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Gender pay gap creates ‘second class citizenship for women': Lilly Ledbetter

Kristin Myers
·6 min read
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The gender pay gap causes women to have huge pay losses that continue through retirement, equal pay activist Lilly Ledbetter told Yahoo Finance.

“It's really a second class citizenship for women like myself for the rest of their life,” she said. “And that's what so many young women do not understand that's out there working today, that if you do not get equal pay or your rightful pay, it's gone forever because it affects your retirement, your 401Ks, your contributory retirements, and Social Security or any other program you might be involved in.”

The wage gap creates a knock on effect that impacts how much you get paid overtime (typically one and a half time an employee’s regular rate of pay), how much an employer will contribute to a retirement account (a percentage of an employee’s yearly salary) or how much is paid in pension.

Currently, gender pay gaps continue to persist, though they have narrowed over time. On average, women earn just under 82 cents to every dollar a man earns. But according to the Census Bureau, at the current rate, it will take until 2059 for women to achieve equal pay.

While all women are underpaid compared to their white male counterparts, according to the U.S. Department of Labor, gaps not only persist throughout time, they widen based upon race and ethnicity.

In analyzing median annual earnings, the Department of Labor found Black women earn roughly 61% of what white men earn. Hispanic women fare even worse; they earn just over half of what their white male counterparts earn. Asian women and white women were still underpaid but faced narrower gaps: 85% and 77%, respectively.

The gender gap, Ledbetter said, makes it “extremely difficult for so many women across this nation to stay independent.”

'American right to be paid equally for equal work'

Ledbetter was about to retire from the Goodyear Tire & Rubber Company in the late 1990s when an anonymous note given to her revealed she was earning less than her male colleagues. Ledbetter would go on to sue Goodyear in a case that went to the Supreme Court.

In her dissent, the late Justice Ruth Bader Ginsberg noted that the pay differences between Ledbetter and her colleague were large.

“Initially, Ledbetter’s salary was in line with the salaries of men performing substantially similar work,” the dissent stated. “Over time, however, her pay slipped in comparison to the pay of male area managers with equal or less seniority. By the end of 1997, Ledbetter was the only woman working as an area manager and the pay discrepancy between Ledbetter and her 15 male counterparts was stark: Ledbetter was paid $3,727 per month; the lowest paid male area manager received $4,286 per month, the highest paid, $5,236.”

The gap represented more than $18,000 each year.

Lilly Ledbetter, center, an activist for workplace equality, is flanked by Speaker of the House Nancy Pelosi, D-Calif., right, and Rep. Rosa DeLauro, D-Conn., sponsor of the Paycheck Fairness Act, left, speaks at an event to advocate for the Paycheck Fairness Act on the 10th anniversary of President Barack Obama signing the Lilly Ledbetter Fair Pay Act, at the Capitol in Washington, Wednesday, Jan. 30, 2019. The legislation, a top tier issue for the new Democratic majority in the House, would strengthen the Equal Pay Act of 1963 and guarantee that women can challenge pay discrimination and hold employers accountable.(AP Photo/J. Scott Applewhite)
Lilly Ledbetter, center, an activist for workplace equality, is flanked by Speaker of the House Nancy Pelosi, D-Calif., right, and Rep. Rosa DeLauro, D-Conn., sponsor of the Paycheck Fairness Act, left, speaks at an event to advocate for the Paycheck Fairness Act on the 10th anniversary of President Barack Obama signing the Lilly Ledbetter Fair Pay Act, at the Capitol in Washington, Wednesday, Jan. 30, 2019. The legislation, a top tier issue for the new Democratic majority in the House, would strengthen the Equal Pay Act of 1963 and guarantee that women can challenge pay discrimination and hold employers accountable.(AP Photo/J. Scott Applewhite)

Ledbetter ultimately lost her Supreme Court case, for statutory reasons: Goodyear cited Title VII of the Civil Rights Act that “requires discrimination complaints to made within 180 days of the employer's discriminatory conduct.”

But while Ledbetter lost her case, it did inspire a new law: the Lilly Ledbetter Fair Pay Act of 2009 — the first act that former President Barack Obama would sign into law after taking office. The law strengthened workers’ rights and eliminated the time limit on when wage discrimination lawsuits could be filed. Instead of filing a lawsuit within 180 days from the first unfair paycheck, the law allowed for workers to sue for every unfair paycheck issued.

Ledbetter said missing out on equal pay for 19 years impacts her finances to this day.

“I have to do without them [the lost wages] and try to make ends meet for the rest of my life,” she explained. “And this is not right in this country. This is an American right to be paid equally for equal work.”

'A double standard'

But gender discrimination impacting pay isn’t the only hurdle facing women. Women must often contend with the “motherhood tax,” the amount that a woman’s salary falls after giving birth. Studies have found that 10 years after having children, American women’s salaries drop by roughly 40%, compared to their pre-birth wages.

Mothers, typically saddled with caregiving duties, often opt for reduced hours or for lower paying jobs that are more child-friendly. This makes them less competitive in the workplace than their male colleagues, who can work later hours, or attend events and outings.

“There is still a double standard today,” Ledbetter said. “What works for the man does not work for women. And this is not right because this is a hardship. And the women should not be penalized,”

Caregiving, Ledbetter explained, isn’t classified as work, which also impacts a woman’s Social Security payouts later in life.

Ledbetter shared with Yahoo Finance that the decade she stayed at home to raise her children slashed her Social Security payments by $500 a month — money she needs now after being underpaid compared to her male coworkers at Goodyear.

Even though women have a right to be paid equally to their male counterparts, Ledbetter said many might not speak out for fear of retaliation.

“That's one of the reasons there have never, never been many cases like mine or anyone like myself that would pursue it all the way,” Ledbetter explained.

One of the hurdles facing women in the fight for equal pay is a lack of transparency in workplaces about salaries. Given the challenges, Ledbetter said women need to get their equal pay at the beginning of their careers.

Raises, she explained, “are generally percentages of what you’re making. So you need to start out with as much as you can get under the law.”

Celebrate Women's History Month.
Celebrate Women's History Month.

Kristin Myers is a reporter and anchor for Yahoo Finance. Follow her on Twitter.

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