Nel's New Day

April 9, 2013

Still Not Equal

Supposed you make $36,000 a year, and you could magically make $10,000 more. That miracle would happen if you could overcome the gender gap in earnings: on average, women make the $36,000, and men make $46,000. That difference was “celebrated” today on Equal Pay Day, the day when women’s last year’s wages catch up with men’s wages of one year. That’s how far women have to work into 2013 to earn as much as a man got paid by December 31, 2012.

There’s a bit of good news: Equal Pay Day came eight days earlier than last year. But there’s still bad news: it still took 99 days to do this because women’s earnings are 77 percent of men’s.

Despite the conservatives’ cry of family values, the lack of equal pay between men and women seriously affects families. A guest column for The Oregonian pointed out how the wage gap disproportionately affects mothers’ economic stability with the “motherhood penalty” approximated at 5 percent per child. The wage gap contributes out to the fact that “motherhood is a leading predictor of poverty in old age in our country.” In the United States, three-fourths of all mothers work outside the home with 40 percent of them the primary breadwinners.

Listen to the conservatives, and you might think that it’s because women don’t work as many hours or they just choose to stay at home more than men do. For full-time employees, 60 percent of the gap comes from work experience (10 percent), union status (4 percent), occupation choice (27 percent), and other differences such as maternity leave or child care. Another 25 percent comes from the difference between the high-valued male industries such as construction, manufacturing, and mining and lower-paid female-oriented service-sector or clerical positions.

Women still need more education to earn as much as men during their lifetimes. For example, a women needs a doctoral degree to earn the same as a man with a bachelor’s degree; a man with a high school education will earn about the same as a woman with a bachelor’s degree.

There remains, however, the unexplained gap of over 10 cents on the dollar, 40 percent of the difference, resulting in a shortage of $4,465 per year for that woman making the average salary of $36,000. It is this difference that could be corrected by passing the Paycheck Fairness Act and establishing a commission to address the gender pay gap, as Jane Farrell, Research Assistant for Economic Policy at the Center for American Progress, and Sarah Jane Glynn, Senior Policy Analyst at the Center, recommend.

The United States needs a National Equal Pay Enforcement Task Force that would bring together the Equal Employment Opportunity Commission, the Department of Justice, the Department of Labor, and the Office of Personnel Management to address barriers to pay equity and recommend solutions.

Of the 534 occupations listed by the Bureau of Labor Statistics, women earn more than men in exactly seven professions. These employ about 1.5 million women, about 3 percent of full-time female workforce.  In these seven occupations, women earn an average of 6.4 percent over men whereas in the occupations where men earn significantly more than women the difference is 39.5 percent.

The Paycheck Fairness Act is designed to update the Equal Pay Act of 1963. On her blog, Joanne Tosti-Vasey gives directions to get information about the status of the Paycheck Fairness Act. In the search box in the middle of the page, type in “Paycheck Fairness Act” and click search.  On the next page, two bills will show up—S. 84 and HR 377.  This page provides several links to information about both of these bills—text, bill history, co-sponsors, etc. If you click on “cosponsors” for each bill, you can determine if your representatives are publicly supporting the bill or not. If they are a sponsor, thank them and then ask them to call for a hearing on vote on the bill.  If they are not, ask them to sign on.You can check to see if your representatives in Congress have co-sponsored the bill.

If $10,000 doesn’t sound like much, think about the fact that this totals up to over $400,000 during the 40 years of work history. A woman would have to work almost 12 years longer to make up this gap. A typical woman working year round who starts, but does not graduate from high school, would have to work 17 years longer. AAUW (American Association of University Women) has updated The Simple Truth about the Gender Pay Gap, which includes state-by-state rankings of the pay gap, the pay gap by age, race/ethnicity, resources for fair pay advocates, and help for women facing workplace discrimination.

The Nation has seven ways to eliminate the wage gap between women and men:

End salary secrecy.  Half of all workers are discouraged or prohibited from telling their colleagues their salaries. You can’t sue for equal salary if you don’t know what it is.

Raise the minimum wage. About two-thirds of workers making minimum wage are women, and two-thirds of workers in tipped occupations are women. Those occupations often pay far less than minimum wage. Raising the minimum wage would mean raises for 28 million workers. Despite critics claiming that doing this would increase unemployment, a comparison between counties that raised and failed to raise the minimum wage shows no negative impact. Equal pay, including raising the minimum wage, would be a bonus to the country through stimulating the economy. Low-income employees immediately spend any additional wages on basics such as groceries, housing, transportation, and other expenses.

Fix the broken career pipeline. Men are far more likely to move to higher-paying positions than women despite parenting, experience, or aspiration.

Pass family leave policies. If men had to parent a much as women do, lawmakers would quickly pass paid family leave laws. Without these, women are the ones to stay home with children whenever necessary and the ones to lose wages for doing this.

Increase childcare support. Women’s careers can be disrupted by inability to get childcare, but higher pay and better benefits are correlated with a continuous work history.  If the government fully funded childcare programs, mother’s overall employment would increase 10 percent.

Encourage unionization. Increased unionization rates are correlated with a smaller wage gap, as much as 10 percent more. Non-union workers have twice as many problems with discouragement or prohibition in telling colleagues their wages as compared to union workers.

End occupational segregation. Women are not in higher unemployment because they are more likely to be public sector workers, an area that has lost over 800,000 jobs in the past four years. On the other hand, the number of manufacturing and construction positions has increased. Not only are there more jobs but these also pay more than public sector jobs.

In support of the Paycheck Fairness Act, Sen. Barbara Mikulski (D-MD) wrote:

“Nearly 50 years after the passing of the Equal Pay Act, women are still being redlined, sidelined and pink slipped because we fight for equal pay for equal work. Equal pay is not just for our pocketbooks, it’s about family checkbooks and getting it right in the law books.”

December 26, 2012

Fixing the Economy Again

Filed under: Uncategorized — trp2011 @ 8:52 PM
Tags: , , , , ,

Last week, House Speaker John Boehner (R-OH) shut off the lights and left town because he couldn’t manage his Republicans. The Tea Party members refused to consider any compromise, and the House couldn’t pass a budget proposal without them. Today President Obama returned to Washington from his holiday vacation in Hawaii, but Boehner is nowhere to be seen.

Yesterday I provided a fantasy approach of income equality that would solve the country’s deficit problem. Richard Eskow has a more pragmatic approach that might get passed.  The most important part of Eskow’s positions is to do away with what is called the “chained CPI” or “chained Consumer Price Index,” a strange approach to figure out a cost-of-living revision for Social Security.

At this time, Social Security payments are tied to the cost of living increases, meaning that it goes up based on how much prices go up. But the chained CPI has a peculiar twist. The higher the prices, the less people can afford to buy things so the lower the cost of living because they can’t afford these purchases.

For example, if the price of gasoline triples from $3.33 to $10 per gallon, then this is a 200-percent increase. But not with the chained CPI. Because people can’t afford $10 per gallon, they would buy less, which means that the cost of living increase is less than 200 percent because people aren’t buying it. Thus people get poorer and poorer, swelling from $1.4 billion in the first year to $122 billion by the tenth year.

If prices of anything goes up and people buy less, then there’s no inflation, according to chained CPI, because people don’t spend more. For example, if seniors eat pet food because they can’t afford the rising prices of chicken, then the government will pretend that seniors are doing fine because they can still buy food.

Tell the president and your House representatives to forget the chained CPI and do these instead. Notice how much more than the $122 billion from the Social Security “savings” that the country can put against the deficit.

  • Close multiple loopholes in the capital gains law – $174.2 billion: These include the “carried interest” loophole, which taxes hedge fund managers’ service fees at the low “investors’” rate; the ‘blended rate,’ which taxes some quick derivatives trades as if they were long-term investments; the ability to ‘gift’ capital gains to avoid taxation; a dodge for bartering capital gains; and the ability to ‘defer’ gains to future years.
  • Eliminate the capital gains altogether – $900 billion in savings.
  • Keep the president’s $250,000 figure for increased taxation – $183 billion: Changing this figure to $400,000 would reduce the deficit reduction impact by $183 billion.
  • Reduce the budget for U.S. overseas military bases by 20 percent – $200 billion: Dropping 702 of 4,471 military ‘installations’ in 63 foreign countries wouldn’t include bases in Iraq and Afghanistan, just those in nations such as Germany, South Korea, and Japan. The ten-year cost for these 4,471 bases is approximately $1 trillion. The waste in the Department of Defense is also high. For example, armed forces has 963 generals and admirals, 100 more than 9/11 when the Pentagon’s budget was half what it is now. A retired U.S. Army Colonel and military analyst said that the military needs only one-third of these high-ranking officers. The rest of them operate as lobbyists for the Pentagon while they have private jet rides and huge personal staffs that costs over $1 million—per general, totaling  $100 million just for those officials. U.S. taxpayers spend billions of dollars a year for  other luxuries. The Pentagon, for example, runs 234 golf courses around the world at an undisclosed cost. DoD’s Sungnam golf course in the Republic of Korea, meanwhile, is reportedly valued at $26 million. The military ski lodge and resort in the Bavarian Alps, which opened in 2004, cost $80 million. Marching bands also cost $500 million annually.
  • Allow the government to negotiate with drug companies – $220 billion: Current law specifically forbids the government from negotiating for lower rates for Medicare prescriptions  although the government paid for much of the research to develop the drugs.
  • Enact DoD-friendly cuts to military budget – $519 billion: Experts in the defense community came up with options that balanced short-term readiness with long-term preparation.
  • Enact Rep. Jan Schakowsky’s ‘Fairness in Taxation Act’ for very high earners – $872.5 billion: This solves the current tax structure that “fails to distinguish the merely ‘well-off’ from the ‘super-duper rich.’” It also taxes capital gains and dividend income as ordinary income for taxpayers with income over $1 million. Brackets would be as follows: $1-10 million: 45%; $10-20 million: 46%; $20-100 million: 47%; $100 million to $1 billion: 48%; $1 billion and over: 49%. The very wealthy would still pay much less than under Republican President Dwight D. Eisenhower, when the top rate was 91 percent as well as less than under most American presidents of the last century.
  • Eliminate corporate tax loopholes – $1.24 trillion: A 2007 Treasury Department report during George W. Bush’s second term concluded that “corporate tax preferences” (aka loopholes) lost $1,241,000,000,000 over a ten-year period.
  • Create a financial transactions tax for high-volume Wall Street trading – $1.8 trillion: The UK tax is 0.25 of each transaction, levied on both parties. Beyond the fiscal advantage, this might discourage the massive volume of ultra-high-speed computer-driven transactions that have turned the stock market into both an imperceptible “black box” and a real-time mega-casino operating in nanoseconds. “Algorithmic trading” doesn’t build economic value or encourage wise investment; instead it helped cause the 2008 recession.More than 200 economists have signed a letter supporting the concept of a financial transaction tax.

These solutions would bring in over $6 trillion in ten years rather than the $122 billion that cutting back Social Security would. The poor and middle class didn’t cause the problems with the economy; they shouldn’t have to pay for solving the problem. And people paid into Social Security. The money still exists; it’s just that George W. Bush took it to cover how high the deficit was becoming after he lowered taxes and started two wars.

Appropriations are something to watch during the next term. Sen. Barbara Mikulski (D-MD) will chair that chamber’s Appropriations Committee after the death of Sen. Daniel Inouye (D-HI. The position gives her power in setting the agenda for domestic spending, including policies that benefit women and families.

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