Obama Signs Directives to Reduce the Gender Wage Gap

Stephanie Seguino: “The average wage gap between men and women in the tech industry is $400 a week.”

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SHARMINI PERIES, TRNN PRODUCER: Welcome to The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.

Earlier this week, President Obama signed two directives that require federal contractors to maintain data on race, data, workers’ wage, and prohibit retaliation against workers who share information about their pay with one another. This is an attempt by the Democratic Party to appeal to women before the midterm elections. This is also an effort to close the persisting wage gap between men and women.

Here to discuss all of this is Stephanie Seguino. Stephanie is a professor of economics at the University of Vermont, and she’s a research scholar at PERI institute at the University of Massachusetts Amherst.

Thanks for joining us, Stephanie.

STEPHANIE SEGUINO, PROF. ECONOMICS, UNIV. VERMONT: Thanks for having me.

PERIES: So explain the directives to us.

SEGUINO: Well, it was really just as you said, that in some cases workers are prohibited from sharing information with other workers about their salaries. This legislation provides for a prohibition against retaliation for workers who do do that. And it also requires businesses to keep data by gender and by race with regard to salaries and benefits.

PERIES: What is the wage gap right now? I understood that since, actually, the last recession, that the wage gap between men and women were actually decreasing. But you’ve had some contradictory data. Is that right?

SEGUINO: Well, it depends on the state. And in Vermont, for example, the wage gap is–widened slightly by one or two percentage points in the last couple of years. It’s certainly not on a steady trend of declining in Vermont. There is some decline in other states in the United States.

PERIES: What are some of the professions, Stephanie, that the wage gap is greater in?

SEGUINO: Well, it depends, but I’ll just give you an example. In the software industry, which is a relatively young workforce, you might think that men and women, because they’re young, before they have families and so forth, would earn the same wages, roughly, but for the median earnings of full-time males in that industry is around $1,700 a week, compared to $1,300 a week for female workers. So in many occupations, even in female-dominated occupations, we see wage gaps between men and women. So although many people would argue that wage gaps, because the women choose lesser-paid occupations, in reality wage gaps are also because women are paid less than men in the same occupations.

And I think that what this new rule is going to do, that is, the one that prevents retaliation, is it’s going to close wage gaps within occupations.

PERIES: Stephanie, what does it mean for the lower-end wage earners?

SEGUINO: That’s an interesting question. That’s–actually, that’s an excellent question. And I think that this is going to have more impact on higher-wage workers. I don’t think that, you know, amongst low-wage workers there’s–I don’t think the dynamics are the same as they in higher-earning occupations. So my guess is that in retail–in kind of retail sales, lower-skilled retail sales and restaurant services and so forth, that it’s not as likely to have as great an impact.

PERIES: So, Stephanie, if women continue to earn less and more and more families are headed by females, what does this mean socially?

SEGUINO: Well, I mean, so just to maybe restate what you’ve said, that certainly what we’re seeing is that there’s not been a tremendous narrowing of the gender wage gap, as we see a larger percentage of households headed by women, and a significant percentage of children who are in single-mother households–and the long-run effects of that are very costly. So, often these discussions about the gender wage gap are about individuals. Maybe women choose lower-paid jobs or choose to stay home with children. But I think that that’s the wrong lens for us as–and policymakers. The negative effects on children of living in households in which there are too few resources are a cost that we’re going to pay as a society in the long run. So it’s in all of our interest to narrow the gender wage gap. And I’m very hopeful that these new rules will help do that.

PERIES: Can you talk more about female-led households? And what is the average income of a woman, using an example? Use real professions that you have studied.

SEGUINO: I can’t give you data on what the average earnings are of single-parent households or single-mother households, but I can give you data on poverty rates, and the poverty rate of single-mother households is around 50 percent. And that’s significantly higher than married-couple households, or even male-headed households. So it’s–the earnings problem is a very significant one in single-parent households.

I might add that, you know, Europe also has high rates of poverty amongst single-mother households. The difference in Europe is that they also have very good social programs, so that after transfers, the poverty rate amongst single-mother households is quite low. It’s as low as 6 percent in Denmark, compared to, you know, as I said, 50 percent in the United States.

PERIES: And is there significant support for this move by women’s organizations that you know of?

SEGUINO: My guess is that economists will be very interested in this, because having more information makes it easier to negotiate and to initiate negotiations with employers about wages.

One of the most interesting things to me is that there is–as I said, there’s been a discussion about the fact that perhaps women’s wages are lower than men’s because they don’t negotiate for higher wages, they’re less inclined, and there is a sense in which women are blamed for that. And I would–I think that there is also evidence that employers react negatively to women who are assertive and negotiate for higher wages, so they’re actually punished for behaving in the same way that men do, because they’re violating a gender stereotype.

I think that having full information about wages, because it is a fairness issue, I think it is going to make it easier to engage in these negotiations, and I think that it’s going to be less criticized by employers and make it more likely that we could utilize this mechanism to close wage gaps.

PERIES: Right. One of the directives actually requires contractors to maintain data. But there’s no reference to what they’re going to do with this data. And I know economists will be happy, but how will this be used in order to hold the contractors accountable?

SEGUINO: You know, in many ways, in the ways that we do in our own institutions, at my own university, for example, just recently the provost requested a gender and race audit of salaries to see if in fact there are gender and racial differences in salaries amongst professors. And I’m happy to report that there were very insignificant differences. But that’s precisely what the government will be able to do with contractors is to look at their data to see if there is in fact significant variants in payments to women versus men and by racial or ethnic groups. And I would assume that the government might be able to utilize that as a criterion for awarding contracts, that is, that they might award more points to contractors who have more gender and racial equity and wage payments. Certainly, that’s what I would suggest. That’s one use of that data that I think would be very, very important.

PERIES: Very good. Stephanie, anything else you’d like to add to this discussion?

SEGUINO: No, I think it’s a solid move. I think we’ve run up against a lot of difficulties in trying to budge the wage gap. I think that this is an important step. It doesn’t address all of the problems. And, of course, one of the most significant problems is that the burden for unpaid labor disproportionately falls to women. And so women’s time out of the labor force leads to their lower wages, and we have yet really to tackle that problem. Nevertheless, I think this is a really important step, and I’m very pleased to see it.

PERIES: That’s great. Thank you so much for joining us.

SEGUINO: Sure. My pleasure. Thank you.

PERIES: And thank you for joining us on The Real News Network.

End

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