Equal Pay Negotiations LLC

Achieving Equal Pay by Consulting for Employers, Employees, and Policy Makers

Pay Equally is to Drive Safely as…

The Election is Over, Now Back to Work

Women made up 53% of last week’s voters and 55% of those women voted for President Obama.  Come January there will be 20 women in the senate and 78 in congress.  Women definitely have a huge impact on our elections and are having a growing number of seats at the political table.  I trust that with this growth, the issue of the gender salary gap will continue to be addressed until it is corrected.  Until now, our Equal Pay laws have been a bit like having Drive Safely laws.  With women flexing more  political muscle it is time to change this approach.

Laws are About Actions

Photo credit: iStock Photography

Thirty-nine states ban texting while driving.  All roads have maximum and minimum driving speeds.  Stops signs must be adhered.  No driving under the influence. In Massachusetts the car in the rotary has the right of way.  For those outside of Massachusetts you may know a rotary as a roundabout or a traffic circle.   Please remember this when you visit my lovely home state.  Regardless, note that each of these laws requires or bans specific actions.  All of these laws share one overarching goal – eliminate accidents aka Drive Safely. The heartache and financial loss of unsafe driving has been too severe.   Addressing the issue and to continually adjusting as new challenges such as texting rear their ugly head has been critical to minimize injuries, deaths, loss of property, loss of work productivity, and more.

Unfortunately, some people may follow every single law to the letter and still have an accident.  Luckily for everyone on the road, other people may break multiple driving laws and still arrive home safe and sound.  Whether or not they are arrested or ticketed is not decided on the end result – safe passage or unsafe passage – but on actions taken or ignored.

Unequal pay creates heartache and financial loss as well. The average working woman stands to lose $380,000 because of the pay disparities and for some women it can be as high as $2 million during a lifetime.  American Association of University Women’s (AAUW) recent report Graduating to a Pay Gap states  “one-third of the (gender pay) gap remains unexplained” while the gap itself has become stagnant in recent years.  The Institute for Women’s Policy Research (IWPR) chart below shows that women were making roughly 80% of men’s earnings in 2011 whether you look at the pay gap by weekly median income or annual median income.  This is in comparison to 65% in 1955.  That is just an increase of 15% points in 56 years.

Equal Pay Laws Focus on Results

The slow progress to-date indicates that changes are needed for any hope of eliminating the gender pay gap within the next 50 years.  Even better would be quicker results that give women working today a chance to reap the benefits of their success instead of our daughters or granddaughters being the first to benefit.

Currently laws we have regarding equal pay do focus on the goal and not on actions.

The Equal Pay Act of 1963 (EPA) signed by President Kennedy states:

No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex: Provided, That an employer who is paying a wage rate differential in violation of this subsection shall not, in order to comply with the provisions of this subsection, reduce the wage rate of any employee. We have the Lilly Ledbetter Law of 2009 signed by President Obama.  We have the Fair Pay Act sitting in Congress without it coming to up for vote. 

Since the passing of the EPA some progress has been made but it has been very difficult to get beyond 80%.  As a country we have been hovering around 80% since 2003. The allowable exceptions (in bold above) to the EPA are broad enough (i.e. any other factor) that employers who are purposefully discriminating can ensure they have an argument if sued and employers who are acting in good faith may still have the end result of their female employees being paid less than their male employees.

In 2009 President Obama showed his commitment to equal pay by signing the Lilly Ledbetter Fair Pay Act.   The law is written to lengthening the time allowed to sue an employer should a woman find herself paid unequally to her male colleagues but it does not address minimizing the gender pay gap.  The law states:

‘(3)(A) For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

Time for Equal Pay Laws to Focus on Actions

There is research after research regarding the gender pay gap with common themes and recommendations appearing and reappearing.  Such research has shown actions during and after the hiring process that do promote equal pay and other actions that do not promote equal pay.

Job Openings Should Include Salaries

For example, AAUW’s Graduating to a Pay Gap recommends “increase in transparency in pay systems” as one essential step to eliminate the gender pay gap. A great start to transparency would be to require posting the minimum pay or pay range for jobs that are publicly advertised in newspapers, job boards, corporate web sites, etc. Currently many jobs are posted without any salary information. How often have you applied for a job with no clue as to the amount it will pay?  Typically companies pay outside consultants, purchase detailed databases, or hire internal compensation specialists to research market values of jobs, determine appropriate salary ranges and compensation packages.  Yet, companies put the burden on individuals who do not have the same resources to state their desired salary.  This desired salary then becomes the high mark for the salary unless the individual so underestimated the market that the company needs to pay them more just to be in the acceptable salary range for the job.   According to research done by Universum, a capital talent company, female MBA students anticipate earning less then male MBA students anticipate.  Both the ladies and the men prove to be right about what they will earn.

Putting gender aside – how does having the candidate name the salary attribute to equal pay for any employees?  This process ensures unequal pay among colleagues and not based on ability, education, or experience but based on one number stated during the interview process.

Pay Secrecy Should Not Be Allowed

Salary confidentiality continues the lack of pay transparency post hiring.  Research by the IWPR shows that the gender pay gap and pay secrecy are more prevalent in the private sector than the public sector. According to the IWPR/Rockefeller Survey of Economic Security, only 18% of women in public sector jobs experienced pay secrecy while 62% of women in private sector jobs experienced it.  Such secrecy may have a causal effect on the gender pay gap.  Even if it has no effect on the creation of the gender pay gap, it handcuffs any individual from approaching management to rectify the matter should she discover inequity in pay. Salary non-disclosure agreements typically have a “cause for dismissal” clause and thus it leaves people with three options when they discover others are making more doing the same job.  The options are 1) to accept the low pay in silence; 2) risk being fired for approaching management; or 3) start looking for a new job at a new company.  It is time to eliminate this practice that restrains employees from addressing unfair pay.

Salary Histories Should Not Be Considered

Questions about salary history during the hiring process are another means to perpetuate a gender salary gap.  A women who was underpaid in a previous job will never be able to jump up to the level of pay men are making if future salaries take into consideration past salaries.  One means to eliminate this contributing factor would be to the prohibition of salary history as a requirement when completing a job application both in hardcopy and electronic forms. Recruiters have told me that salary history does not provide any information that cannot be gained through other means such as questions of experience and achievements and review of the resume.

Take Action to Focus on Actions

Congressional Class of 2013, I ask you to look at the gender salary gap differently and consider laws that focus on specific actions.  Voters, employees, and women if you agree that it’s time to stop saying Pay Equally and time to focus on actions, please sign my Salary Inclusion to Promote Equality Petition.  I am sure that implementing this type of change will get better results than 15% points in 55 years.  Heck it can’t be worse.

Copyright 2012 by Katie Donovan

2 comments on “Pay Equally is to Drive Safely as…

  1. Robin
    December 18, 2012

    Great article Katie. Why is it that there’s pay secrecy? There’s so much intimidation in the workplace that women particularly are afraid of asking for what they want, or better yet, what they deserve for fear of being too bold and risk losing a job opportunity or job. Time for everyone to step up to the plate.

    • Katie Donovan
      December 19, 2012

      Robin, there is an old saw regarding any negotiation “S/he who speaks first loses.” That holds true with salary negotiation thus most jobs are publicly posted with no mention of salary minimum or range. Companies ask for your desired salary and salary history to get you to give the number first. The secrecy also lets the company keep higher new employee salaries from long-term employees who may have come in during a recession with a lower pay and their raises haven’t kept up with the market value of the job. Secrecy benefits the company and harms the employees.

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