Under the laws governing Equal Employment Opportunity, described in Chapter 3, employers may not base differences in pay on an employee’s age, sex, race, or other protected status. Any differences in pay must instead be tied to such business-related considerations as job responsibilities or performance. The goal is for employers to provide equal pay for equal work. For example, being female or over 40 may not be the basis for different pay for two equally experienced lawyers or two equally experienced janitors handling equally difficult workloads equally well, Job descriptions, job structures, and pay structures can help organizations demonstrate that they are upholding these laws.
These laws do not guarantee equal pay for men and women, whites and minorities, or any other group, because so many legitimate factors, from education to choice of occupation, affect a person’s earning. In fact, number show that women and racial minorities in the United States tend to earn less than white men. Among full-time workers in 2000, women on average earned 79 cents for every dollar earned by men, while black workers on average earned 79 cents for every dollar earned by white workers. Even when these figures are adjusted to take into account education, experience, and occupation, the earnings gap does not completely close.
One explanation for historical lower pay for women has been that employers have undervalued work performed by women---in particular, placing a lower value on occupations traditionally dominated by women. Some policy makers have proposed a remedy for this called equal pay for comparable worth. This policy uses job evaluation (described later in the chapter) to establish the worth of an organization’s job in terms of such criteria as their difficulty and their importance to the organization. The employer then compares the evaluation points awarded to each job with the pay for each job. If job have the same number of evaluation point, they should be paid equally. If they are not, pay of the lower-paid job is raised to meet the goal of comparable worth.
Comparable-worth policies are controversial. From an economic standpoint, the obvious drawback of such a policy is that raising pay for same jobs places the employer at an economic disadvantage relative to employers that pay the market rate. In addition, a free-market economy assumes people will take differences in pay into account when they choose a career. The courts allow organizations to defend themselves against claims of discrimination by showing that they pay the going market rate. Businesses are reluctant to place themselves at an economic disadvantage, but many state governments adjust pay to achieve equal pay for comparable worth. Also at both private and government organizations, policies designed to shatter the “glass ceiling” can help to address the problem of unequal pay.