CHANGE THE SYSTEM, NOT THE WOMAN: ADDRESSING WORKPLACE INEQUITIES STEMMING FROM THE AMERICAN ECONOMY
By: Alyssa Shaw, Volume 109 Staff Member
If the progress towards closing the gender wage gap continues on the trends of the last few years, women will not be compensated equally to men until at least 2067—over a century after the passage of the Equal Pay Act.[1] Women working full-time, year-round receive just 84 cents on the dollar compared to men, resulting in an average difference of $10,000 in wages over the span of a year.[2] Women are paid less than men at every education level, with women who obtain advanced degrees being paid less on average than men with bachelor’s degrees.[3] These differences have traditionally been attributed to women’s own occupational choices,[4] but the authors of Fair Shake: Women and the Fight to Build a Just Economy suspect a more menacing explanation—the winner-take-all (“WTA”) economy of modern America.[5]
Understanding the pitfalls of the current WTA economy requires a look back to the 1950s in the age of the “organization man.” In this era, the most desirable qualities in leaders were traits typically associated with women—cooperation, loyalty, and consensus-based decision making.[6] The best company men put the longevity and success of their employer above their own personal incentives, and market competition was between companies not within companies.[7] Today’s market competition takes a vastly different form, and the authors identify a critical shift in the economy where those at the top take a much larger share of institutional resources (and power) for themselves.[8] Outsized CEO salaries provide a prime example of this shift in economic structure from the 1950s to today.[9] The dramatic increase in salaries result in top employees being rewarded with massive bonuses and stock options, making those who succeed extremely wealthy.[10] As one would expect, corporate cultures profoundly changed as life-altering monetary incentives increased intracompany competition and the well-being of the group was replaced with the enrichment of the few at the top.[11] Those who are willing to do whatever is necessary to “win” are rewarded with riches and recognition, and those who “lose” or are unwilling to push ethical boundaries are left in the dust.[12]
In Fair Shake, authors Naomi Cahn, June Carbone, and Nancy Levitt illustrate how the injustices of the WTA economy transcend employment sectors and stall women’s progress in the workplace.[13] The authors introduce the concept of a “triple bind,” [14] which details three reinforcing binds women in the workforce face: (1) when women don’t compete on the same terms as men, they lose;[15] (2) when women play by the same rules as men, they lose;[16] and (3) when women see what the new rules are, they refuse to play the game.[17] These binds, as demonstrated through lawsuits women filed against their employers, explain how the gender pay gap persists even when women are the better educated sex and have gained a foothold in male dominated industries like technology, law, and finance.[18] The triple bind is a reinforcing mechanism where women are beat out by their male colleagues regardless of which rules they play by. Overcoming the gender inequities the WTA economy perpetuates requires more than the current state law initiatives to improve wage transparency and support women with paid leave.
I. STATE ATTEMPTS TO CLOSE THE GENDER WAGE GAP FAIL TO ADDRESS THE ROOT CAUSE OF PAY INEQUITIES
Over the last decade, state legislatures have recognized the urgent need to address the persisting gender wage gap and enacted laws to attempt to level the playing field for women.[19] Currently, ten states have pay transparency laws.[20] Additionally, there is optimism for federal intervention after Congress introduced the Salary Transparency Act and Pay Equity for All Act in 2023.[21] These laws aim to reduce the gender wage gap by arming employees with salary data, prohibiting employers from requesting salary history, and requiring employers to disclose salary ranges on job postings, which empowers individuals to negotiate for fair compensation.[22] Equal pay for equal work is a step in the right direction for resolving the gender pay inequities.[23] However, the failure of these laws to address a major driver of the pay gap—low representation of women in the highest paying roles—indicates the triple bind will continue to keep women out of high power, executive positions.[24]
Paid family leave laws have also gained traction over the last two decades in an attempt to ease the burdens of family caregiving.[25] The requirements of each program vary, with some states mandating employer participation and others adopting voluntary systems.[26] These policies are designed to provide partial wage replacement while employees are off from work to care for their children or family members.[27] These laws have shown promising results when it comes to increasing the labor force participation of mothers.[28] However, increases in labor force participation do not address the significant trade-offs women face when taking long leaves of absence. These trade-offs include lesser likelihoods of being promoted, moving into management, or receiving a pay raise after returning from leave.[29] In a system that thrives off of competition amongst co-workers, it is easy to see how women who are absent fall behind and struggle to catch up to their male counterparts. Paid family leave makes great strides at decreasing the economic burdens of family caregiving, but additional reforms are needed to combat the negative impact absence can have on women’s careers.
II. POSSIBLE AVENUES TO CHANGE THE SYSTEM AND EVEN THE PLAYING FIELD FOR WOMEN
Overhauling an entire economic system representing the epitome of a capitalistic society is not an easy task, but the Fair Shake authors provide important suggestions on where to focus reform efforts.[30] They emphasize the importance of women acting collectively to fight against the values of the WTA system and insist that corporations are held accountable for the toxic environments they harbor.[31] Initiatives like the #MeToo movement demonstrate that women who come together to expose systemic abuses to the public can become successful advocates for changing the WTA ethos by refusing to allow those with power to continue to evade the law.[32] These efforts are especially important for exposing the abuses to the public and increasing the likelihood of tangibly addressing the harms through lawsuits.[33] However, practices that allow companies to minimize the public exposure of wrongdoing, like mandatory arbitration and confidentiality agreements, should be eliminated to decrease opportunity to break the law and get away with it.[34]
The coordinated and concerted efforts of women are a critical piece to the puzzle of closing the gender wage gap, but overcoming the perverse incentives of the WTA economy requires significant policy reform from multiple angles. Cahn, Carbone, and Levitt propose attacking the triple bind through national economic policy reforms.[35] Many of these proposed efforts are targeted at capping the accumulation of power in the hands of a few players[36] and increasing economic stability of the lower class.[37] They also advocate for greater investment in individuals, children, and communities.[38] Fair Shake’s comprehensive and compelling discussion of the state of women in the workforce indicates that wage transparency and paid family leave laws only provide a bandage to ease the side effects of the WTA economy. Until policymakers are ready to dismantle the WTA system that breeds economic insecurity and unethical competition, women and their allies must continue to fight tooth and nail for true gender equality in the workplace.
[1] See Rose Khattar, Closing the Gender Pay Gap, Center for American Progress (Mar. 14, 2024) https://www.americanprogress.org/article/playbook-for-the-advancement-of-women-in-the-economy/closing-the-gender-pay-gap [https://perma.cc/T63Y-3NWA].
[2] Additionally, these pay discrepancies are even larger for women of color. Id.
[3] Elise Gould, Gender Wage Gap Persists in 2023, Economic Policy Institute fig. 3 (Mar. 8, 2024) (graphing the average hourly wage of a college educated man as $50.37 and the average hourly wage of an advanced degree educated woman as $48.21) https://www.epi.org/blog/gender-wage-gap-persists-in-2023-women-are-paid-roughly-22-less-than-men-on-average [https://perma.cc/3HD3-W6BF].
[4] See Deborah Rho, What Causes the Wage Gap?, The Gender Policy Report (Feb. 24, 2021) (“[R]esearch suggests that time away from employment, occupational clustering, and the time demands of jobs explain much of the difference in wages between men and women.”) https://genderpolicyreport.umn.edu/what-causes-the-wage-gap [https://perma.cc/SQ4Q-GRZD].
[5] See Naomi Cahn, June Carbone & Nancy Levit, Fair Shake: Women and the Fight to Build a Just Economy 13 (2024).
[6] Id. at 10 (“[T]he company man of the fifties could have been a woman. That is, the traits that characterized the best of corporate America in that era—an emphasis on cooperation, loyalty, and consensus-based decision-making—are traits traditionally coded as feminine.”).
[7] Id. at 13 (“Winning now means besting the worker in the next cubicle and winning the bigger bonus.”).
[8] Id. at 9.
[9] Josh Bivens & Jori Kandra, CEO Pay Slightly Declined in 2022 But It Has Soared 11,209.2% Since 1978 Compared with a 15.3% Rise in Typical Workers’ Pay, Economic Policy Institute (Sept. 21, 2023) (“In 2022, CEOS were paid 344 times as much as a typical worker in contrast to 1965 when they were paid 21 times as much as a typical worker.”) https://www.epi.org/publication/ceo-pay-in-2022/#full-report [https://perma.cc/P5RF-ZJAH].
[10] Cahn, supra note 5, at 10 (“Successful CEOs… began to reward their top lieutenants, managers, and key employees with bonuses and stock options that could make those who succeeded very wealthy—and substantially better paid than other company employees.”).
[11] Id. at 10 (“The transformation in executive compensation brought back the late nineteenth-century robber baron mindset of no-holds-barred competition, [and] individualism at the expense of institutions and community . . . .”).
[12] Id. (“[T]hose who ‘win’ by any means necessary become the toast of the town, while those who lose, perhaps because they are too ethical to do what it takes, are relegated to a back office cubicle—if they keep their jobs at all.”)
[13] Id. at 13 (discussing how the WTA economy impacts women in job sectors ranging from lower-level retail jobs to the top executives in banking and Silicon Valley).
[14] Id. at 14–15.
[15] Id. at 17–19 (introducing the stories of three women from different economic sectors and their experiences as female employees who did not recognize the unwritten rules that lead to success in the hyper-competitive WTA workplace).
[16] Id. at 120–21 (discussing how women bear a disproportionate amount of blame and are more likely to be fired when engaging in the same rule breaking behaviors as men).
[17] Id. at 175–76 (“Women who come to understand the rules of the game often decide they want nothing to do with toxic workplace environments.”).
[18] Id. at 3–4 (“[A]fter the mid-1990s the only reason women appeared to be gaining ground on men had nothing to do with women’s progress; it was almost entirely due to the fact that wages for blue-collar men were falling dramatically during that same period. Then when we looked at the number for college graduates, we found that the gender gap in wages was increasing.”)
[19] See Alonzo Martinez, 2024 State-By-State Pay Transparency Laws: Key Insights for Employers, Forbes (June 14, 2024) (providing a state-by-state list of pay transparency laws and their requirements) https://www.forbes.com/sites/alonzomartinez/2024/06/14/2024-state-by-state-pay-transparency-laws-key-insights-for-employers [https://perma.cc/VX57-5LMC]; State Paid Family Leave Laws Across the U.S., Bipartisan Policy Center (Jan. 16, 2024) (listing the types of paid family leave laws and the requirements under each state statute) https://bipartisanpolicy.org/explainer/state-paid-family-leave-laws-across-the-u-s [https://perma.cc/5TH3-R82F].
[20] See Christina Marfice, Pay Transparency Laws: A State-By-State Guide, Rippling (May 26, 2024) (listing California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island, and Washington as states with current pay transparency laws) https://www.rippling.com/blog/pay-transparency-laws-state-by-state-guide [https://perma.cc/9WM4-YV9G].
[21] See H.R. 1599, 118th Cong. (2023) (attempting to amend the Fair Labor Standards Act to require employers to disclose wage ranges for job opportunities); H.R. 1600, 118th Cong. (2023) (prohibiting employers from relying on salary history when considering prospective employees for employment or determining their wages); Marfice supra note 20.
[22] Martinez, supra note 19.
[23] Chris Martin, The Gender Pay Gap is Shrinking Faster in 4 of 6 States with Pay Transparency Laws, Syndio (Jan. 25, 2024) (“Occupational pay gaps are closing more rapidly in most states with pay transparency legislation.”) https://synd.io/blog/gender-pay-gap-by-occupation [https://perma.cc/XPF5-AXXB].
[24] See id. (discussing how pay transparency laws are not a “silver bullet” for workplace equity).
[25] See Maya Rosin-Slater, Easing the Burden: Why Paid Family Leave Policies are Gaining Steam, Stanford Institute for Economic Policy Research (Feb. 2018) (discussing how paid family leave has entered the mainstream political debate after both presidential candidates in 2016 included paid leave proposals in their campaign platforms) https://siepr.stanford.edu/publications/policy-brief/easing-burden-why-paid-family-leave-policies-are-gaining-steam [https://perma.cc/LSP3-94SW].
[26] State Paid Family Leave Laws Across the U.S., Bipartisan Policy Center (Jan. 16, 2024) (discussing the varying requirements of paid leave laws in a total of twenty-three states) https://bipartisanpolicy.org/explainer/state-paid-family-leave-laws-across-the-u-s [https://perma.cc/5TH3-R82F].
[27] Rosin-Slater, supra note 25.
[28] See Paid Family Leave Increases Mothers’ Labor Market Attachment, Institute for Women’s Policy Research (Jan. 2020) (“Implementation of a state paid family leave policy increases the labor force participation of mothers by six percentage points in the year of a birth, effectively reducing birth-year maternal labor market detachment by 20 percent.”).
[29] Ivona Hideg et al., Do Longer Maternity Leaves Hurt Women’s Careers?, Harvard Business Review (Sept. 14, 2018) https://hbr.org/2018/09/do-longer-maternity-leaves-hurt-womens-careers [https://perma.cc/CQ6E-YGNZ].
[30] See Cahn, supra note 5, at 175–241 (discussing ways to tame the WTA economy).
[31] Id. at 176 (“[Women who are fighting back] have attempted to show the dark side of the WTA ethos, and their fight involves not just the litigation of individual wrongs but also the orchestration of media, community organizing, and voter mobilization to push back against those in power.”).
[32] Id. at 201–06 (detailing how the #MeToo movement developed and the downfall of hundreds of sexually abusive men in power).
[33] Id. at 212 (“Sexual harassment persists when its victims are isolated and powerless. Harassment diminishes when it is illuminated and identified.”).
[34] Id. at 241 (“[A]n end to confidentiality agreements can empower others to come forward with claims of discrimination and fraud. What can’t be seen and can’t be understood can’t be prosecuted—and is almost impossible to fight.”).
[35] Id. at 235–40.
[36] Id. at 235–36 (indicating that returning to the high marginal tax rates of the ‘50s and ‘60s or capping executive compensation will decrease incentives to set up illegitimate business practices, target the rigged bonus system, and likely result in greater investment in institutions themselves).
[37] Id. at 238 (discussing how increasing the minimum wage ensures that many workers do not need public benefits to boost their salaries and has ripple effects in local communities).
[38] Id. at 239 (“Women—and their children, and the larger society—will win only if there is greater public investment in childcare, universal pre-K, paid family leave, and family-friendly workplaces. Investment in children, as the workers of tomorrow, pays off for society as a whole.”).