“I am delighted today to approve the Equal Pay Act of 1963, which prohibits arbitrary discrimination against women in the payment of wages. This Act represents many years of effort by labor, management, and several private organizations unassociated with labor or management, to call attention to the unconscionable practice of paying female employees less [sic] wages than male employees for the same job.”
John F. Kennedy made these remarks upon signing the Equal Pay Act of 1963 into law. As he signed the Act, he went on to acknowledge the road to full economic equality was long and far from over, saying, “While much remains to be done to achieve full equality of economic opportunity — for the average woman worker earns only 60 percent of the average wage for men — this legislation is a significant step forward. Our economy today depends on women in the labor force.”
The History of Equal Pay
The number of women in the labor force shifted dramatically after World War II. Prior to the war, women accounted for less than 24 percent of the civilian workforce in the United States. During the war, however, acute labor shortages drove more women into the workforce until they accounted for 37 percent in 1945.
At this point, women typically earned less than their male counterparts for the same work. This is the origin of the gender wage gap. Because of the labor shortage that resulted when more men joined the military and more women took over their jobs for less pay, men began to worry they would be replaced by women permanently. Thus, the fight against the gender wage gap began not because of the belief women deserved to earn equal pay for equal work, but because men didn’t want women taking over their jobs after the war ended. Unions began advocating for equal pay to prevent employers from lowering wages for men in the future. In 1942, the National War Labor Board issued a General Order for men and women to earn equal pay for work that was of “comparable quality and quantity.”
After the war ended in 1945, women in the labor force faced huge setbacks. Many federal and civilian policies allowed employers to replace women workers with men. Additionally, most companies would hire only men and companies that did continue to employ their women workers reclassified their jobs in order to pay them lower wages. Job listings were published according to jobs for men and jobs for women, and sometimes identical jobs would be published for either sex, with different pay scales for each. By the end of the 1940s, the number of women working outside of the home dropped to 28 percent.
Throughout the 1950s, multiple equal pay bills were debated in Congress, but each failed to be enacted into law. More and more women joined the labor force until by 1960, more than 25 million women were working and women again accounted for 37 percent of the workforce in the United States. Yet still, they earned just $0.59 to every dollar earned by men.
This discrepancy was the catalyst that led to John F. Kennedy signing the Equal Pay Act of 1963.
Esther Peterson: The Woman Who Drafted the Equal Pay Act of 1963
One of the key activists in the fight for equal pay was Esther Peterson. In 1944, she became the very first lobbyist for the National Labor Relations Board, which started her path as a labor activist. In 1961, Peterson was appointed as the director of the Women’s Bureau in the Department of Labor. According to the National Park Service, “At her urging, President Kennedy established the Presidential Commission on the Status of Women to develop recommendations for achieving equality. She gathered data, built coalitions, and won over opponents in a successful campaign to bring an Equal Pay Act before Congress. In February of 1963, Esther Peterson submitted a draft bill of an Equal Pay Act to Congress on behalf of the Kennedy administration.”
At first, the wording of the bill was equal pay for “comparable work,” but eventually the language changed to “equal work,” which encompassed “jobs requiring equal skill, effort, and responsibility, and which are performed under similar working conditions.”
Addressing Objections to The Equal Pay Act of 1963
Many business leaders and groups, including the Chamber of Commerce and the National Retail Merchants Association, opposed the Equal Pay Act because they believed women in the workforce were more expensive to employ, specifically due to the higher rate of turnover and absenteeism due to having and raising children.
These communities also argued against the Equal Pay Act because they believed it should be a states’ issue, not mandated at the federal level.
In order to quell these objections, the Equal Pay Act was added as an amendment to the Fair Labor Standards Act (FLSA). The Fair Labor Standards Act included a minimum wage, guidelines and regulations around overtime pay, and encompassed most public and private employment. The FLSA also clearly laid out penalties for violation of any of these standards.
Once these changes had been made, The Equal Pay Act passed and was signed into law on June 10, 1963.
Equal Pay and the Gender Wage Gap Today
The Equal Pay Act was one of the most significant pieces of legislation in our country’s history, though even President Kennedy acknowledged it was only a small step toward true equality. In 1964, the Civil Rights Act further strengthened laws for gender equality and made it illegal for employers to discriminate on the basis of sex, race, religion, and national origin. To learn more about the impact of the Civil Rights Act of 1964 on the racial wage gap, read our article on Martin Luther King Jr. and the fight for pay equity.
So, where do we stand today when it comes to the gender wage gap? As previously mentioned, women in 1963 earned $0.59 for every $1 a man earns. Today, women earn $0.80 for every $1 a man earns. However, the gender wage gap is closing more slowly. The Global Gender Gap Report of 2020 predicts it will take 99.5 years for the gender wage gap to close at the current rate of change.
The previous figures represent the uncontrolled, or raw, gender wage gap, which looks at the median salary for all workers without taking job type or seniority into account. When PayScale looked at the controlled gender wage gap, which measures the median salary for all workers with the same job and qualifications in United States, women earn $0.98 on the $1 every man earns. Simply put, equal pay for equal work still isn’t the reality for most workers today.
Pay Transparency Could Close the Gender Wage Gap
PayScale’s new report, Does Pay Transparency Close the Gender Wage Gap, says, “A $0.02 difference may seem small, but it is statistically significant, especially when you consider that pay discrimination has been illegal since 1963. Compounded over a lifetime of work, small differences add up. A study by the National Women’s Law Center showed that women stand to lose $406,760 over the course of a 40-year career at the uncontrolled wage gap of $0.80.”
So, what could close the gender wage gap? The answer is pay transparency. Our new research finds that women who agreed pay was transparent at their organization earn between $1 and $1.01 on average for every $1 a man earns.
This doesn’t mean your organization must immediately publish every employee’s salary publicly. There is a spectrum for pay transparency, as you can see in the chart below:
To learn more, check out our ebook about the PayScale Pay Transparency Spectrum.
Closing Thoughts on Equal Pay
Esther Peterson would likely be pleased with the progress that has been made in the years since a mass influx of women entered the workforce during World War II. However, we must not allow ourselves to look at a $0.02 wage gap for equal work and think, “Meh, close enough.” This is a statistical average, meaning that some organizations, possibly many, do much worse. We have the opportunity to continue the work of Peterson, Kennedy, and countless others who fought for pay equity for all workers, regardless of gender, race, religion and more.
Check out our latest report on how Pay Transparency Closes the Gender Wage Gap to learn more about the impact of pay transparency on pay equity. Download the whitepaper today
