Empowering class-action plaintiffs’ lawyers to set wages for every business in these United States is the last thing a shaky economy needs. But that’s clearly a high priority for the officials running the U.S. House of Representatives. The lawmakers couldn’t find time before their August recess to pass spending bills or lift the congressional ban on increasing U.S. energy production, but they did pass a sop to the trial bar — the cleverly misnamed the Paycheck Fairness Act. The bill is before the Senate.
The bill pretends to promote “gender equity.” Fat chance. Two laws, the Equal Pay Act and Title VII of the Civil Rights Act, already prohibit workplace discrimination against women and do so quite comprehensively.
But in the name of “equal pay for equal work,” the PFA would promote equal pay for grossly unequal experience. For instance, it would put the burden of proof on a business to show that it was impossible to pay equal wages to its male and female workers. Without such proof, as James Sherk of the Heritage Foundation points out, a newly hired woman could sue for the same wages as a man with 10 years of experience. She would need only claim that the employer should “provide her with intensive training to make up for the experience gap, and then pay her identical wages.”
Worse, the bill would for the first time make employers liable not just for intentional discriminatory pay practices, but for unintentional violations, too. It also would make it vastly easier to file “class action” lawsuits.
Finally, the PFA would remove limits placed by the Equal Pay Act on the amount of both compensatory and punitive damages that lawsuits could pry loose. Bigger damages mean juicier paydays for the trial lawyers, which in turn mean more campaign contributions for Congress.
A 2003 study by the Government Accountability Office found that most wage differences that appear to be gender-based actually are explained by work patterns: “fewer years of work experience,” “fewer hours per year” or “less likely to work a full-time schedule.”
Other studies, according to Sherk, have found that when work experience and similar factors are considered, “the average woman makes 98 cents for every dollar earned by a man.”
If PFA passes, the cost of business insurance will go up, as will the costs of litigation, all subtracting from the pool of money available for wages and salaries. But the trial lawyers would reap a bounteous windfall, which is, finally, the real purpose of PFA.
