Bridging the Gap: Gender, Pay, and Diversity

As of late, the gap in pay due to differing genders and cultural backgrounds has been a hot topic. Whether it’s hearing that women make $0.78 on the dollar compared to men or that the average hourly wage for black and Hispanic men was $15 and $14 respectively compared to $21 for white men, there is an ongoing pay gap issue. [source] However, discussing statistics doesn’t provide a solution. What can we do to bridge the gap and make the world a better, more equal place moving forward?

Practicality in Publishing Pay

An article published by a Washington University sociologist found that being transparent about salary and wages helps shrink the pay gap. In fact, those who reported that their managers were “very good” at sharing financial information saw an 8-12% increase in pay versus those who ranked their managers as “very poor.” Clearly, disclosure is a beneficial resource that can help to diminish asymmetries in pay. This can help provide more legitimacy to an employee’s claim for wage bargaining.

To Negotiate or Not to Negotiate

One notable factor in differing pay is that white men are more likely to ask for higher pay and negotiate the terms of their wages. Economics professor Linda Babcock found that only 12.5% of women asked for more money compared to over 51% of men. She also found that when women did ask for raises they often requested 30% less than men did. This results in huge income losses over a career, up to $2 million. In order to bridge this seemingly huge gap in pay differences one of two things need to be done. For one, we could coach more women of all backgrounds in negotiation. This will not only give them an upper hand when it comes to pay but will also help alter corporate practices when it comes to salary offers. One other strategy is to ban pay negotiation completely. This puts the responsibility of fair pay on the company as opposed to the candidates needing to negotiate their right to equal pay. [source]

Law Changes

Interestingly enough, federal law doesn’t say much about providing equal pay. Thankfully, many lawmakers are taking a different approach and passing equal pay bills on a state by state basis. In California, the most comprehensive paycheck equality bill to date recently went into effect. It enforces equal pay for men and women in similar jobs, regardless of race or religion. This is unique because the federal Equal Pay Act states a key phrase of “similar jobs”; differing pay cannot be offered for jobs that are similar.

The only way we can bridge the gap between gender, pay, and diversity is to work together. With a few changes, companies across the country can finally come forward and offer a solution to problem that has plagued our country for too long.

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