Obama-Endorsed Lilly Ledbetter “Fair Pay” Act Perpetuates Wage Discrimination Against Young

Obama-endorsed Lilly Ledbetter “Fair Pay” Act perpetuates arbitrary wage discrimination against the young

February 23, 2011

The Lilly Ledbetter Fair Pay Act endorsed by President Obama on January 25 purports to strike a blow against the notoriously low wages paid to women, nonwhite, and disabled workers performing the same job duties as male, white, and abled workers. In reality, it may worsen the already rising discrimination against 71 million workers under age 40–thereby perpetuating the very pay inequities it is designed to prevent

The current Fair Pay Act amends the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967, and to modify the operation of the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973 to add prohibitions on discriminating against female employees and ostensibly to strengthen provisions against paying workers less based on other arbitrary demographic characteristics, such as “age.” But the ban on age discrimination applies only to workers age 40 and older.

Thus, employers are not only free, but actually have an incentive to pay younger workers arbitrarily low wages for performing the same, or even greater, job duties than older workers. We are not talking about an employer offering higher pay based on greater experience that enhances an employee’s worth–the laws above don’t ban compensation based on merit or seniority in any case–but to arbitrary discrimination based solely on young age that has nothing to do with performance or capability.

Reducing the massive, growing wage gap between younger and older workers should be a critical pay equity priority. In 1950, Census tabulations show, Americans age 45-64 earned 34% more than workers aged 18-24;  in 2009, 144% more. Despite the greater educational status of young workers today compared to the past, workers ages 18-24 earn 14% less in constant dollars today than they did in 1970, while those age 45-64 earn 30% more in constant dollars.

The attrition against younger workers is made all the worse since tax cuts, heavily benefitting older and wealthier Americans, have resulted in cuts to public services such as education. The proportion of today’s college students who are forced to borrow to pay for their education has skyrocketed, and these students carry average loan debts of over $24,000 even as loan terms have diminished. Indeed, two-thirds of black and Hispanic students are rated as insolvent due to education debt. Further, housing prices that have risen faster than inflation in recent decades, depriving young people of vital stability founded in owning property.

Nor do younger workers have assets to cushion low incomes and high debt. Today, the median net worth of 30 year-olds is just $8,500, compared to $98,300 for 50 year-olds, $180,100 for 60 year-olds, and $232,000 for 80 year-olds.

The issue of wage and benefit discrimination against young workers has been exacerbated by the “two tiered” settlements between unions and management in such industries as auto manufacture that preserve high wages and benefits for older workers at the expense of slashing them for new hires. Again, this type of discrimination is not based on objective employee merit, but arbitrary schedules applied overwhelmingly to the young. Ironically, the result is likely to be continued, arbitrarily low wages and diminished benefits afforded female and nonwhite employees, who tend to be much younger than white and male employees on average. As the traditional union motto (no longer observed today) went, “An injury to one is an injury to all.”

The single biggest reason for today’s government budget crisis is the refusal by older, wealthier (including corporate) Americans’ to pay the share of their record wealth to support public benefit, especially for younger people, compared to older generations of the past. Rising public and personal debts are being dumped on the young at the same time their wages are subject to discriminatory cuts. Not only are tax increases targeting older and wealthier taxpayers a necessity, but pay equity guarantees should be extended to workers under age 40.

Employers are likely to raise the same bigoted arguments about how lazy and worthless “today’s” young people are–the same ones repeated studies have shown are unfounded, the same ones they have raised against young people for centuries, as well as against black, Hispanic, disabled, immigrant, and women workers in the past–but the president and Congress should extend pay equity to younger workers commensurate with their currently unwarranted claims of ending arbitrary pay discrimination against all Americans.