Call to Action: Gender and Racial Pay Gaps

In 2019, Left Bank Productions revealed that The Crown lead actress Claire Foy earned less for her role than male co-star Matt Smith, prompting the company to assure the public that from then on, nobody would get “paid more than the Queen.” Meanwhile, the U.S. Department of Labor accused the major software maker Oracle of underpaying women and minorities by a staggering $400 million.

Gender and racial pay disparities are not new but remain far more prevalent and excessive than one might realize. And cited salary is only part of the problem. Research suggests that women and people of color are much less likely to get call-backs on submitted job resumes, and efforts to negotiate better earnings are viewed far less favorably than for their white and male colleagues.

Just how extensive are gender and racial pay gaps, and what can we do about it? Read on to learn more.

Women in the United States earn notably less on average than their male colleagues, despite outpacing them in educational attainment. In 2016, Census Bureau data suggested women earned less than $0.82 for each dollar earned by men. People of color, meanwhile, tend to earn less than white peers, regardless of gender. It is likely no surprise, then, that the group most struck by pay inequality is women of color. According to CNBC, black women earn $0.63 for every dollar earned by white male counterparts. The situation is even worse for Native American and Latina women, who earn $0.57 and $0.54 to every dollar, respectively.

A report from Market Watch offers some perspective as to just how vast pay differences can become over time, especially when one factors in bonuses, retirement investments, and other workplace incentives.

According to the report, the average woman continuously working under a 2.6 percent pay difference—much smaller than the national average—would miss out on $501,416 in salary investments and returns over the course of 30 years. Yet, baseline pay is only part of the problem. Women and people of color are disproportionately represented in low-wage, low-potential jobs—even when factoring in job performance, education, and experience. They are also far less likely to snag an interview in the first place: research suggests white applicants are 36 percent more likely to receive a call-back than equally qualified African-Americans and 24 percent more likely than Latinos.

Recognizing pay disparities is necessary for mitigating them, but remains woefully insufficient. Equal Pay Days and other public awareness campaigns have done little to improve matters. Here are some initiatives that might.

Eliminating U.S. pay disparities will take more than skin-deep legislation, but it’s a start. Consider that the Equal Pay Act was signed into law in 1963, yet the Institute for Women’s Policy Research (IWPR) reports that if progress continues at the same rate as it has since then, women will not see pay parity until at least 2059.

Some states have begun to pass their own legislation to combat gender and racial pay gaps. Last year, Massachusetts passed the Massachusetts Equal Pay Act, for example, which bars employers from paying workers less than they pay “employees of a different gender” for comparable work. The Act also prohibits companies from inquiring about one’s salary history and banning employees from discussing earnings amongst themselves.

Legal recourse for victims of pay discrimination is a costly venture for employers: Market Watch reports that companies paid out nearly $1 billion in disclosed settlements and awards for gender-related workplace inequity alone. Still, some experts suggest legislative efforts only scratch the surface of the issue.

“If we just had the legislation, and employers weren’t acting and women weren’t asking, then it’s going to close the gap a little bit but not enough,” Megan Costello of the Boston Mayor’s Office of Women’s Advancement told the New York Times. University of Alabama researcher and professor Sandra Mortal is inclined to agree, telling Fast Company that legislation can only “mitigate,” not abolish the pay gap.

How laws are written and implemented matters, however. Some lawmakers have proposed legislation that tackles the problem from a different angle—one that researchers say might be more effective.

What if companies had to publish their salary data for public and government review? The Paycheck Fairness Act would require the Equal Employment Opportunity Commission to collect salary data from employers to uncover pay disparities.

The concept may seem simple on the surface, but it could be powerfully beneficial to businesses and workers. According to the New York Times, studies show that in addition to minimizing disparities, pay transparency increases worker productivity and collaboration. The Harvard Business Review also notes that wage transparency lowers companies’ salary costs overall by slowing male wage-growth.

Legislated pay transparency is not without precedent: several European nations that have adopted the approach have seen positive outcomes. Switzerland, for example, created Logib, a public-access tool that analyzes pay and staff structures to identify pay gaps. Germany offers its own version, D-Logib, which serves as a pay calculator and audit system in one. Austria, meanwhile, has taken a multi-pronged approach by forcing companies to publish income reports, in addition to funding a wage calculator that tells anyone—employer or employee—appropriate pay levels by qualification, occupation, and more.

Another increasingly popular approach to abolishing gender and racial pay disparities in the workplace is to combine company awareness and training campaigns meant to identify, prevent, and rectify problems. Such efforts could highlight and minimize implicit bias in hiring and compensation decisions.

IWPR Program Director of Employment and Earnings Ariane Hegewisch told Fast Company that pay negotiation and recruitment play a sizeable role in race-based discrimination. Some organizations go a step further, offering salary negotiation training sessions for women and people of color, who are statistically less likely to barter over pay.

Still, according to Fast Company, research suggests that while men who negotiate salary are statistically likely to benefit, these discussions have a negative impact on women, who are generally viewed unfavorably for their efforts. One controversial way to side-step the issue altogether: industrialized pay scales.

Belgium is the most equitable nation in the world when it comes to pay. According to OZY, its gender pay gap is currently just 1.1 percent, significantly lower than the 19.5 percent disparity in the United States. How does it do it? Established pay scales via industry-specific collective bargaining agreements. In other words, men and women doing the same work earn the same money, period. The country also requires companies across the country to report their earnings and reveal specific actions they have taken to address pay disparity.

Set pay scales could admittedly be controversial in the United States, with its meritocratic leanings, but the data suggest they work. Other nations that have taken a similar approach include Iceland and Finland. Iceland goes even further than Belgium in sanctioning companies that do not comply with pay equity rules while in Finland, pay disparity is specifically addressed in pay agreement bargaining through an “equality allowance.”

The pay equality strategies outlined above mean little unless they are implemented. There are several public representatives and advocacy organizations fighting for fair pay. Writing letters to local politicians and newspaper editors can do much to raise awareness. Readers who want to take a more active role on the issue, however, may want to connect with the following organizations.

• National Committee on Pay Equity
• National Organization of Women
• American Association of University Women
• Equal Paycheck Project
• Equal Pay Today
• Public Policy Institute of California (See if your state has a similar program!)

Aimee Hosler

Writer

Aimee Hosler is a long-time journalist specializing in education and technology. She is an advocate for experiential learning among all ages and serves as the director of communications for a non-profit community makerspace. She holds a degree in journalism from California Polytechnic State University in San Luis Obispo.