Why Every Working Woman Should Know The History Of Equal Pay

The gender wage gap has been an issue for female workers for centuries and decades, but the introduction and enforcement of equal pay has gradually changed this. According to the WAGE project this pay disparity affects women of all educational levels, they estimate that women with a high school diploma lose up to $700,000 over a lifetime, those with a college degree about $1.2 million, and professional degree holders up to $2 million, these inequities continue into retirement by reducing Social Security benefits, pensions, savings, and other financial resources.

The Equal Pay Act is a labor law that prohibits gender-based wage discrimination in the United States. This law mandates equal pay for equal work by forbidding employers from paying men and women different wages or benefits for doing jobs that require the same skills and responsibilities. It aims at reducing gender discrimination in the workplace.

In the early 20th century, women made up a quarter of the American workforce but were paid far less than men. 

Before the Equal Pay Act, 

• Women were paid less than men in nearly every occupation for the same work
• Women were segregated into female-dominated jobs that typically pay less than male-dominated jobs 
• Pay secrecy policies prevented workers from identifying pay disparities
• Discrimination relating to pregnancy and caregiving responsibilities depressed women’s pay
• Wage theft has a disproportionate impact on women, who comprise two-thirds of minimum wage earners

In 1942, efforts were made to correct the wage gap. During World War II, American women entered factory jobs to replace men who had enlisted in the military. The National War Labor Board endorsed equal pay policies in these instances.

Three years later, despite campaigns by women’s groups, little progress was made on pay equity. The U.S. Congress introduced the Women’s Equal Pay Act, which did not pass. By 1960, women still earned less than two-thirds of what their male counterparts were paid.

To curb the problem of wage discrimination, the Equal Pay Act was passed on June 10, 1963, by President John Kennedy. 

The Equal Pay Act mandates that employers cannot award unequal wages or benefits to men and women working jobs that require “equal skill, effort, and responsibility, and which are performed under similar working conditions.” Kennedy praised it as a “significant step forward,” but acknowledged that “much remains to be done to achieve full equality of economic opportunity” for women.

The Equal Pay Act applies beyond pay; it also includes non-discretionary bonuses, overtime rates and allowances, performance-related benefits, severance and redundancy pay, pension schemes, hours of work, company cars, sick pay, fringe benefits such as travel allowances and benefits in kind. 

However, setting up and maintaining equal pay requires a fair and transparent system. To establish this: 

• The pay and benefits system should be explained to everyone
• There should be clear job descriptions and titles
• There should be limited managerial discretion over all elements of the pay package
• An equality impact assessment should be carried out 
• An equal pay policy should be created 
• Pay systems should be as simple and easy to manage

The Equal Pay Act has significantly helped narrow the gender wage gap in the United States. In addition to this feat, the act affords the following opportunities: 

Economic Boost: Generally, women account for 83% of all U.S. spending among consumers. When they receive less pay, their spending power is limited. The Equal Pay Act stimulates economic growth as women can share their financial gain as consumers.

Legal Action: Under the Equal Pay Act, employees who are discriminated against can file a complaint with the Equal Employment Opportunity Commission or directly sue their employer in court. 

An Increase in Innovation: Women will stay out of the workforce if they do not believe the potential pay is worth their time. This decline in workers harms innovation in the workforce because not every eligible worker is contributing their skills to the workforce. So the establishment of the Equal Pay Act increases innovation in the workplace.