Would Iceland’s equal pay law work in the U.S.?
Presented here for discussion is an excerpt of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
The New Year ushered in a new wage policy in Iceland, where it is now illegal for companies to pay men more than women for the same job.
This move has drawn international attention, especially from the U.S., where full-time female workers make an average of 80 cents for every dollar their male counterparts earn. But could the progressive policy of a tiny island nation work in a country as diverse and politically complex as the U.S.?
The law was a result of a decades-long fight driven by women’s advocacy groups. Putting such a policy in place in the U.S. would require lifting the veil of secrecy on what different employees within a company make.
“It’s difficult for me to compare because I don’t know how it is in the U.S., but that’s not so sensitive here in Iceland,” Thorgerdur Einarsdottir, professor of gender studies at the University of Iceland, said of workers knowing their colleagues’ salaries on a recent Knowledge@Wharton show on SiriusXM. “We’ve had the gender equality act since 2008, where wage secrecy is forbidden. It’s not so much in the debate.”
Iceland is also vastly different from the U.S. Being smaller, less tied to international trade, about 80% unionized and more willing to accept government directives all helps enforcement of such a law.
Outdated American laws are also at the heart of the problem for the U.S.
“This is an awful lot like the debate that happened in the 1980s in this country with respect to this concept called comparable worth, where lawyers were trying to say that Title VII of the Civil Rights Act here requires that you pay jobs of equal worth the same,” said Janice Madden, professor of regional science and sociology at the University of Pennsylvania, referring to the provision of the 1964 law that prohibits employer discrimination on the basis of sex, race, gender, national origin and religion. “What constitutes equal worth? … It ended up that the courts tossed that out. It has been used a little bit in government jobs, but it really had little effect, and there was a huge backlash.”
DISCUSSION QUESTIONS: Would an equal pay law work in the U.S.? Do you have any solutions for reducing disparity in pay, particularly as it applies to retail?