Closing the Gender Pay Gap: What Women, Employers and Government Can Do
What experts said at this Equal Pay Day conference
Can anything be done to close the sad and enormous wage gap between women and men? Actually, based on what I heard at the Inclusion By Design: Equal Pay Day conference in New York City on Tuesday (Equal Pay Day), yes.
The speakers at the conference (from a nonprofit for women 50+ in the workplace, known as amazing.community), ranged from a Harvard researcher to an AARP public policy expert to a whiz on negotiating pay. None of them believed the wage gap could vanish anytime soon. But they did suggest steps that women, employers and the government could take to lessen the disparity. I’ll share them below.
“Pay fairness is a moral issue, but it’s also an economic issue,” said Siri Chilazi, a research fellow at the women and public policy program at the Harvard John F. Kennedy School of Government. “If the trajectory doesn’t change, the gender pay gap won’t close for another 40 years, maybe 100 years. I’m not willing to wait for either.”
What the Gender Pay Gap Is
Before getting to how to close the gender pay gap, some definitions and details might be useful.
The current gender pay gap is commonly described as 20%, said Chilazi. That’s the earnings ratio of the median women’s salary in the United States divided by the median men’s. In other words, based on annual earnings — taking into account all income sources and factoring in the number of hours worked — women now earn 80% of what men do. The U.S. gender pay gap is worse than the average for OECD countries (highly industrialized, high income nations).
The gender pay gap is especially large in America for black women (61% of men’s pay) and Latino women (53%).
And, Chilazi said, the pay gap gets wider as U.S. women get older. While the gap is 10% for women age 20-to-24, “for 55-to-64 year-olds, the gap is 22%,” said Chilazi. “That’s a consistent trend we have seen statistically, even as the wage gap has narrowed overall.”
The size of the wage gap also depends on the type of job, and it's probably exactly the opposite way you think.
Where the Pay Gap Is Biggest
“The highest paying jobs that require the most education show the largest wage gaps,” Chilazi said. “The smallest wage gaps are on the low-end of the income spectrum because those jobs have more of a standardized wage structure.” Also, Chilazi added, wage gaps are smaller for unionized jobs and for federal workers than for non-union jobs and private-sector employment.
Although the gender pay gap has diminished since researchers began tracking it in 1979, Chilazi said that “most of the progress was in the 1980s and 1990s,” when more women came into the workforce and stayed and when women’s education levels rose. Lately, she noted, “we have more or less stalled.”
Fixing the wage gap is tricky, Chilazi said, citing Uber as an example.
Compensation for that ride-sharing app isn’t subjective. It’s determined by the Uber algorithm, which doesn’t know a driver’s sex. Nevertheless, researchers found a 7% pay gap in favor of men. (A few reasons: men tended to stay on the Uber platform longer and the algorithm rewards that; men tend to drive faster, so they complete more trips in a given time and men tend to drive at more lucrative times in more lucrative parts of town and take longer trips.)
How Employers and Government Can Close the Gender Pay Gap
So, what can be done to close the gender pay gap?
The panelists said employers could be required to share their gender gap data with the federal government to help hold them accountable. Employers could also be banned from punishing employees from talking with each other about wages and from asking job applicants about their prior salaries; such a law passed last summer in Massachusetts.
“We need to make sure employees can discuss wages without fear of retaliation,” said panelist Andrea Johnson, senior counsel for state policy at the National Women’s Law Center. “An ability to discuss wages lets employees find out if they are discriminated against to begin with.”
Employers can also publicly disclose their wage gaps and then use pay audits to reduce them, as some firms (like Salesforce and Intel) have. And they can be more forthcoming about pay — telling job seekers whether salary is negotiable and providing salary ranges.
Panelist Kathleen Luparello said her coalition of business leaders, Paradigm for Parity, came up with a five-point action plan to address the corporate leadership gender gap. One of the points: “Base promotions on performance, not presence.” In other words, give women and men more control over where and how they work, embracing flexible work.
What Women Can Do to Earn More
And here’s what women can do to help close the gender pay gap: negotiate more and negotiate harder.
Studies have shown that women tend to negotiate raises and starting salaries less often then men. And even when they do negotiate, research shows, they tend to get smaller raises than male counterparts.
“You are worth more than you’re asking for,” Alicia Lazarto, chief operating officer of Financial Gym, a New York City-based personal financial services firm, told the mostly-female audience.
If you’re a woman over 50, Lazarto said, don’t let your age keep you from asking for the pay you believe you deserve. Remind your boss of your experience and knowledge. “Be confident and highlight all the things you’ve done,” she added.
Before asking for a raise or applying for a job, she said, research what people are paid for such positions. Four sites Lazarto recommends to do this: Payscale and Glassdoor and two sites specifically for women, Fairy Godboss and Ladies Get Paid.
If you’re job hunting and want feedback on your resumé, AARP offers a free service for that, said panelist Lori Trawinski, an AARP Public Policy Institute expert on working after 50. AARP also has virtual career fairs for older job hunters.
Lazarto urged women looking for raises to create what she calls a “Kudos File.” That’s a folder of emails and notes they've received from work colleagues, clients and customers, raving about the job they did.
“Save that file and when you go to your boss, you can say: ‘Here’s why I should get a raise,’” Lazarrrto said.
But don’t get personal, Lazarto said. “You don’t need to tell anyone at work, including your boss or manager or your co-founder if you’re an entrepreneur everything personal about why you want the money. You just have to let them know you want it. Stick to the facts.”
3 Numbers Women Need Before Asking for a Raise
Lazarto also recommends having three numbers readily available when preparing to ask for a raise: your “wish number,” your “want number” and your “walk number.”
Your wish number, she said, is “what [amount of money] would make me happy with the same role I have.” Your want number is “the high number for what you can live on” along with any non-pay benefits you’d like, like working from home two days a week or unlimited vacation. Your walk number is the pay figure that’s low enough for you to leave your job.
If you ask for a raise and your boss declines, Lazarto said, don’t stop there, however.
“Ask about a bonus or other items on your wish list,” she said.