Biden’s historic stand with UAW members shows how far labor activism has come in America. True equal pay should be next on his agenda
In an unprecedented gesture, President Joe Biden recently joined the picket lines alongside the United Auto Workers (UAW), marking a first for a sitting president. This act, set against the backdrop of burgeoning labor activism this year and the persistent labor crisis in the U.S., sends a strong message. It’s a clarion call for labor equity and a hopeful harbinger of a new era in which the dignity of workers is upheld and economic opportunity is democratized. It beckons the next logical agenda on the Biden-Harris administration's list: addressing true equal pay.
What we have now in the U.S. can be described as “false” equal pay–in that it requires people who are experiencing pay inequity to speak up. By definition, if you are experiencing pay, it’s not your decision to be unpaid. True equal pay shifts the responsibility to companies to prove that they are paying their workers equitably.
Vice President Harris, during her presidential primary campaign, articulated a true equal pay proposal, an initiative estimated to inject an additional $180 billion into U.S. coffers–revenue that could be used to offset the cost universal paid and medical leave as well as affordable childcare. When I had the opportunity to interview then-candidate Biden, he emphasized that his "campaign has ensured addressing issues of gender is a priority in every policy proposal considered, from foreign policy to higher education to criminal justice reform.” The promise of prioritizing gender equity was clear and unequivocal.
The call for true equal pay resounds against the backdrop of a looming long-term labor crisis in the U.S. spurred by the nexus of industrial acceleration, a declining population, and the “she-cession.”
Today, 316,000 women remain absent from the labor force compared to pre-pandemic levels, while 1.4 jobs are available for every job seeker. We can bridge this labor gap by 13% if we can re-integrate these women back into the workforce, and to do that, we need to offer them equitable pay and opportunity. It would simultaneously increase consumer spending and reduce poverty levels. The cumulative economic benefits offer a pathway to a more robust and equitable economy.
It's an opportune moment to channel labor activism toward the most educated demographic within the U.S. labor force: women. Between 1970 and 2016, the surge in female labor force participation contributed $2 trillion to the US economy.
During President Obama's tenure, a stride towards equal pay was made with the initiation of the EEO-1 Component 2 form. This mandate required companies to report pay by gender and race/ethnicity, a first in U.S. history. However, true equal pay envisions extending Obama’s EEO-1 initiative by adding two critical elements: accountability and penalty. This proposal necessitates companies with 100 or more employees to secure an equal pay certification, validating the equal pay for equal work ethos. If discrepancies are found, a fine of 1% of profits would be levied for every 1% of wage discrepancy.
The fiscal implications of true equal pay are substantial. Apart from the direct $180 billion boost to public finances, closing the gender pay gap could channel an additional $512.6 billion into the U.S. economy while slashing the Social Security Savings gap by 35%. This not only alleviates the financial burden on taxpayers supporting companies that perpetuate pay inequity but also fortifies our economy’s foundation.
Today, the political landscape is fertile ground for such a paradigm shift. The 2020 elections witnessed the highest women's voter turnout, amplifying their voices in the political arena. Women, empowered by their voting rights, are poised to shape political discourse, advocating for policies that advance gender equity. True equal pay, therefore, isn't merely an economic or moral quest–but a resonating political agenda.
Several nations have successfully embarked on the path of equal pay, offering a blueprint for the U.S. Countries such as Iceland, with its pioneering equal pay certification and fiscal penalties for pay inequity, present a compelling argument for the viability of true equal pay. These case studies reveal a trajectory of enhanced productivity, innovation, and economic stability, embodying the multifaceted benefits of true equal pay. There are tangible benefits extending beyond the workplace into broader society: Iceland’s certification process has fostered increased communication about labor and bias. America would certainly benefit from the same discourse.
Now is the time for true equal pay. As we reflect on President Biden's solidarity with UAW, let's harness this momentum to foster a more equitable and prosperous America. The endeavor for true equal pay isn't a mere quest for equity–it's an expedition toward unleashing boundless economic opportunities. The current administration has the blueprint, the political impetus, and a historic mandate to steer America towards a horizon where equal pay is the cornerstone of a thriving, inclusive economy. Through the prism of equal pay, we glimpse into a future where economic opportunity is not a privilege of the few but the right of the many.
Katica Roy is the CEO of Pipeline.
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