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Hearing of March 16, 2016 - Public Hearing: Proposed Revisions to the EEO-1 Report

Written Testimony of Ariane Hegewisch
Institute for Women's Policy Research

Thank you, Chair and Commissioners, for the opportunity to testify today on the EEOC's proposal to add pay data to the EEO-1 report.

My name is Ariane Hegewisch; I am the Program Director for Employment& Earnings at the Institute for Women's Policy Research (IWPR). Prior to joining IWPR I worked for over a decade at Cranfield School of Management, one of the top university business schools in the United Kingdom, where I was a lecturer and senior researcher on Human Resource Management.

IWPR conducts rigorous research and disseminates its findings to address the needs of women, promote public dialog, and strengthen families, communities, and societies. IWPR has conducted research and monitored trends on women's earnings and the gender wage gap since it was founded more than 25 years ago. As everyone here knows well, whatever measure is used, women's earnings are significantly lower than men's. With the proposed addition of broad pay data to the EEO-1 reports the EEOC is taking an important step in identifying the sources of unequal pay.

The Revised EEO-1 Report and Pay Transparency

The aggregated occupation and pay data will provide valuable new information to the enforcement agencies on occupation and industry patterns and on patterns of employment and earnings inequality by gender, race and ethnicity. Given the aggregated form in which the data will be collected- designed to use data that employers already collect- the information will not directly help individual women and men find out about the pay of their co-workers. And thus, it will not directly address the pay secrecy barriers that prevents individual women and men from finding out whether they are paid fairly. Such pay secrecy undoubtedly contributes to the gender wage gap. Over sixty percent of private sector workers are prohibited or discouraged from discussing pay.1 Research finds that in states where pay secrecy is illegal, the gender wage gap is lower.2

Yet, the benchmarking data the EEOC will publish by gender, race, and ethnicity for different industries, size of employers, and broad occupational groups based on the new EEO-1 reports will help workers identify industry and occupation trends and make them more astute when negotiating with their employers. Offering more earnings data to public scrutiny may increase employers' voluntary efforts at greater pay transparency, and may encourage greater self-monitoring.

Persistent Gender Inequality in Earnings by Race, Ethnicity, and Education

Earnings differences cost women dearly and are a major contributor to women's higher poverty rates.3 In spite of women's continued increase in educational attainment, there is no sign that the gender wage gap is diminishing. Indeed, latest data from the Bureau of Labor Statistics suggests that the gender wage gap widened during 2015.4 Once we compare only women and men with the same highest level of educational attainment, the gender wage gap is even larger. For example, in 2014, the median weekly earnings for full-time work for women with a bachelor's degree were only 77.0 percent of those of men with a bachelor's degree.5 Black and Hispanic college- educated women experience even greater earnings losses, earning just 70 and 68 percent respectively of median earnings of college-educated men.6

The Need for Better Understanding of the Causes of Gender Inequality in Earnings

Having better benchmarking data will also be especially valuable to researchers because the specific causes and locations of pay disparities remain largely unknown.  A large part of the gender wage gap--38 percent--remains unexplained by measurable factors such as education, experience, race, region, or occupation.7 While it is not possible to say how much of this unexplained gap is due to discrimination, it is likely that discrimination accounts for a substantial part of it. Occupational segregation--women and men working in different occupations, with the female-dominated occupations paying less-and industry segregation-women and men, in whichever occupations, working in different industries, with industries where women predominate paying less-account for half of the gap in earnings.8 Of course, the fact that differences in occupations or industry statistically explain part of the wage gap does not mean that such outcomes are untainted by discriminatory employment policies and practices.9

The new EEOC benchmarking data will add to our understanding of employers' contribution to the wage gap. Our understanding of private employers is particularly limited. With very few exceptions,10 private employers have not provided access to researchers interested in understanding pay discrimination. More typically, our knowledge of pay discrimination is limited to law cases.11 Law cases provide poignant examples of discrimination; they do not allow us to assess whether such cases are isolated incidents or broader practices.

The Urgent Need for Action

It has been more than fifty years since Congress passed the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964 and declared pay discrimination illegal. If progress towards equal pay continues at the same rate as it has since 1960, equal pay will not be reached until 2058.12 Based on progress during the last decade alone, we may never reach it. Collectively this inequality costs women and their families $482 billion a year (the equivalent of 2.8 percent of GDP in 2014).13 The proposed new data collection, and the greater insights it will provide on how and where to tackle pay inequality, is both relevant and urgent.


Footnotes

1 Institute for Women's Policy Research. 2014. "Pay Secrecy and Wage Discrimination." IWPR #Q016. Washington, DC. http://www.iwpr.org/publications/pubs/pay-secrecy-and-wage-discrimination-1#sthash.BzLUjyJ1.dpuf (accessed March 8, 2016).

2 Marlene Kim. 2015. "Pay Secrecy and the Gender Wage Gap in the United States." Industrial Relations 54(4)648-667; the research is focused on college educated workers.

3 Heidi Hartmann, and Jennifer Clark. 2014. "How Equal Pay for Working Women would Reduce Poverty and Grow the American Economy." Briefing Paper #C411; Washington, DC: Institute for Women's Policy Research, http://www.iwpr.org/publications/pubs/how-equal-pay-for-working-women-would-reduce-poverty-and-grow-the-american-economy#sthash.IiIsLudb.dpuf (accessed March 6, 2016).

4 Ariane Hegewisch and Asha DuMontier, 2016. "The Gender Wage Gap: 2015 Earnings Differences by Race and Ethnicity." Fact Sheet IWPT #C437; Washington, DC: Institute for Women's Policy Research, http://www.iwpr.org/publications/pubs/the-gender-wage-gap-2015-earnings-differences-by-race-and-ethnicity (accessed March 8, 2016).

5 IWPR analysis of the Current Population Survey Merged Outgoing Rotation Groups as provided by the National Bureau of Economic Research (http://www.nber.org/cps); workers ages 25 years and older. The gender earnings ratio for all weekly full-time workers ages 25 and older at the median was 81.1 percent in 2014.

6 Earnings data for women by of largest race and ethnic groups from U.S. Department of Labor Women's Bureau. 2106. "Women's Median Weekly Earnings by Educational Attainment, Race and Hispanic or Latino Ethnicity, 2014 Annual Averages." http://www.dol.gov/wb/stats/median_weekly_earnings_edu_race_hisp_2014_txt.htm (accessed March 5, 2016).

7 Francine D. Blau and Lawrence M. Kahn. 2016. "The Gender Wage Gap: Extent, Trends, and Explanations." NBER Working Paper 21913; Cambridge: National Bureau of Economic Research http://www.nber.org/papers/w21913 (accessed March 8, 2016); Table 4.

8 Ibid; occupational variables explains 32.9 percent, and sector 17.6 percent.

9 See for example U.S. Department of Employment Office of Federal Contract Compliance.2013. "G&K Settles Claim of Pay and Hiring Discrimination with U.S. Labor Department." Press release, July 25, http://www.dol.gov/newsroom/releases/ofccp/ofccp20131725 (accessed March 8, 2016); or U.S. Equal Employment Opportunity Commission. 2015. "Unit Drilling to Pay $400,000 to Settle EEOC Systemic Sex Discrimination Suit." Press release, April 22, http://www.eeoc.gov/eeoc/newsroom/release/4-22-15a.cfm (accessed March 8, 2016). For examples of discriminatory behaviors experienced by women in construction, see for example, Ariane Hegewisch and Brigid O'Farrell. 2015. Women in the Construction Trades: Earnings, Workplace Discrimination, and the Promise of Green Jobs Washington, DC: Institute for Women's Policy Research http://www.iwpr.org/publications/pubs/women-in-the-construction-trades-earnings-workplace-discrimination-and-the-promise-of-green-jobs#sthash.QDAHIwBB.dpuf, or National Women's Law Center. 2014. "Women in Construction, Still Breaking Ground." Washington, DC. http://www.nwlc.org/sites/default/files/pdfs/final_nwlc_womeninconstruction_report.pdf(accessed March 8, 2014); for the IT industry, see, for example, Trae Vassalo et al. 2015. "Elephant in the Valley." Women in Tech, http://elephantinthevalley.com/ (accessed March 8).

10 See for example Emilio J. Castilla. 2008. "Gender, Race, and Meritocracy in Organizational Careers." American Journal of Sociology 113 (6) 1479-1526 and Janice Fanning Madden. 2012. "Performance-Support Bias and the Gender Pay Gap among Stockbrokers." Gender & Society  26 (3) 488-518.

11 For a review of sex and race discrimination law suits from 2000 to 2008, see Ariane Hegewisch, Cynthia Deitch and Evelyn Murphy. 2011. Ending Sex and Race Discrimination in the Workplace: Legal Interventions That Push the Envelope Washington, DC: Institute for Women's Policy Research http://www.iwpr.org/publications/pubs/ending-sex-and-race-discrimination-in-theworkplace-legal-interventions-that-push-the-envelope-1 (accessed March 8, 20016).

12 Institute for Women's Policy Research. 2014. "Women's Median Earnings as a Percent of Men's Median Earnings, 1960-2013 (Full-time, Year-round Workers) with Projection for Pay Equity in 2058." IWPR #Q026 Washington, DC. http://www.iwpr.org/publications/pubs/women2019s-median-earnings-as-a-percent-of-men2019s-median-earnings-1960-2013-full-time-year-round-workers-with-projection-for-pay-equity-in-2058#sthash.94bEomIY.dpuf. (accessed March 8, 2016).

13 Institute for Women's Policy Research. 2016. "The Economic Impact of Equal Pay by State." IWPR #R468 Washington, DC. http://www.iwpr.org/publications/pubs/the-economic-impact-of-equal-pay-by-state (accessed March 8, 20016).