The Wage Gap: A History of Pay Inequity and the Equal Pay Act

A History of Pay Inequity in the U.S.

June 10, 1963: John F. Kennedy signs the Equal Pay Act into law. Almost four decades later, men's and women's salaries have yet to reach parity. Related Links Women's History Month Women's Earnings as a Percentage of Men's Median Annual Earnings by Sex and Race Pay Equity by Age The Wage Gap The Wage Gap The wage gap is a statistical indicator often used as an index of the status of women's earnings relative to men's. The wage gap is expressed as a percentage (e.g., in 2013 women earned 78.3% as much as men) and is calculated by dividing the median annual earnings for women by median annual earnings for men. Since 1963, when the Equal Pay Act was signed, the closing of the wage gap between men and women has been at a rate of about half a penny a year.

Because of the large number of American women taking jobs in the war industries during World War II, the National War Labor Board urged employers in 1942 to voluntarily make "adjustments which equalize wage or salary rates paid to females with the rates paid to males for comparable quality and quantity of work on the same or similar operations."

Not only did employers fail to heed this "voluntary" request, but at the war's end most women were pushed out of their new jobs to make room for returning veterans.

Help wanted—Separate and Unequal

Until the early 1960s, newspapers published separate job listings for men and women. Jobs were categorized according to sex, with the higher level jobs listed almost exclusively under "Help Wanted—Male." In some cases the ads ran identical jobs under male and female listings—but with separate pay scales. Separate, of course, meant unequal: between 1950 and 1960, women with full time jobs earned on average between 59–64 cents for every dollar their male counterparts earned in the same job.

It wasn't until the passage of the Equal Pay Act on June 10, 1963 (effective June 11, 1964) that it became illegal to pay women lower rates for the same job strictly on the basis of their sex. Demonstrable differences in seniority, merit, the quality or quantity of work, or other considerations might merit different pay, but gender could no longer be viewed as a drawback on one's resumé.

The Courts Nix the "Going Market Rate" for Women

The act was gradually expanded over the next decade to include a larger segment of the workforce, and between June 1964 and Jan. 1971 back wages totaling more than $26 million were paid to 71,000 women.

The blatant discrimination apparent in these court cases seems archaic today, as does the practice of sex-segregated job listings. The workplace has changed radically in the decades since the passage of the Equal Pay Act.

But what has not changed radically, however, is women's pay. The wage gap has narrowed, but it is still significant. Women earned 59% of the wages men earned in 1963; in 2012 they earned 80.9% of men's wages—an improvement of about half a penny per dollar earned every year. Why is there still such a disparity?

Why Such a Wide Wage Gap After Nearly Four Decades?

A variety of explanations for the persistent wage gap have been offered. One is that older women are factored into the wage gap equation, and many of these women from an older generation work in jobs still subject to the attitudes and conditions of the past. In contrast, the rates for young women coming of age in the 1990s reflect women's social and legal advances. In 2010, for example, women under 25 working full-time earned 93.8% of men's salaries compared to those 55 to 64, who earned 75.2% of what men made.

Equal Pay in the Millennium?

Does this imply that once the oldest generation of women has retired the wage gap will shrink considerably? Perhaps. But even the narrow wage gap of 93.8% that applies to women under 25 looks less rosy when you consider commentator Katha Pollitt's take on it:

Young men and women have always had earnings more compatible than those of their elders: starting salaries are generally low, and do not accurately reflect the advantages that accrue, or fail to accrue, over time as men advance and women stay in place, or as women in mostly female kinds of jobs reach the end of characteristically short career paths.

(The Nation, April 14, 1997)

In 2009, President Obama signed the Lily Ledbetter Fair Pay Restoration Act, which allows victims of pay discrimination to file a complaint with the government against their employer within 180 days of their last paycheck. Previously, victims were only allowed 180 days from the date of the first unfair paycheck. This Act is named after a former employee of Goodyear who alleged that she was paid 15%-40% less than her male counterparts, which was later found to be accurate. President Obama has vowed to reduce the wage gap between the genders: women currently make approximately 80 cents for every dollar that men earn. In April 2014, he signed two executive orders to help eliminate wage disparities among federal contract workers. One order bans federal contractors from punishing workers who discuss salaries with co-workers, and the other calls on the Labor Department to create rules that require federal contractors to submit salary information, broken down by race and gender, to the department. The day after Obama signed the orders, Senate Republicans blocked a vote on the Paycheck Fairness Act, which would have imposed the measures included in the executive orders on the entire American workforce. It was the third time since 2010 that the Senate failed to consider the legislation.

Women have made enormous progress in the workforce since the Equal Pay Act, but the stubborn fact remains that five decades later the basic goal of the act has not been realized.

By Borgna Brunner and Beth Rowen