When the Gender and Racial Wage Gap Collide: Black Women's Equal Pay Day

August 3 is Equal Pay Day for Black women in 2021. 

That means Black women had to work all of 2020, plus the first 7 months of 2021, to earn what White, non-Hispanic men earned in the United States in 2020 alone. 

To put it another way, the average Black woman would need to work for 63 years to earn what the average White man could earn in 40—or lose $946,120 over a 40-year career. That could be the difference between owning a home, paying for college tuition, or retiring at a reasonable age.

Why is this happening, and what can we do about it?

Intersectionality matters

Looking at the gender and racial wage gaps independently can already feel alarming. Women earn 82 cents for every dollar men earn. Black workers earn 73 cents for every dollar White workers earn. But the difference is even more pronounced for Black women, who earn just 63 cents for every dollar the average White man earns.

That’s why intersectionality matters. Black women have different workplace experiences than White women, Asian women, Latinas, Black men, and so on. 

And as 54 percent of Black women say they are the only Black person or one of the only Black people in the room at work, their experiences can be overlooked if they aren’t specifically sought out. 

Consider your compensation data. You may find that your Compa ratios for men and women at your organization are similar. But the reality may be that Black women have consistently low Compa ratios. If there aren’t many Black women at your organization, this isn’t likely to skew your averages to help you identify this issue. 

It’s important to look at your data by intersectional group to uncover potential issues, so you can address them and improve the feelings of inclusion and belonging for all team members.

Occupational segregation and the opportunity gap are major contributing factors to the racial wage gap

While Black women make up 6.2 percent of the overall workforce, they make up 10 percent of the low-wage jobs (those paying less than $22,880 annually). Their share of high-wage jobs (those paying more than $100,000 annually) is less than half their representation in the overall workforce. 

Either way, Black women are typically paid less than White, non-Hispanic men in the same occupations. Black women in low-wage jobs earned 60 cents for every dollar paid to White, non-Hispanic men. And Black women in high-wage jobs are paid 64 cents for every dollar paid to White, non-Hispanic men in the same occupations, accounting for a loss of $1.6 million dollars over a 40-year career.

Black women are also less likely to be hired or promoted into leadership roles, further widening the wage gap. Only three percent of C-level executives and 11 percent of Vice Presidents are women of color. For every 100 entry-level men who are promoted to manager, just 58 Black women are promoted. And for every 100 men hired to manager, 64 Black women are hired. 

Source: Women in the Workplace 2020

This lack of career progression limits lifetime earning potential for Black women, widening the pay gap as they get older. Younger Black women (ages 15-24) working full-time, year round typically earn 81 cents for every dollar paid to White, non-Hispanic men. That drops to 65 cents for 24-44 year old Black women, and 61 cents for 45-64 year olds.

Measuring equity will help you address the wage gap for Black women

The wage gap is a multifaceted problem with solutions that will be unique to each company. For instance, you may have pay equity within each job level, but find a wage gap due to underrepresentation of Black women in leadership positions. In this case, the root issue may be that you’re not hiring or promoting enough Black women into these roles. Alternatively, the root issue could be that you’re not able to retain Black women on your leadership team.

Dig into your pay equity metrics and other data to help you truly understand where your inequities lie, how you might address them, and where you’re making progress.

For instance, you might measure:

• Average promotion rate and time to promotion overall, and by intersectional group
• Average performance review score overall, and by intersectional group
• Representation for each intersectional group at each job level
• Average salary and Compa ratio by intersectional group
• Turnover rates overall, and by intersectional group
• Recruitment conversion rates by intersectional group

If anything looks off, investigate further. For instance, if you see a slow time to promotion for Black women, sync with your managers to learn why specific team members haven’t been promoted. 

Look for trends, such as a department with inexplicably low Compa ratios or unusually high turnover for Black women. This is perhaps a sign you need to revisit manager training.

And celebrate your wins to demonstrate your commitment to closing the wage gap, and continue building momentum toward your larger goals.

Final thoughts

A lot of attention is given to the gender and racial wage gaps independently, and it’s a mistake not to look at intersectionality in this practice. Black women face unique challenges in the workforce, including (but not limited to) pay inequity. Take the time to understand these challenges—not just through data, but through meaningful conversations with your team members. The simple act of checking in with your people can help you level-up your HR and compensation programs.