Chapter 12 Notes

Effectiveness of the Government's Anti-Discrimination Effect

It is highly likely that the impact of the Equal Pay Act is fairly minimal • Men and women rarely do exactly the same kind of work in the same firm • Still important as occupational segregation has declined The empirical work looking at the effectiveness of Title VII and the Executive Order are less conclusive, due to the difficulty to isolate the effect of legislation regulations, and major Court decisions from other changes that occurred

Underutilization

Discrimination is also inefficient to the extent that it results in the underutilization of women's talents and abilities • Qualified women are not hired for or promoted into higher-level positions o And consider the feedback effects • If women are deterred from investing in their human capital because of discrimination, society loses a valuable resource

Rationales for Government Intervention

Government policies to combat labor market discrimination against women can potentially be justified on at least two grounds: 1. Equity or fairness- "a matter of simple justice" • An effort to assure equal treatment for all participants in the labor market, regardless of gender (or race, ethnic origin, etc.) 2. Efficiency • Unequal treatment on the basis of gender may result in an inefficient allocation of resources • As in the overcrowding model, equally productive men and women are hired for different jobs and women's jobs are lower paid • The "price" of labor does not accurately indicate the value of women's productivity • Compared to the non-discriminatory situation, society produces "too little" of outputs that use "overprices" male labor and "too much" of outputs that use "underpriced" female labor

Employer's Liability

Sine sexual harassment generally results from interactions between employees, when are employers held liable for the actions of their employees? In 1998, the Court extended the employer's liability beyond just knowing (or should have known) that the harassment had taken place, making it clear that employers bear the fundamental responsibility for preventing and eliminating sexual harassment from the workplace The Court also ruled that employer's liability is absolute in cases of quid pro quo harassment, when "a tangible employment action, such as discharge demotion or undesirable assignment" In hostile work environment cases (no tangible action), an employer could still be liable but can defend itself by establishing that it took "reasonable care to prevent and correct promptly and sexually harassing behavior" and that the employee "unreasonably failed to take advantage of any preventive or corrective opportunities" provided • A strong, well-publicized employer policy against harassment coupled with an effective grievance (complaint) procedure is a good start for employer's to safeguard themselves from liability o Must be effectively communicated to employees; complaints are promptly investigated; and corrective action, where merited, is promptly taken

Affirmative Action Impact

Smaller studies focusing on affirmative action find modest employment gains • the immediate post-1964 period (the gender pay ratio remained basically flat until 1980) • Relative wages of women have increased in establishments using affirmative action o These establishments tend to be higher paying Sex differences in wages are smaller in these establishments Perhaps the rise in the 1980s could be due at least in part to anti-discrimination laws and regulations, which took some time to have an effect • Direct effect: Improving the treatment of women in the labor market • Indirect effect: Increasing the incentives for women to train for non-traditional jobs

Title VII of the Civil Rights Act

Title VII of the Civil Rights Act was passed in 1964 • Originally written to prohibit discrimination in employment on the basis of race, religion, and national origin, but was amended at the last minute to include the word sex • Prohibits discrimination in virtually all aspects of employment, including hiring and firing, training, promotions, wages, fringe benefits, or other terms and conditions of employment • Covers all businesses employing 15 or more workers, including federal, state, and local governments and educational institutions • Also prohibits discrimination by employment agencies and labor organizations The Equal Employment Opportunity Commission (EEOC) is the federal agency charged with enforcing the Equal Pay Act and Title VII

Bona Fide Occupational Qualifications

Title Vii permits exceptions to its ban or gender discrimination when sex is found to be a bona fide occupational qualification (BFOQ) • In the mid 1960s, the interpretation of this exemption by the courts was extremely important o If interpreted broadly, considerable gender discrimination would have been permissible under Title VII, to match the social views of the day

Affirmative Action

Affirmative Action: A set of proactive policies established by the firm that seek to provide equal employment opportunities and "to erase differences between women and men, minorities and non-minorities, etc." Contractors are required to analyze their employment patterns to determine where women and minorities are underrepresented • When deficiencies are found, they are required to set up "goals and timetables" for the hiring of women and minorities and to make good faith efforts to reach their goals in the specified period The Executive Order is enforced by the Office of Federal Contract Compliance • Violators face the possible loss of their government contracts, although this sanction is seldom invoked

Costs?

As with any decision, you want to weigh the benefits against the costs What are the costs to increased government intervention against discrimination? • Some who are skeptical of the evidence of labor market discrimination may think that this government intervention is too high of a cost • Some may also fear anti-discrimination policies will go too far, possibly in the form of reverse discrimination or preferential treatment for women and minorities • reverse discrimination or preferential treatment for women and minorities o Research to date provides no evidence that the increased employment of women and minorities has resulted in this

BFOQ Exemptions

Both the EEOC and the courts have taken the position that the BFOQ exception should be interpreted narrowly • Men and women are entitled to consideration on the basis of their individual capabilities, rather than on the basis of characteristics generally attributed to the group The BFOQ exemption has been rejected for: • Predominately male jobs in which heavy lifting is required • Predominately female position of flight attendant where it was argued by the employer that airline passengers preferred women in the job • Jobs that bar all women of childbearing age where they would work with substances that might be hazardous to a developing fetus In 1977, Dothard vs. Rawlinson case, the Supreme Court allowed the hiring of only males for the position of prison guard in Alabama's maximum-security male prisons • The Court reasoned that due to the nature of the prison population, as well as the atmosphere of the prison, women would be particularly subject to sexual assault, which would interfere with their job performance The case was not resulted in substantially greater acceptance by the courts of the BFOQ exemption for other jobs

Disparate Treatment and Disparate Impact

Disparate Treatment: Differential treatment of a group, such as women or minorities, with the intention to discriminate • Clear violation of Title Vii A more complex issue is unintentional discrimination • This type of discrimination arises when apparently neutral practices or policies of a firm, say with regard to hiring or promotion, result in a disparate impact on women or minorities o Have disproportionately adverse effects Once the plaintiff show that the practice creates a disparate impact, the burden of proof shifts to the employer to show that the requirement is job related

Effects of Title VII

In Chapter 7, when we reviewed the trends in the male-female pay gap we saw that • African Americans experienced considerable increases in their earnings relative to whites in the immediate post-1964 period that can be attributed to anti-discrimination laws • Whereas, there is no indication of improvement in women's earnings relative to men in the immediate post-1964 period (the gender pay ratio remained basically flat until 1980)

Equal Employment Opportunity Laws and Regulations

In the 1973 case of Frontero vs. Richardson, the Supreme Court ruled that the benefits given to the family of United States military service members cannot be different based on race • Justice Brennan: "Traditionally, discrimination was rationalized by an attitude of romantic paternalism which in practical effect put women not on a pedestal but in a cage." The 1960s laid the groundwork for legislation and regulations that are most pertinent to women today • Equal Pay Act • Title VII of the Civil Right Act • Executive Order 11246, which laid the foundation for affirmative action

Major Court Decisions and Legislation that Have Shaped the Equal Employment Laws and Regulations

In the years since their passage and implementation, these laws and regulations have been interpreted and clarified by the courts, all the way to the U.S. Supreme Court, the final arbiter Title VII of the Civil Rights Act, being the broadest law and the centerpiece of the federal government's anti-discrimination enforcement effort is especially affected • The Court's interpretations of the law changed as the membership on the Court shifted, and is likely to continue to be the case in the future

Sexual Harassment

Sexual Harassment: Encompasses a broad range of objectionable behaviors ranging from quid pro quo harassment to various actions that are sufficiently offensive to result in a hostile work environment • Quid pro que example: Making sexual demands where a refusal results in dismissal, the loss of promotion, reduced benefits, or other adverse actions In a 1986 Supreme Court decision held that sexual harassment is illegal under Title VII if it is unwelcome and "sufficiently sever or pervasive to alter the conditions of the victim's employment and create an abusive working environment." In 1993, the Supreme Court clarified what constituted evidence of a hostile environment • A hostile environment is one that a reasonable person would perceive to be "hostile or abusive"

1991 Civil Rights Act

The Civil Rights Act was reauthorized in 1991 and several provisions were added • Permits women to obtain compensatory and punitive damages for intentional discrimination o Prior to this law, only racial minorities had such rights • Allows discrimination cases to be argued before juries as well as judges These changes made it more likely that private law firms would be willing to take on sex discrimination cases, particularly class action cases

Rulings Regarding Sex Plus Another Characteristic

The Court has also found in a number of cases that sex cannot be used in combination with some other fact as a legal basis for discrimination under Title VII The Court has held that • An employer cannot refuse to hire women with preschool-age children while men with preschool-age children are hired • It is illegal to pay women lower monthly pension benefits than men o The other factors here was longevity Women, on average, live longer

Equal Pay Act

The Equal Pay Act of 1963 requires employers to pay the same wages to men and women who do not substantially equal work, involving equal skill, effort, and responsibility, and performed under similar conditions in the same establishment • Illegal to have separate pay scales for men and women doing the same job • Only applies to wage discrimination for the same job in the same firm • Does not address the discrimination in hiring, promotion, training programs, and so on

Executive Order 11246

The Executive Order 11246 issued in 1965, and amended in 1967 to include sex, bars discrimination in employment by all employers with federal contracts and subcontracts • Requires that firms with federal contracts or subcontracts that have more than 50 employees and $50,000 in contracts take "affirmative action" for classes of workers disadvantaged by past discrimination