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Make Corporate America Pay for Underpaying Women

The gender wage gap has stagnated because the system leaves it up to female workers to fight for fairness.

Spencer Platt/Getty Images

In 1980, women in America made 60 cents for every dollar men earned. By 2001, it had climbed to 76 cents. At that pace, women’s wages today should be around 90 percent of men’s. Instead, they’ve barely cracked 80 percent.

The causes of the gender pay gap and its stagnation are varied, but it’s clear that greater awareness of the problem—and the occasional shaming of particularly egregious corporate offenders—won’t be enough to solve the problem. Closing the gap will require action, with teeth, from Washington.

To that end, Democratic presidential candidate Kamala Harris on Monday released “Holding Corporations Accountable for Pay Inequality in America,” a plan that has the potential to fix at least one major hurdle: The current system leaves it almost entirely up to individual women to fight for equal pay, and gives them little firepower to do so.

Harris wants to put the onus of ensuring fair pay on employers instead. She would require companies with 100 or more workers to get an “equal pay certification” every two years or face fines. A failure to comply—that is, if they continue to pay men and women differently for performing “work of equal value,” based on their job titles, experience, and performance—would cost a company 1 percent of its profits for every 1 percent difference. Companies would also have to publicly disclose whether they met the certification.

The California senator proposes a number of other fixes, such as banning employers from asking job candidates about their past salaries, banning forced arbitration (which pushes discrimination claims out of the public court system), ensuring that employees are allowed to discuss pay, and requiring companies to report the share of women in their leadership ranks.

Even if Harris were to win the presidency, Congress is highly unlikely to pass her plan, given that the much milder Paycheck Fairness Act, which would ban salary secrecy and the use of salary histories while beefing up existing protections, has been repeatedly introduced in Congress and yet never advances. So as president, she’s promising to take executive action to impose the same requirement on government contractors, which employ about 28 million people.

Right now, if a company is unfairly paying female employees less than male ones, it only faces potential penalties if it’s sued by one of its female employees. To bring a lawsuit, though, a woman has to know that she’s not being paid the same as her male colleagues who are doing similar work. That’s often hard to know, given that about half of Americans say they’re either discouraged or banned from discussing pay at work. Lilly Ledbetter, for whom the Lilly Ledbetter Fair Pay Act was named, didn’t find out she was making less than the men she worked with until she got an anonymous letter in the mail.

If she does manage to find out she’s not being paid fairly, a woman then has to decide to put her time and resources into a lawsuit. She risks retaliation, a common response to claims of discrimination, which could mean being fired and even blacklisted in her line of work. Lawsuits take years, sometimes decades, to resolve. And after all of that, most women don’t succeed: About two-thirds of the equal pay cases brought through the Equal Employment Opportunity Commission ended in favor of the employer, not the employee.

Other countries have already taken this kind of aggressive action on the gender pay gap. Iceland recently became the first country in the world to require companies to prove that they pay women and men equally. France plans to fine companies that don’t close their wage gaps. Even the U.K., which doesn’t go quite as far, still requires companies to publicly disclose their gender wage gaps every year. An Obama-era rule requiring American companies to report their wage gap data to the EEOC, not even to the public, ran into so much resistance that the Trump administration froze it. (A judge recently cleared the way for it to go into effect.)

The U.S. has its own past experience to draw on when considering Harris’s idea. In the 1970s and ’80s, there was a movement in state governments to ensure that women doing similar government work as men, even in different jobs, were paid equitably. Twenty states decided to regularly audit their own pay scales and dole out raises to bring things in line. They spent $527 million adjusting pay for more than 335,000 women and in the process eliminated 20 percent of the wage gap. A nationwide effort could have closed it even further.

Crucially, these efforts didn’t require any action from the women themselves; every few years, the state government would assess its own pay scales and make any necessary adjustments. But those programs were slowly abandoned over the years, and only Minnesota seems to be the state still conducting regular audits.

It’s been illegal, at least on paper, to pay women and men less for the same work since the 1960s. And yet, women make less than men in nearly every job. Even when economists eliminate factors like job experience—which itself can be informed by different societal pressures on women to cut back on work to care for their families—a portion of the gap remains unexplained.

Every Democratic candidate for president ought to have ideas for how to fully close it. Harris’s plan has set the bar for them.