Today is Equal Pay Day. Women earn 82 cents for every dollar a man earns, which means we had to work all of last year, plus 3 full months into 2020, to earn what men did in 2019 alone. But we do have a couple of small wins.
First, this is an improvement over 2019. Last year’s Equal Pay Day was April 2, as women earned only 80 cents for every dollar a man earned. But, alas, this is a leap year—so it appears as though women really only worked one less day. Still, it’s something.
Second, women are not losing as much money as men during the Shelter In Place orders.
It’s the year 2020, and women still earn significantly less than men—sometimes, in the exact same role. Hired data shows that men are offered more for the same role, at the same company, 60 percent of the time. The current wage gap in tech is 3 percent, but 16 percent of women who have discovered a wage gap found that the difference was at least $20,000.
We clearly still have a long way to go.
Equal Pay Today calculates Equal Pay Days each year, to bring light to the pay inequities that plague women in the workplace. In 2020, data showed that most groups saw a smaller wage gap, apart from Native American women whose pay gap widened:
There is certainly no shortage of ways we can tackle this problem. Some suggestions offered in a previous blog post included conducting an equal pay analysis, diversifying your recruitment funnel, and building a formal compensation strategy. Here are a few more ideas to get the wheels turning:
Lean In reports that the “broken rung,” or the step from individual contributor to manager, is the biggest obstacle women face in the workplace. For every 100 men promoted and hired to manager, only 72 women are promoted and hired. As a result, there are fewer women in the pipeline for advancement to higher levels. Women hold nearly half of entry-level roles, but only 38 percent of manager roles, 30 percent of VP roles, and 21 percent of C-suite roles.
Black women and Latinas are more likely to be held back by the broken rung. For every 100 men who are promoted to manager, only 68 Latinas or 58 Black women are promoted.
Lack of advancement is contributing to the wage gap, and needs to be addressed. Your promotion rate by gender and race should give you an idea of where your company stands in this regard, so you can take necessary steps to correct inequities. This may include prioritizing stronger internal pipelines for promotions, building a formal mentorship program, and unconscious bias training for your team.
Annual review cycles can perpetuate and widen existing wage gaps, if left unchecked. Raises and promotions frequently go to manager favorites, the loudest in the room, or the squeaky wheel. Or, in the interest of “fairness,” a standard 3 percent raise may be offered to the entire team. Rather than risk widening existing pay gaps during review cycles, take the time to identify any existing pay gaps by race or sex. Then make strategic adjustments before merit-based raises are added into the mix to level the playing field.
The same concept can apply in times like these, when companies may be reducing salaries in order to mitigate layoffs. A standard 10-20 percent salary reduction across the board may seem fair, but existing pay inequities make that not so. Let’s say you have two employees in the same—or vastly similar—role, making the same level of impact, with the same level of experience and training. One is a Black woman earning $80,000, and the other is a White man earning $100,000. A 20 percent reduction would amount to $64,000 for the Black woman and $80,000 for the White man. In this scenario, the only truly “fair” approach would be to reduce salaries in a way that brought both employees down to the same amount.
Moms earn 70 cents for every dollar a dad earns. This pay gap is attributed to two phenomena. First, the “motherhood penalty,” in which mothers are perceived as less competent and dedicated than childless women. This penalty costs mothers an estimated $16,000 a year in lost wages. The average age of first-time mothers is 29, which means we stand to lose an average of $560,000 over 35 years.
The second phenomenon is the “daddy bonus.” While mothers see a reduction in pay after welcoming a little bundle of joy into the world, fathers actually see an increase in pay. Men in professional and managerial occupations receive a 6.9 percent increase, and men in other occupations see a 3.6 percent increase, on average.
This bias exists beyond pay, affecting expectations. Mothers are expected to prioritize their children over work, but men, often, are expected to do the opposite. For instance, mothers are frequently asked who is caring for their children while they work. The same question is arguably less common for fathers. When work and childcare conflict, the mother is expected to pick up the slack at home, and fathers may be given very little flexibility at work. Added to the fact that fathers are generally higher earners, the same expectations can manifest at home. Working parents can feel the need to prioritize the highest paying job, which can lead to women taking on more child rearing responsibilities—and leaving the workforce at a higher rate than men. And the vicious cycle continues.
Break the cycle by correcting pay inequities for women and mothers, and modernizing expectations for men and fathers. Put policies in place that allow—and encourage—male and female employees to take time off after the birth of a child. Offer flexible work arrangements for your employees, which are not only beneficial to parents. And during this pandemic, understand that all employees might have some reduced productivity—whether that’s due to lack of childcare, a noisy roommate, or stress and anxiety. Supporting both working mothers and fathers in the workplace can help close the mommy pay gap.
Each Equal Pay Day is a reminder that we are making some progress, but that we still have a long way to go. The wage gap for women closed by two cents in a year. We had to work 15 months to earn what a man earned in only 12 months. Latinas will have needed to work all of last year, and through October 29 of this year, to earn the equivalent of what a man earned last year alone.
Equal Pay Day is a way to reflect on the progress that still needs to be made, so we can be spurred into action.