this fight is about ensuring that our daughters and granddaughters will get a better deal. She has traveled far and wide to spread this message, and to make sure no one forgets that women are still falling 22 cents short of equality (http://www.nwlc.org/fairpay/statefacts.html)

 
Fatima Goss Graves: Fatima Goss Graves is Senior Counsel for Education and Employment at the National Women’s Law Center. She focuses on gender equity in education, including the advancement of women and girls in fields that are nontraditional for their gender, affirmative action, sexual harassment and athletics. Prior to joining NWLC, she worked as an appellate and trial litigator at Mayer, Brown, Rowe, & Maw LLP. She began her career as a law clerk on the U.S. Court of Appeals for the Seventh Circuit. She is a graduate of Yale Law School and the University of California at Los Angeles.

Women of the World Unite, All We Have to Win Is 22 cents

Tuesday, April 28th, 2009

Today is Pay Equity Day. The National Committee on Pay Equity came up with the idea in the mid-1990s to acknowledge a day in April to remind us that it takes women a full year PLUS an extra four months of earning a salary (or a total of 16 months) to equal the amount male colleagues net in just one calendar year (12 months). That is what it means when you hear the statistic that women who work full time earn about 78 cents for every dollar men earn (See U.S. Census Bureau and the Bureau of Labor Statistics). Minority women are subject to a far greater wage gap.

Not mad yet? Those twenty-two cents add up. The Center for American Progress reports that women who work year-round earn less than men in comparable jobs and at all educational levels. The wage gap increases over a woman’s lifetime and adds up to $434,000 over a 40-year career for the typical woman. A woman with a bachelor’s degree or higher can lose more than $713,000 (See Center for American Progress, “Wage Gap by the Numbers“).

“Well,” you’re thinking, “that sounds pretty bad, but this is someone else’s problem; surely I am not being paid less than my male colleagues!” Think again. The statistics say otherwise. The gender wage gap is documented in all 50 states and is at a national average rate of 78 percent (Source: National Women’s Law Center’s calculations from the U.S. Census Bureau, Income, Earnings and Poverty Data from the 2007 American Community Survey (August 2008). You do the math – chances are, if you are a woman in the workforce, it is highly likely that you are earning less than had you been a man.

If you are a man reading this, then it should trouble you that the gender wage gap is harming your wife, sister, mother, daughter, friends and colleagues. According to the AFL-CIO, working families lose $200 BILLION every year due to the wage gap! Your women are bringing home less bacon than they should be, and it is affecting everyone’s bottom line.

Or think of it another way: the current recession is especially hitting male-dominated industries, such as construction and manufacturing. Four out of every five jobs being lost in this recession affect men. Women are becoming the main breadwinner, but, on average, make up only one-third of a family’s income. Prolonged, systemic pay inequity will further hurt families who have lost the earnings of the male breadwinner and must solely depend on the woman’s wages, to say nothing of single mothers who struggle year in and year out independent of economic downturns.

In honor of Pay Equity Day, it is reasonable and even encouraged to express your well-earned outrage. There are a number of legislative efforts seeking to close the wage gaps between men and women, and minorities as well. A number of organizations’ web sites today will detail current and soon-to-be-introduced legislation to close loopholes, enhance provisions under the Equal Pay Act, and prohibit employer retaliation against workers who inquire about employers’ wage practices. I encourage you watch one of the more amusing Equal Pay legislation videos out from the Center for American Progress. Check out EQUAL PAY: Batgirl vs Chamber of Commerce.

Fixing this issue legislatively is one important approach, but cannot be achieved exclusively in this manner. If you have any doubts, consider that it was President Kennedy who signed the Equal Pay Act into law more than forty-five years ago. If Kennedy’s challenge to land a man on the moon were as successful as the Equal Pay Act, Neil Armstrong’s ‘giant leap for mankind’ would have been referring to a cool telescope.

The most direct, proven tool to combat pay inequity are unions. According to AFL-CIO compiled data from the Bureau of Labor Statistics for 2008, on average, unionization raised women’s wages by 32% compared to non-union women. A study by the Center for Economic and Policy Research found that for the years 2004 – 2007, unionized women were much more likely to have health insurance (75.4%) and a pension (75.8%) than women workers who were not in unions (50.9% for health insurance, 43% for pensions.) In real dollar terms – the average unionized woman working full-time earns a weekly salary of $809 per week vs. the $615 a non-unionized woman will earn.

The same business groups, such as the Chamber of Commerce, who fought against the Ledbetter Fair Pay Act, which restores the right of victims of pay discrimination on the basis of sex, race, national origin, age, religion and disability to challenge the discrimination in court, are the same groups waging war against the Employee Free Choice Act – the bill that will give workers the freedom to choose a union to represent them. The more women unionize, the more they rightfully earn and the narrower the wage gap becomes.

Help pass the Employee Free Choice Act, and soon we might be celebrating Pay Equity Day when it should be celebrated – in December.

About the Author: Eileen Toback is a political strategist and labor relations expert. To read more of Eileen’s commentary on labor issues, check out unionmaiden.wordpress.com. If you have a question for Eileen, contact her via eileentoback@gmail.com.

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