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President signs order to promote equal pay

President Obama signed an executive order this week requiring all federal contractors to publish data about their wages with gender and racial breakdowns included, so that companies that pay women or minorities less on average will have an incentive to change their practices to eliminate this disparity. The executive order also bans government contractors from retaliating against employees who discuss compensation with their coworkers, since pay tends to be more equal in workplaces where colleagues are permitted to talk about pay.

This is a positive move towards equal pay for equal work across the board, although it is important to note the limits of the executive order. Most significantly, this applies only to companies that currently have or plan to bid for government contracts. This implicates a broad cross section of the economy and has the power to influence corporate policies in general, but does not impose a requirement on all employers.

The fact that women make only 77 cents for every one dollar a man makes has wide-ranging impacts, making it more difficult for single mothers to provide for their families, reducing retirement savings, and keeping more disposable income out of the retail sector. Many experts have said that equalizing pay would infuse significant cash into the economy, helping the recovery from the recession.

Advocates continue to push for the Fair Paycheck Act, a proposed law that would close many of the loopholes left by the Equal Pay Act of 1963 and the Lilly Ledbetter Fair Pay Act, passed in 2009.

Source: Al Jazeera America, “Obama Signs Executive Order on Equal Pay For Women,” Lisa De Bode, April 8, 2014. 

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