Connecting state and local government leaders

Cities Are Fighting to Close the Pay Gap–But States Are Standing in the Way

A group of people with pink balloons gather at the state capitol during the Women's March in St. Paul, Minnesota, on January, 21, 2017.

A group of people with pink balloons gather at the state capitol during the Women's March in St. Paul, Minnesota, on January, 21, 2017. Shutterstock

 

Connecting state and local government leaders

In a contributed article, National League of Cities' Christiana McFarland outlines how state preemption of local laws may be adding to the wage gap.

Tuesday—dubbed Equal Pay Day—symbolizes roughly how many days into the new year that women must work to earn what men did the previous year. As grassroots efforts and awareness activities take place across the country, cities are working every day to find innovative solutions that address the discrepancy.

From Minneapolis and St. Paul, Minnesota, to Morristown, New Jersey, and Santa Monica, California, cities are recognizing the need for policies that help close the persistent wage gap between men and women. And in the latest effort by cities to address the pay divide, the city of Philadelphia unanimously passed a law that bans employers from asking about wage history.

Nationally, though, women are still at a disadvantage, making 80 cents to every dollar of male earnings. Historical discrimination facing women in the workplace, as well as social expectations and the “motherhood penalty” are contributing factors.

Given the scale and multidimensional nature of the challenge, cities are confronting it on a variety of fronts – from salary history ban to minimum wage ordinances to paid leave laws. These efforts, however, are often thwarted by state actions against cities.

Take minimum wage, for example. With women representing two of every three minimum wage earners, a National Women’s Law Center study found that states with higher-than-federal minimum wages had smaller wage gaps. Movements to increase wages to $10.10 per hour, or even $15 in some places, have been spreading throughout city councils and ballot boxes. Despite evidence that minimum wage ordinances have a positive impact on narrowing the pay gap, half of the states in the country do not permit their cities to increase the minimum wage.  

Just this week, the Iowa legislature approved a bill prohibiting local governments from raising the minimum wage. In addition to preventing wage increases, the bill, now in the hands of the governor who has indicated his support, would decrease wages for workers in four cities and counties that have a minimum wage level above the state.

My new study with colleagues at the National League of Cities, “City Rights in an Era of Preemption,” finds that 25 states currently have some kind of preemption of minimum wage ordinances. Cities often have higher costs of living than other parts of the state, so minimum wage increases above a federal or state level allows them to ensure employees are provided a fair, livable wage for their area.

Many of these states, such as New Hampshire and Colorado, have had long-standing preemption because authority to regulate wages was never granted to cities. Others are facing strong lobbying from business groups, with a growing number of state legislatures considering explicit statutory preemption.

Alabama and North Carolina are two states that took action in 2016. Alabama’s bill bore a striking resemblance to the “The Living Wage Mandate Preemption Act,” a piece of model legislation posted on the website of the business advocacy group American Legislative Exchange Council (ALEC).

Business groups have a strong interest in blocking local minimum wage ordinances. They say that these ordinances create a patchwork of regulations and increase the cost of doing business. Detractors also note shaky evidence that minimum wage laws actually improve lives, or worse yet, that they drive jobs away, decreasing community and family well-being.

Although minimum wage ordinances should be approached with caution, including conducting a robust impact analysis, decisions of this nature must be made locally because their success is based on factors that are purely local, namely cost of living and strength of the local economy.

But increasing minimum wage only addresses part of the issue – the problem is as much about low wages as it is about the work environment and social expectations for women. According to the Economic Policy Institute, “Women’s experience levels and work schedules do factor into the gender wage gap. Rather than disproving the role of discrimination, work experience, hours, and schedules in part reflect the social expectations that still disadvantage women. These influences all play a role in the ‘motherhood wage penalty’ evident in the data.”

Creating an environment for women to stay competitive in the workforce is therefore also critical.  By and large, help on this front is not coming from federal and state governments or the private sector, as demonstrated by the fact that the U.S. is the only country in the Organization for Economic Cooperation and Development not providing paid leave benefits. Additionally, only 12 percent of private sector employers provide paid family and medical leave to their employees.

Paid leave, including sick leave and family and medical leave, improves the working lives of women in particular. These policies strengthen families, lower turnover, provide needed flexibility and support women to remain competitive in the workforce, ultimately helping to close the gender wage gap.

Cities are taking action, where they can. In some instances, statewide paid sick leave laws allow cities to provide levels of support for employees that exceed the state’s minimum requirements. San Diego and San Francisco are among several California cities that have passed paid sick leave laws that go above and beyond state minimums.

Nineteen state legislatures, however, have passed laws that preempt the ability of cities to pass laws mandating employers within their jurisdictions provide paid leave. New methods of preemption are also beginning to crop up. For example, in the absence of a state law that explicitly prohibits local paid sick leave, Arizona has threatened to withhold revenues from the city of Tempe in order to deter the possible adoption of paid sick leave measures.

Studies show that if improvements continue at the same slow pace, women will not reach pay parity until 2059. Lack of action is not an option, something cities know all too well. Moving the needle on the gender pay gap means empowering cities. The future of our half of our nation’s workforce depends on it.

Christiana McFarland is director of research at the National League of Cities.

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