March 24, 2021. For many this may have been just another day. But for working women it marked Equal Pay Day – the day (3 months into the new year) that women had to work to in 2021 to earn what white, non-Hispanic men earned in 2020 alone. According to the National Women’s Law Center, women working fulltime, year-round are paid, on average, 82 cents for every dollar paid to men.
It’s amazing that in the 21st century we’re still seeing a significant gap in the way men and women are paid. And we see it in every industry – from hi-tech to sports to entertainment. And given the impact the past 12 months have had on women in the workforce – 2.3 million have left it all together – it’s well past time to change things.
So, what is the long-term impact of this wage gap for women?
According to one study, over the course of a 40-year career, women on average could be paid nearly a half million dollars less than their male counterparts. The gap is even wider for women of color, many of whom earn only 75 cents for every dollar a man makes. As a result of lower lifetime earnings, women receive less in Social Security and pensions. In overall retirement income, women have only 70% of what men do.
An AAUW (American Association of University Women) study – The Simple Truth About the Gender Pay Gap – provides additional statistics about the impact of pay discrimination on women.
Although gender-based discrimination has been illegal since the 1960s, it still thrives in many workplaces, especially those that discourage open discussion of wages and that rely on prior salary history in hiring. If the bar is set low for a woman early on, it may follow her from job to job throughout her career. Also, women may leave the workforce temporarily to raise children or to care for an aging parent. When they return, that employment gap works against them. It may result in their being offered (or accepting) lower pay to enable their re-entry.
It’s time for this to change, and there are many things that men can do to help close the gap. A recent article outlined 5 specific actions men can take to promote pay equity.
- Sponsor, coach and mentor female coworkers. Men can advocate for their female co-workers to ensure their value is recognized and that they are considered in promotion opportunities.
- Compensation transparency. Salary discussions are often taboo so women may not know that a man doing the same job is paid more. Men can take the lead in exposing inequity by sharing this information with their female mentees.
- Take paternity leave. This could help reduce the so-called “motherhood penalty.”
- Speak up when women are not present. Again, advocate for women.
- Recognize unconscious bias. Don’t assume that a woman won’t want (or be able to handle) a job that requires long hours or travel. Advocate for their equal consideration.
Pay equity is an important discussion. We’ll continue it next time with some actions that employers can take to help close the gap, and what women can do to advocate for themselves.
Last time we talked about establishing your pay philosophy. Once you’ve done that and have committed it to paper (to be periodically updated) the next step is to understand the market so you can develop pay rates for each of the positions you identified in your workforce plan.
For the past couple of blogs, I’ve been talking about various aspects of HR planning and the importance of being proactive vs. reactive around people-related activities. One of the most important activities to plan for is compensation. What have you budgeted for compensation, and how will you allocate it for merit increases and adjustments needed to attract and retain the skills identified in your workforce plan?
