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Mind the Gap: Seeking Far-Reaching Solutions to Pay Equity

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The gender pay gap has closed some since the Equal Pay Act was signed in 1963, but many politicians and media accounts cite studies that claim women are still paid 80 cents for every dollar paid to men. Some compensation thought leaders contend such conclusions are oversimplifications because they fail to consider job-related pay equity factors such as disparate pay for different professions, the availability of advancement opportunities, education, work experience, tenure and pay-for-performance.

Korn Ferry research discovered that when evaluating men and women at the same job level in the United States, such as director, the wage gap falls from around 20% to 7%. And when considering the same level within the same company, the gap is further reduced to 2.6%. When male and female employees at the same level and the same company worked in the same function, the average gap amounted to 0.9%.

WorldatWork published two articles in 2018 that challenged the “80 cents on the dollar” contention. John H. Davis, Ph.D., CCP, took a deep statistical dive into the gender pay gap in an October 2018 Workpan article and John Kilgour, Ph.D., detailed the history of gender pay gap legislation in a second quarter WorldatWork Journal research paper.

However, Korn Ferry associate client partner Tracy Bosch, who is based in Canada, said an unconscious bias in pay still exists.

“I get disheartened when I hear HR leaders and reward professionals tell me that gender pay is not a priority issue for them because they've done their pay equity analysis and closed gaps where they needed to,” Bosch said. “In the majority of cases, pay equity analyses are approached from the perspective of compliance with legislation and don’t go far enough to identify and address opportunities to close the actual gender pay gap.” 

Many countries are addressing pay equity and the gender wage gap. “It’s an issue that employers must address,” said Melissa Murdock, WorldatWork director of external affairs. Until the gap closes, policy makers will continue to search for solutions to force the issue.

CBC News discusses why gender pay equity in Canada is taking so long. 

Pay Equity Roundup 

Gender Pay Gap: Bank on it
Last week, Citigroup Inc. became the first bank in the United States to publish its unadjusted gender pay gap. The figures were troublesome. The disclosure revealed that among its global workforce, female employees earn 29% less than men do. The disclosure also found that U.S. minorities earn 7% less than non-minority employees. In this Forbes article, it shows that women account for 19% of C-suite positions in financial services, which is slightly lower than the 22% average for U.S. women overall, according to a McKinsey study. Ruth Umoh writes that this lack of upward mobility creates a self-perpetuating cycle, in which women find it difficult to advance because there are fewer women in charge to help them climb the ranks.

Putting Stock in Pay Equity
Intel announced it had closed the gender and racial pay gap for all its U.S. employees in 2017. And now the company has taken things a step further. Emma Hinchliffe of Fortune writes that the company has incorporated stock compensation into its pay gap calculations, which it didn’t do in 2017. Intel revealed that 5,782 employees — about 5.1% of its workforce — received a compensation adjustment as a result of the initiative to close the pay gap.

European Momentum
In this Mondaq piece, the authors provide a rundown of European legislation that has been implemented to assist in closing the gender pay gap. The article touches on regulations in France, the United Kingdom, Ireland and Portugal. As for the future, the authors note that while current legislation addresses pay equity, that’s just one step. Addressing the gender imbalances that exist in the workplace such as workplace culture and family and caring responsibilities, making it more difficult to progress to the most senior positions. 

A Maryland Movement
Using a Morgan State University commencement speech by Sen. Elizabeth Warren (D-Mass.) as her launching pad, Pamela E. Queen implores the state of Maryland to address its pay equity issues in this Baltimore Sun column. Queen represents District 14, northern Montgomery County, in the Maryland House of Delegates. In the column, she notes that white women make $10,074 less in earnings than their male counterparts, while black women make an average of $22,054 less per year than white men.

Restoring Executive Order in New Mexico
In 2009, then-Gov. Bill Richardson signed an executive order “Fair and Equal Pay for All New Mexicans,” which implemented a gender pay equity initiative for the state of New Mexico. Richardson’s successor, Gov. Susana Martinez, ignored the order and its requirements, writes Martha Burk in this Santa Fe New Mexican column. In the piece, Burk calls for newly elected Gov. Michelle Lujan Grisham to enforce the existing executive order.

Labor Laws Help Balance the Scales
Forty-four countries and territories changed laws and processes that affected womens’ ability to obtain employment between 2015 and 2017, according to data collected by the Council of Foreign Affairs.

Where labor laws are equal for women and men, women work – and earn – more. This benefits their families and helps economies grow, according to the World Bank. Countries could increase their labor productivity by up to 25% simply by eliminating legal barriers preventing women from working in specific occupations and sectors.

Legal gender differences decrease female labor-force participation and undermine GDP growth, according to the International Monetary Fund.

About the Author 

Brett Christie is a staff writer at WorldatWork. 


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