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Gender pay parity laws are still falling short, here’s why

More states are enacting gender pay parity laws, but their efforts might be falling short since the pay gap varies so widely among different ethnicities.

Gender pay parity laws are still falling short, here’s why
[Photo: Jorge Alcala/Unsplash]

If efforts to close the pay gap proceed at the same rate as they have since the 1960s, we won’t see pay parity across the U.S. until 2059, according to the Institute for Women’s Policy Research (IWPR). That’s why, in states like California and Massachusetts, gender-based pay parity is being more aggressively addressed and codified through legislation. The Massachusetts Equal Pay Act, for example, went into effect this July and bars employers from paying workers “a salary or wage less than what they pay employees of a different gender for comparable work.” It also prohibits employers from asking for salary history or preventing employees from discussing salaries among each other.

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But all pay gaps are not created equal. On the whole, women now make almost 82% of what men make. But that really only applies to white women: Black and Latinx women make, respectively, about 68% and 62% of what white men earn. Since black and Latinx men are also underpaid, there is less of a gender-based pay gap in those groups; black women’s earnings amount to more than 92% of black men’s earnings, while Latinx women make more than 87% of what their male counterparts do. The opposite is true for Asian women, who see far less of a pay gap when compared against white men (93%) but a much bigger disparity within their racial group (nearly 75%).

Gender-based pay parity efforts can only do so much, then, if women—and men—from different backgrounds aren’t starting on equal footing. Here are some of the ways in which pay parity efforts might fall short.

Legislation alone isn’t enough

A city like Boston has made a big push to close the pay gap in recent years. That means Boston hasn’t just relied on statewide legislation—the Massachusetts Equal Pay Act—to create change. The Boston Women’s Workforce Council has partnered with Boston-based companies to find ways to promote and support women in their workplaces, and the city has provided free salary negotiation workshops to thousands of women. “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, the executive director of the Mayor’s Office of Women’s Advancement, told the New York Times earlier this year. “It has to be all of these things together.”

Legislation can help “mitigate” the pay gap, but it won’t do away with it altogether, according to University of Alabama professor and researcher Sandra Mortal. (Plus, motherhood is still one of the biggest reasons for the gender pay gap—and that’s an issue that won’t go away.) “It’s one thing to say you have 200 call center [employees] responsible for answering phones and you should pay them equally regardless of gender and race,” adds Vishal Gupta, also a professor and researcher at the University of Alabama. “The problem is, equal work is really difficult to measure as you move up the organizational hierarchy.” As Mortal points out, legislation on its own also can’t address issues that are more deeply entrenched—say, the fact that in top management teams, women often progress more slowly and are less likely to get promoted.

Double minorities are further from pay parity

Then there’s the issue of who benefits most from pay parity laws and efforts. Boston’s initiatives, for example, have thus far primarily helped women who are more educated and have higher salaries. The city has already rolled out more workshops outside of the downtown area and trying to reach a more diverse audience by advertising in more languages and partnering with local community groups.

But it’s no coincidence that data tells us social stratification is, in fact, increasing as women earn more and are more “equal” in their marriages. We know minority women make less, but there’s also less data on them overall—perhaps also because it’s harder to quantify intersecting bias. “To be honest, I think there’s very little research when it comes to double minority status,” Gupta says. “The most research is on [men and women], in terms of pay. Then comes race and pay.”

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As Ariane Hegewisch, the program director of employment and earnings at the IWPR, points out, two of the key issues around pay are negotiation and recruitment—and that’s where race-based discrimination can play a sizable role. “Once you control for occupation and education, there still remains a big gap between black women and white women,” she adds. Teaching skills like negotiation doesn’t necessarily take into account the variance in how women of different races and backgrounds are perceived; legislation can help address the pay gap when women get through the door, but it won’t increase access to high-paying jobs. These are issues faced by men of color, as well, but pay parity efforts often hone in on gender.

Pay transparency is still uncommon

“We look at pay parity at the CEO level, and don’t find a difference by gender,” Mortal says (though that isn’t true in CTO or CFO roles). “But below the CEO level, females do have lower compensation.” She adds that there isn’t much of a race-based pay gap at the CEO level either. One reason for that? Pay transparency. “We argue in our paper that it is the highly transparent nature of CEO compensation that seems to level the playing field for men and women,” she says, referencing a paper she published with Gupta. “We believe that greater transparency has the potential to reduce pay disparity.”

According to Hegewisch, that’s why unions can be important for black women in the workforce—because they hold employers accountable. She also cites the U.K. as an example of how transparency has forced public discourse around gender-based pay parity. A new reporting requirement, which went into effect this year, mandates that U.K. companies with more than 250 employees share their salary breakdown by gender.

Hegewisch concedes pay transparency is a harder sell in the U.S. “It’s unlikely a lot of companies will switch,” she says. “But what you can do is say, ‘Okay, if you want to get to the next level, this is what you need to do.’ [Companies] could be more transparent about those steps and the salary range.” She adds that increased pay transparency would also make legislation more meaningful. “A law is effective when people feel they have the right—and feel incensed by the issue,” she says. 

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About the author

Pavithra Mohan is an assistant editor for Fast Company Digital. Her writing has previously been featured in Gizmodo and Popular Science magazine.

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