Thursday, January 24, 2008

Long Term Economic Stimulus: How About Fair Pay?

Extra!! Extra!! The Sharks and Jets have come to terms on an economic stimulus package! Yes, folks, the powers that be in our nation's capital -- also known as Republicans and Democrats -- managed to channel grown ups and hammered out a deal involving $145 billion in rebate checks to poor and middle-class workers. And, because this is America and you can't give a dime to the working man without padding the pockets of big business, the plan also includes one-time business incentives to invest in new equipment and write off tax losses. The plan includes nothing for unemployment benefits, nothing for food stamps -- stuff that might actually "stimulate" the economy since they're targeted towards folks who are practically guaranteed to spend it, you know, cuz they must to make ends meet. Imagine that.

But, don't start spending your windfall yet, my friends. This is only a House deal (all spending bills must originate in the House) and Senate Majority Leader Harry Reid (D-NV) has already indicated that the Club of 100 will want to "make improvements" to the House package. Given that it will take at least 10 weeks for checks to start flowing, it seems to me the Senate oughta just leave well enough alone. But we have to remember, the Senate is filled with 100 extraordinarily important people, each and every one of whom will want to add his or her two cents to this economic policy debate. Several times. With charts and graphs. Preferably on television. With cute kids standing around them. So, hmmm.... Treasury Secretary Henry Paulson's estimate of May Day being Check Day might well be pushed back to the dog days of August once the Senate process gets a hold of things. Here's hoping Harry can herd those cats, um, I mean Senators, and drive this bill through quickly. Not that I am completely convinced of this whole economic stimulus thing, mind you, but if you're gonna do it, do it -- don't pussyfoot around.

Now, for my money, if you want long term economic stimulus, Congress should take a long, hard look at pay equity issues -- and remedies for the lack thereof. The Senate had a hearing today on the Ledbetter Fair Pay Restoration Act (S. 1843) -- a bill the House has already had the good sense to pass. The bill is a time warp of sorts, taking us back to May 28, 2007 -- one day before the Supreme Court's wrongheaded, unrealistic -- okay, I'll just say it -- dumb ass decision in the case of Ledbetter v. Goodyear Tire and Rubber Company. Folks, this 5-4 decision was so backward that Justice Ruth Bader Ginsberg felt compelled to read her scathing dissent from the bench -- a pretty rare action by the usually mild mannered Justice intended to heap additional disdain on the Court's majority.

So why was Ruth so steamed? Well, to put it mildly, the Ledbetter decision hamstrings the ability of victims of pay discrimination to sue under Title VII of the Civil Rights Act of 1964. Without a legislative fix, employees will have very little recourse against continuing pay discrimination and employers will actually be immune from any kind of accountability for their actions once 180 days have passed. That's right, folks. If employers can hide pay discrimination for six months, they are forever free from responsibility for that bad act -- and can profit from it from that point forward. Profit from the money they save in an employee's lost wages, in lost benefits, in lost retirement contributions. WTF?

Let me try to break this down. Prior to Ledbetter, more than 30 years of legal precedent and EEOC practice held that each paycheck tainted by discrimination was -- in and of itself -- an act of discrimination. Makes sense to me, since a paycheck has always been recognized as a legal, contractual document. As a result, the 180-day statute of limitations in Title VII was deemed to be retriggered with each paycheck. However, in Ledbetter, the Court said -- nope, no more. You have 180 days from the time of the discriminatory pay decision -- say, when you were hired -- to get a clue. If you haven't gotten the lay of the land by then, you're shit outta luck.

Never mind the fact that lots of folks are actually forbidden by their employers to discuss their wages with co-workers. Never mind that we are more likely to share the intimate details of our sex lives with co-workers than we are salary information. The Court's reasoning assumes that new employees will wander down to the cafeteria, or gather 'round the water cooler -- in their first six months on the job, mind you -- and quiz their new colleagues about their automatic deposits. What a great way to win friends and influence people in a new job.

The Fair Pay Restoration Act clarifies -- again, for the folks on the Supreme Court that seem stuck on the short bus -- that each discriminatory paycheck is in fact another act of discrimination, restoring the law to how it was previously applied. It's a simple, commonsense fix that must be passed. 'Course, the U.S. Chamber of Commerce is lobbying heavily against it -- the Ledbetter decision was an unexpected plum that fell in their lap and they don't wanna give it up. But really, guys, even with this bill the system is still stacked against employees -- the burden of proof is all on them. And you're still playing women 77 cents on the dollar to the average white guy. Heck, even when you crunch the numbers for the kinds of things that should effect wages -- experience, education, responsibilities -- there is still a significant but unexplained gap. It's discrimination, that's what it is. And denying women any effective legal remedy when discrimination is alive and well and living in your cubicle villages and board rooms -- well, now you're just being greedy.

Fair pay. Now that's a long term economic stimulus plan we could bank on. If Congress and the courts -- as well as employers -- would take proactive, effective steps to ensure fair pay, just imagine the additional X-boxes and Lazy Boys people could buy. Oh, and they might be able to pay the mortgage and save for retirement, too. Is it too much to ask -- more than 4o years after passage of the Civil Rights Act and the Equal Pay Act -- that women and people of color bring home the bacon at the same rates, for the same jobs, as the white guys? I really really really don't think it is. Oh, and it would be fair, too. Now that's a stimulating idea.


HR in MD said...

Come on ZR!

"Fair" Pay as an economic stimulus?! You'd be hard pressed to find an economist with that opinion.

Aside from that folicy, the Ledbetter Act takes a wrong, and makes it wronger. Under the poorly written bill, any time an employee receives a check (or even an annuity check in retirement) the clock restarts, effectively eliminating the statute of limitations. There is no debate on what would result if the bill is enacted- an exponential increase the amount of frivilous lawsuits against an employer.

This takes a toll on companies, both in financial resources and a loss in prodcutivity. This is the exact opposite environment policy makers desire when the economy is retracting.

Nevertheless, please keep up the good work on this well written blog

ZaftigRedhead said...
This comment has been removed by the author.
ZaftigRedhead said...

Thanks for the comment, HR -- and thanks for reading! We could go round and round on fair pay and what economists have to say, but its really better if I respond to your comments about the Ledbetter bill -- some of which, in truth, are simply inaccurate.

The only thing the Ledbetter bill does is create a time warp, taking us back to the May 28, 2007 -- the day before Ledbetter decision. It codifies the paycheck accrual rule, which had been both the legal precedent and the EEOC policy that we'd all been working under for more than 30 years pre-Ledbetter. Clearly, the sky didn't fall, and employees did not have an unfair advantage over their employers during this period.

The Ledbetter Fair Pay Restoration Act is a narrow fix that simply rights the wrongheaded decision of the Supreme Court -- no more, no less. Interestingly enough, prior to the decision, the paycheck accrual rule was not something that the business community was clamoring to change. There were no bills to that effect, it was not on the US Chamber of Commerce's wish list. It was a workable system, and it was settled law. Bear in mind that pre-Ledbetter and under the Ledbetter bill, the employer is still only liable for two years of compensatory pay -- in Lilly Ledbetter's case, they'd been discriminating against her for over 20 and would only have had to catch her up on two of them. Also, as it was under the previous policy and precedent, the Ledbetter Fair Pay Restoration Act does not have the pay check accrual rule apply to retirement or pension payments, and does not allow damages based on lost retirement savigns (I could wish it did, but that is another bill.)

The bill is a narrow fix, that actually retains an employees ability to seek a remedy, and balances an employers need to not be forever liable by maintaining the two year compensatory damanges limit. Sounds fair to me.