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WOMEN - - - ~ - - ~ - ~ - ·~e Equal Pay forJobs of Equal Value _ _ Donald J. Treiman and Heidi I. Hartmann - Editors Committee on Occupational Classification and Analysis Assembly of Behavioral and Social Sciences National Research Council NATIONAL ACADEMY PRESS Washington, D.C. 1981
Nstio~l Academy Press 2101 Co~tudon Avenue, N.W. Washroom, D.C. 20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council. whose members are drawn from the councils of the National Academy of Sciences. the National Academy of Engineering. and the Institute of Mcdicinc. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to pro- cedurcs approved by a Report Review Committee consisting of members of the National Academy of Sciences. the National Academy of Engineering. and the Institute of Mcd Ic~nc. jibe National Research Council was established by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy s purposcs of furthering Icsowledge and of advising the federal government. The Council operates in sccordanec with general politics determined by the Academy under the au" thority of its congressional charter of 1863. which establishes the Academy as a private. nonprofit. self-governing membership corporation. The Council has become the principal operating agency of both the National Academy of Sciences and the blational Academy of Enginecnag in the conduct of their services to the government, the public. and the scicatific and coginecnag communities. It is sdministcrcd join~ly,by both Academics and the Institute of Medians. l~c National Academy of Enginecnag and the Institute of Medicine were established in 1964 and 1970, respectively. under the charter of the National Acedemy of Sciences. This report was prepared under contract to the V.S. Equal Employment Opportunity Commission. We report. Downer, does not necessarily represent the official opinion or policy of the Equal Employment Opportunity Commission or any other agency or official of the federal government. Library of Congress Catalog Card Number 81-82863 International Standard Book Number ~309-03177-X Fint Prong, Augun 1981 Salt Peg, I:~ruuy 1982 Third Pig, Any 1984 ]:~ Prong, October 1986 Ash Prig, Our 1987 Sixth Pig, Joy 1990 Printed in the United States of America
COMMITTEE ON OCCUPATIONAL CLASSIFICATION AND ANALYSIS ANN R. MILLER (Chair) Population Studies Center, University of Pennsyl; ania DAV] D P. CA ~ PB E ~ ~ . Vice President of Research and Programs, Center for Creative Leadership MARY C. DC'N'bAP. Attorney at Law, San Francisco G . FR A ~ K E ~ ~ E D ~ A R D S . Department of Sociology and Anthropology, Howard University RICHARD C. EDU'ARDS. Department of Economics, University of Massachusetts LEON' FESTINGER. Department of Psychology, New School for Social Research GARY D. GOTTEREDSON. Center for Social Organization of Schools, The Johns Hopkins University JOHN A . HA RT] G A ~ . Department of Statistics, Yale University DORIS P. HAY~OOD. Vice President, Human Resources, Metropolitan Life Insurance Company WESLEY R. LlEBTAG. Director of Personnel Programs, International Business Machines Corporation ROBERT E. B. LUCAS Department of Economics, Boston University KAREN OPPENHElM MASON. Department of Sociology and Population Studies Center, University of Michigan ERNEST I. MCCORMICK, Professor Emeritus, Department of Psychological Sciences. Purdue University GUS TYLER. Assistant President, International Ladies' Garment Workers' Union · . .
Contents PREFA CE I INTROD U CTI ON Current Legal Context, 3 The Issues, 7 Plan of the Report. 11 2 EVIDENCE REGARDING WAGE DIFFERENTIALS The Existence of usage Differentials, 13 The Effect of Worker Characteristics on Differences in Earnings. 17 The Effect of Job Charactenstics on Differences in Earn- ings. 24 Conclusion, 41 Technical Note, 42 3 WAGE DIFFERENTIALS AND INSTITUTIONAL FEATURES OF LABOR MARKETS Labor Markets, 44 Comparable Worth and Internal Labor Markets, 4S Segmentation of the Labor Market, 47 Job Segregation, 52 Choice, 53 v ax 1 13 44 -
Vl Exclusion, S5 Underpayment of Moments Work, 56 Discnmination in Labor Markets, 62 Conclusion, 65 4 WAGE-ADJUSTMENT APPROACHES TO OVERCOMING DISCRIMINATION Introduction, 69 Conventions Job Evaluation Approaches to Assessing Pay Rates, 71 Methods of Job Evaluation, 71 Factors and Factor Weights, 74 The Role of Judgment, 77 Multiple Job Evaluation Plans in a Single Firm, 78 Modeling and Measurement, 80 Summary, 81 Statistical Approaches to Assessing Pay Rates, 82 Including 'iPercent Female" in the Estimation of Pay Rates, 83 Jobs Held by White Men as a Standard, 86 Using Statistical Procedures to Correct Discriminatory Pay Rates, 87 Conclusion, 89 CONCLUSIONS The Extent and the Sources of Pay Differentials, 92 Identifying and Eliminating Pay Discrimination, 94 Job Evaluation Plans, 95 REFERENCES SUPPLEMENTARY STATEMENT Gus Tyler MINORITY REPORT Ernest I. McCormick BIOGRAPHICAL SKETCHES OF COMMITTEE MEMBERS AND STAFF Contents 69 91 97 107 115 131
Tables and ~- rlgures Tables Mean Earnings of Year-Round Full-Tune Civilian Workers 18 Years Old and Over, 1978 Mean Annual Earnings of Year-Round Full-Time Workers by Education, Race, and Sex, 1978 Median Income of Year-Round FuIl-Time Workers by Sex and Race, l9S~1978 4 Summary' of Studies Accounting for Sex Differences in Earnings on the Basis of Worker Characteristics Only 5 Decomposition of else wage Differential Between Em- ployed 'White Men and White Women 6 Occupational Distribution Over Major Occupational Groups by Race and Sex, 1979 7 Occupational Segregation Indices, 194~1970 Annualized Median Earnings by Sex for Census Major Oc- cupation Groups, 1970 9 Decomposition of Earnings Differentials Between Men and Women into Within-Occupation and Between-Occupation Components. for Successively More Detailed Occupational Classifications (1980 Census Data) 10 Summary of Studies Accounting for Sex Differences in Earnings on the Basis of Worker Characteristics and Job Characteristics 11 Percent Female by Occupational Grade (GS Le~cI) In the . . V11 14 15 16 20 23 26 27 32 34 36
· . . VUI Tables Federal Civil Service for Full-Time, White-Collar Employ- ces of Federal Government Agencies, 1977 12 Distribution of Earnings in Selected Occupations in the Newark Metropolitan Area, January 1980 13 Decomposition of Earnings Differentials of Men and Women Among Managenal Personnel in a Large Public Utility Company 14 Wage Rates at a Westinghouse Plant, 1943 15 Hourly Wage Rates Before and After the 1972 General Electric Settlement, Fort Wayne, Indiana Tables and Figures Figures Relationship Between Percent Female and Annualized Me- dian Earnings of Incumbents for 499 1970 Census Occupa- tional Categories 2 Scatterplot of Monthly Salaries by lob Worth Points, for 59 Jobs Held Mainly by Men and 62 Jobs Held Mainly by Women in the Washington State Public Service 41 49 56 58 60 29 61
Preface The Committee on Occupational Classification and Analysis was es- tablished by the National Research Council in response to requests for assistance from two agencies of the federal government: the Department of Labor asked for an external assessment of its work in the area of occupational classification, in particular as that work is related to the development of the Dictionary of Occupational Tales; and the Equal Employment Opportunity Commission (EEOC) asked for an exami- nation of the issues involved in a "comparable worth" concept of job compensation. Our earlier report (Miller et al., 1980) presented the restarts of our review for the Department of Labor; this report deals with the issues raised by the EEOC. The issue of "comparable worth" has joined the ranks of those social controversies about equity that have come to the forefront of public discussion in recent decades. As do many of those controversies, it Involves questions about the operation of economic institutions, and advocates of `'comparable worth" have called for interlocution to redress the inequity they perceive to be embedded in the present situation. In essence, the point made is that, within a given organization, jobs that arc equal in their value to the organization ought to be equally oom- pensated, whether or not the work content of Pose jobs is similar. The impetus for the formulation of the "comparable worth" concept has come pnmanly from the substantial differences in the ties of jobs held by men and by women and from the belief that those traditionally held by women receive lower compensation because they arc hcId by women. Fix
x Preface The committee took as its first task a review of what might be called "the state of the question." Early meetings were largely occupied with discussions of whether we were addressing a legitimate question and of how we might establish whether we were. We recognized that we were dealing with topics that have a long history among the concerns of social theorists and that continue to present unresolved problem~that is, the allocation of labor and the allocation of rewards for that labor. But the particular context within which these issues are being raised now is new, and the committee consequently spent considerable time establishing the approach to take. We decided that we had to examine the earnings differentials between men and women and then the operation of the labor market. During this period the staff prepared a number of informal memoranda on topics ranging from international approaches to equal pay for work of equal value to guidelines for improving job evaluation procedures. As we proceeded, it became clear that we needed a thor- ough review of the features of job evaluation plans in order to assess their relevance to discussions of comparable worth. That review was the substance of our interim report (Treiman, 1979~. Very gradually a con- sensus on what other evidence was pertinent and required review also emerged. We format of the report renects this consensus. A major portion of our early discussion focused on whether, in fact, the existing wage rate is a good approximation of the worth of a job. Our ultimate view, as descnbed in Chapter 3 and summarized in Chapter 5' is that the sub- stantial influence of institutional and traditional arrangements makes it impossible to view current wage rates as set solely by the free play of neutral forces operating in an entirely open market, no matter how attractive such a theoretical formulation may be. Our examination of the outcomes- that is, the earnings differentials, reviewed in Chapter 2 and the processe~the arrangements by which workers are allocated and wages are set, covered in Chapter bled us to that judgment. Moreover, the widespread use of job evaluation plans as aids in deter- m~ning wage rates appears to us implicitly to confirm our judgment. Both of the committeets assignments~he review for the Department Of Labor and that for the Equal Employment Opportunity Commis- sio~are relevant to issues that continually arise in the operating de- cisions of persons charged tenth making the arrangements by which the conditions of employment are set. Both also are relevant to the theo- retical and empirical analyses conducted within the frameworks of sev- eral somal science disciplines. Lee members of the committee were selected for the diversity of their experience in facing both aspects of these issues. Several have had extensive expenence in formulating and
Preface Xl administenng personnel policies. in negotiating the structure of union- management agreements. and in other closely related activities. Both their operational expertise and their comprehension of the relationship between operational and theoretical aspects were extraordinarily help- ful. Our academic members brought the diverse emphases of their dis- c~plines as ~ ell as their technical backgrounds in the analysis of data to bear on our discussions in a way that illuminated key factors. One member. Ernest McCormick, has prepared a minority report presenting his disagreement with the committee report on two issues. One relates to the committee s conclusions that institutional and tra- ditional arrangements often play a major role in setting current wage rates. The second point of dissent relates to the material covered in Chapter 4. The details of the procedures described by McCormick were presented to the committee on several occasions. It was the committee's decision that no detailed exposition of any job evaluation plan belonged in the final report. W?e are presenting onIs the essential principles gov- erning those systems that have been used by American fins, and we refer the reader to our interim report for further details and for refer- ences to a number of specific proprietary procedures. This volume also includes a supplementary statement prepared by one member. Gus T`ler, and endorsed by a second, Mary C. DunIap. Although both members support the committee's report, they believe that the issue with which the report deals the comparable worth of jobs within an individual firm is too narrowly focused to have a major impact on the root causes of pay differentials' which, in their view, involute much broader issues. They recognize, however, that it would not be proper for the report itself to raise these issues. This has not been an easy report to prepare. ~ am extremely grateful to the staff. particularly the two editors of the report, Donald ]. Treiman and Heidi I. Hartmann. for the quality of their work and for their patience in responding to the diverse requests dunng the long prelim- inary period in which the committee was developing the structure of the report. Patricia A. Roos was particularly helpful in seeing to the myriad details involved in the last stages of completing the report. Four other members of the committee staff. Benita A. Anderson, Pamela S. Cain, June Price, and Charles F. Turner' whose work was primarily on our report to the Department of Labor, also contributed in many ways to the creation of this report. And Rose S. Kaufman earned the gratitude of all of us for the skill with which she arranged our meetings and the processing of our innumerable drafts. ~ should also like to express my appreciation to the remewers of earlier ctrafts of this report. The questions they raised and the points they found
· . Xtl Preface troubling helped to reveal where the report had failed to state the com- mitteets intent clearly and enabled us to make necessary revisions. My thanks go, too, to Eugenia Grohman and Christine L. McShane, editors on the staff of the Assembly of Behavioral and Social Sciences, for their major contributions in cianfying the text. Finally, ~ come to my fallow committee members. The commitment, perseverance, and patience they devoted to the preparation of this report cannot be adequately acknowledged in a few short words. Their support was unfailing, and it was a great pleasure to me to work with them all. Ann R. Miller, Chair Committee on Occupational Classification and Analysis