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Equal Pay Day Changes Every Year — For Good Reason

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Image source: Stígur Már Karlsson/Heimsmyndir / iStock

Women’s History Month is a chance to shine a light on the many female accomplishments across the globe. However, it’s also an important month to highlight how much progress still needs to be made to achieve gender equality.

Thus, it’s fitting that Equal Pay Day — the date symbolizing how far into the year women must work to earn what men earned the previous year in the United States — falls toward the end of the month as a final reminder. Women who work full-time were paid 82 cents for every dollar paid to men in 2020, according to equalpaytoday.org.

This year’s Equal Pay Day is the earliest since it began in 1996, indicating that progress has been made in both closing the gender wage gap and increasing the awareness around the topic of pay equity within organizations. However, the coronavirus pandemic could threaten that progress. A study by Northwestern University calculated that women’s wages might not recover until 2040 as a result of the financial fallout from the pandemic.

What could make matters more difficult on this front is the reluctance of some employers to acknowledge pay equity issues within their own organizations, said Tanya Jansen, co-founder of beqom, a compensation management provider.

“Taking a step back to review internal compensation distributions across the board is how organizations can address any gaps,” Jansen said.

While there certainly hasn’t been widespread adoption of auditing pay equity practices by organizations, there was significant movement in the right direction ahead of the COVID-19 pandemic. Mercer’s 2020 update to its “When Women Thrive” research report identified a 21% increase in the number of employers conducting pay equity analyses, noting that the “increase reflects what has been a growing commitment of corporate leaders to achieve pay equity…”  However, as Mercer also noted in its update, it is hard to close the wage gap when many employers are foregoing pay increases and, in some cases, implementing furloughs and layoffs. 

A Bureau of Labor Statistics (BLS) study found that working women, particularly women of color, have been disproportionately impacted by the pandemic in what is being called a “she-cession” as compared to other recessions. This impact is the result of female-dominated industries, such as restaurants, hospitality and retail, having been severely affected by the pandemic with no rebound insight. Additionally, school closures leading to an extended period of remote learning has caused an exodus of women from the workplace since women are less likely to have the type of jobs that allow flexible work hours and remote work and more likely to assume the lion’s share of the child care responsibilities. 

A report from beqom found more than a third (36%) of employees don’t think their company pays employees fairly. Furthermore, women (40%) are more likely than men (31%) to think their company does not pay employees fairly. And the pandemic could exacerbate this, as more than two in five (40%) employees have not felt comfortable discussing pay with their direct manager during the pandemic, and a quarter (25%) report this was because they were nervous it would affect their employment status.

 “The pandemic put a spotlight on workplace culture including how employees view their employer’s values and fairness around current events, pay gaps and pay equity,” Jansen said. “Business leaders should examine how they are developing compensation packages for new or re-entry employees and think about how this person’s experiences, degrees and certifications and other attributes play a role in their compensation. To ensure pay equity and fairness, businesses should stick to a streamlined formula for all employees regardless of gender.” 

An additional wrinkle for employers to be cognizant of to improve their pay equity practices beyond the pandemic is to be aware of the hiring technology they are using, which could be eliminating qualified female and minority candidates. This issue has come up in several notable instances, which led to New York City recently proposing legislation to regulate this technology.

With work becoming more remote because of the pandemic, there’s some concern this could lead to increased use of this technology. However, Jansen foresees increased remote work being a positive for improving pay equity.

“A year into the pandemic, generally speaking, the workforce has shown that it can remain engaged and productive while working remotely. One thing I can see happening as a result of the pandemic is employees taking a stronger stance on receiving equal pay from their employer,” Jansen said. “With physical office spaces being less of a tether to employees, the workforce will likely be more willing to sever ties with their employer to work for an organization with fairer pay practices.”  

About the Author

Brett Christie Bio Image

Brett Christie is the managing editor of Workspan Daily.


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