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Kamala Harris Has a Hammer and Is In Search of a Nail

So Kamala Harris is proposing stuff again. She’s using pretty vague verbiage to pitch her idea and should be asked about two dozen very specific questions. But I’ll cover the high-level stuff here. However, she is using a well-worn lie to push her new idea.

From her speech previewing her proposal:

“Women, for the same work, for equal work make an average of 80 cents on the dollar. Black women make 61 cents on the dollar. Latina women make 53 cents on the dollar. And this has got to end.”

I have 15 years of experience working in Human Resources and dealing with compensation data. What Kamala Harris cites is a population statistic. Simply put it considers only compensation, gender, and race for everyone. It does not account for things as basic as job title or years of experience and has been debunked repeatedly.

In other words, it compares CEOs to manual laborers. Of course, the legacy media is dutifully repeating this claim as if this type of differential is seen in corporate America. I can assure you it is not.

To set the stage, let’s look at the available data from the EEOC for gender-based discrimination. In 2017 there were 74.6 million women in the civilian workforce according to the agency. There were 25,605 gender discrimination claims. According to the agency, the majority of these are related to discharge from employment and sexual harassment. Not pay discrimination.

This could be because large private companies are cognizant of the legal and regulatory environment they operate in to include the Equal Pay Act of 1963. As such, they perform internal multivariate statistical assessments of their pay practices. These are usually set up by consultants well versed in legal defenses to discrimination who also assist them in defining their jobs and salary band classifications in a way that is compliant with the law.

They look for statistically significant factors in their pay practices that are indicative of prohibited bias. If the salary of an individual reflects a statistically significant t-value for any protected characteristic, it is corrected. Employers do this to maintain a record to defend against claims and show a pattern of pro-active behavior.

After doing these for 10’s of thousands of employees across several industries, job title, function, job grade, and experience are the most significant factors. I found one woman who was an inpatriate from Brazil where gender was significant. It was a reflection of the pay in her home country and it was corrected within a week. That is after 15 years in the field.

Another plank of Harris’s plan is forbidding the use of arbitration agreements for complaints of pay discrimination. It might also help her to know that no employee is prevented from making an EEOC complaint regarding wage discrimination. Even those with arbitration agreements.

When a complaint is made, employers are already required to provide their proof of non-discrimination to the EEOC to alleviate their responsibility in a claim situation. If the EEOC finds no discrimination, they send the employee a right to sue letter. This is when an arbitration clause kicks in. However, if the EEOC finds nothing, it is not likely an arbitrator will either.

However, it appears that Harris wants companies with 100 employees or more to provide the equivalent of population statistics to receive an Equal Pay Certification. According to the AP: (emphasis mine)

In Harris’s equal-pay plan, the campaign says, companies would be prohibited from asking about prior salary history as part of their hiring process, banned from using forced arbitration agreements in employment contracts for pay discrimination matters, and would be required to allow employees to freely discuss their pay. They would also be required to report the share of women who are among the company’s top earners, the total pay and total compensation gap that exists between men and women, regardless of job titles, experience and performance.

This is a ridiculous first pass. The Senator needs to work with Labor Economists, as well as Compensation and HR professionals to understand how compensation is structured and provide organizations the template to do the analysis that includes all the relevant factors.

Ultimately, small and medium-sized business will be hardest hit with her current proposal. They do not have the internal expertise to do this type of assessment in most cases and their jobs are much harder to classify beyond the frontline workers. Managers often wear multiple hats and take on ad hoc duties as needed. And the penalties could really hurt the bottom line of these businesses.

The other requirements are mostly silly. I rarely asked a professional candidate what they made at their previous job. I asked what they expected to make at the job I was interviewing them for. For hourly positions, the wage was generally advertised. These are very common practices. And her gender headcount does nothing to help women. It just gives people the ability to question a woman on the executive team or senior management more than they already do thanks to “diversity” and Affirmative Action requirements.

So Kamala Harris is fighting a problem that not very many women actually formalize through the enforcement agency and using garbage statistics to rile women up. Perhaps the idea is just to perpetuate the “Republicans Hate Women Meme” when they vote against it as they should. I also think her expected revenues are also overly optimistic. Once the rules are laid out, no major corporation is going to be dumb enough not to comply.

The cutest part is how companies will have to advertise their pay equity status publicly. Senator Harris must have been reading up on China’s social credit system. Can’t wait to see the other public humiliation policies she will implement if she sits in the White House.

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