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The Gap Is Growing Again for U s Workers

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#MeToo and #TimesUp protests most the treatment of women in the workplace accept brought renewed attention to gender pay equity. This brief looks at 3 legislative solutions that aim to close the gap past increasing pay transparency and pushing employers to fix salaries to the position, not the history of the person doing the job.

Overview

Despite a long history of legislation aimed at preventing employers from paying women less than men for the aforementioned work, a gender wage gap prevails in the United states. In recent years, state policymakers have strengthened efforts to eliminate the gender pay gap, focusing on three approaches:

  • Laws that prohibit employers from enforcing pay secrecy (CA, CO, IL, LA, ME, MI, MN, NH, NJ, VT)1
  • Laws that ban employers from asking potential hires nearly past earnings (CA, DE, MA, OR; the cities of Philadelphia, Pittsburgh, New Orleans, and New York)ii
  • Laws that require employers to report gender wage gap data (AK, IL, MN, NH)3

By increasing pay transparency and banning employers from asking about previous pay, lawmakers hope to undo discriminatory hiring and pay practices.

The trouble

Women are paid less money for the same work: In the U.S. today, women who piece of work full time make eighty cents, on boilerplate, for every dollar that white men make. The Economic Policy Constitute shows that this wage gap as well varies significantly by race:iv Asian women earn 90 cents on the dollar, white women 81 cents, blackness women 65 cents, and Hispanic women just 58 cents on the dollar in comparing to white men. Wage differences are starkest among high-income earners, with women only making 74 cents on the dollar compared to their male counterparts.

The wage gap persists across education levels and occupations:Despite the hope that women's educational attainment might level the playing field in earning power, educational activity does non appear to make a difference; women are paid less at every pedagogy level in comparing to men.5

The Institute for Women's Policy Research shows that women earn less than men in most all occupations, whether it is work predominantly performed by women or men.6 For example, even in a female-dominated field like education, female elementary and heart schoolhouse teachers make only 87 pct of what a man makes for performing the same job. In male person-dominated fields like financial direction, women earn roughly 70 percent of what men earn for the same work.

The wage gap has long-term economic impacts:Pay discrimination is pervasive in American civilisation, and has steep economical consequences. According to the Institute for Women's Policy Research, a typical adult female who worked full fourth dimension and year circular would lose out on roughly a half one thousand thousand dollars over her lifetime, compared to her male person counterpart. A higher-educated woman would lose even more than: roughly $800,000 over her lifetime.7

Why the wage gap persists: There are several possible explanations for the persistence of the gender wage gap: 1. Women may be more probable to choose lower-paying occupations or positions (such every bit preschool teacher versus high school teacher); 2. Women are more likely to reduce or go out paid work in order to care-have for children, thus reducing their earnings and slowing career advancement; 3. Employers' pay setting is affected by gender bias and bigotry; and iv. Women are less aggressive in negotiating over pay (or women'southward assertiveness is less likely to exist successful).8 This brief focuses on policies that seek to level the playing field in pay negotiation, by increasing transparency and pushing employers to set pay according to the job, non the person.

1. Don't prohibit workers from discussing pay

To counter pervasive gender bias, state policymakers in several states have passed laws banning pay secrecy. Pay secrecy prevails when companies prohibit employees from openly discussing pay with colleagues. This secrecy enables wage gaps to persist.

Figure 1. The gender and race wage gap: Median almanac earnings for full-time workers
Figure 1

Source: U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements

Pay secrecy is considered illegal nether Section seven of the federal National Labor Relations Act, which protects not-supervisory employees from employer retaliation if they choose to discuss wages with colleagues.9 However, a 2010 survey plant that 66 percent of individual-sector workers and 15 percentage of public-sector workers were either formally or informally prohibited by their employers from discussing pay with colleagues.10 Often, employers include formal prohibitions on sharing wage data in employee handbooks. Employers may also encourage a culture of pay secrecy by discouraging wage sharing, or handing out paychecks in private.eleven Social norms in the U.S. may also hold employees back from inquiring about others' earnings.12 Without feeling free to inquire about how much comparable colleagues are earning, women may non even know that they are making less than their male counterparts, and thus are unlikely to enhance complaints or enquire for comparable salaries.

Starting in the 1980s, Michigan (1982) and California (1984) adopted pay secrecy laws to prohibit employers from discriminating confronting employees who ask nigh salaries in the workplace. The consequences imposed past such laws vary past state, but the general intent is to protect workers' rights to share and discuss information about employee salaries. In a paper published in IRLE's periodical,Industrial Relations, Marlene Kim investigates the effects of state pay secrecy laws. Kim (Professor of Economics at the University of Massachusetts, Boston) compares earnings in six states that had banned pay secrecy earlier 2012 to earnings in states that had not. Using a regression method13 to construct a comparison that controls for other factors (e.g., worker demographics and regional wage differences), Kim finds that women's earnings are three percent higher in states that take outlawed pay secrecy. She too finds that in states with such policies, the gender wage gap is reduced by as much as 12 to 15 percentage for workers with a college caste, and by 6 to eight per centum for workers without. This finding lends considerable support for adopting such prohibitions in club to close the gender wage gap.

Federal reform failure
Despite evidence that such reform will reduce pay inequity, efforts to innovate similar worker protections at the federal level have been unsuccessful. Kim notes that over 20 attempts take been made to amend the Fair Labor Standards Human activity, all of which take stalled or been voted downwards. Such legislation (similar the Paycheck Fairness Act) would take increased penalties against employers that enforce pay secrecy and strengthened remedies for employees. More progress has been made at the state level. In 2016, California, Delaware, Maryland, and Connecticut strengthened their state-level pay secrecy laws.14 As of 2017, eighteen states now have laws on the books to bar employers from discriminating or retaliating against employees who inquire about wages.15

2. Don't base employee pay on salary history

Equal pay advocates posit that unfair cultural practices have evolved in the salary negotiation process to perpetuate pay inequities for women. One such practice is when employers ask potential hires about salaries earned at prior jobs during negotiations. Since women tend to earn less in nearly all occupations in comparing to men,16 the practice of existence asked to disclose one's previous salary can chemical compound inequalities and follow a adult female over the course of her career.

IRLE kinesthesia affiliate Laura Kray, Professor at UC Berkeley'southward Haas School of Business concern, studies the role of gender in negotiations. In a literature review of empirical research on the topic,17 Kray and co-writer Jessica Kennedy written report that men and women alike typically stereotype women as poor negotiators. The authors find that cultural biases privilege men in negotiations, since they are more probable to display characteristics associated with masculinity, such as assertiveness, forcefulness, and competition, that benefit them in discussions nearly pay. Women who act assertively and display "masculine" traits during negotiations may be viewed unfavorably by employers who perceive such qualities equally too ambitious. As a result, women may be more apprehensive well-nigh the negotiation process than men and may be more likely to autumn into feminine stereotype traps and settle for lower wages,18 compounding a vicious cycle of gender pay bigotry.

Banning salary history questions from the negotiation process would reduce the likelihood that women would have to negotiate from a lower starting indicate than male counterparts. In other words, banning the question makes it possible for women to enter into negotiations on level footing with men. In recent attempts to fight pay disparities from post-obit a woman over the class of her career, a moving ridge of state and metropolis reforms were enacted during 2022 and 2022 that ban employers from request chore candidates their salaries from previous jobs. California, Delaware, Massachusetts, and Oregon, along with the cities of New Orleans, New York City, Philadelphia, and Pittsburgh, now have such bans.nineteen

The idea that the negotiation process itself is to blame for gender pay disparities suggests other possible remedies. For example, the CEO of Reddit has banned salary negotiations at her visitor altogether. And while Massachusetts has banned the bacon history question, the state now besides requires employers to publish salary ranges based on the skills and qualifications needed for the task, which provides transparency for the negotiation procedure.20

3. Brand salaries public

Other states and companies are too increasing salary transparency to reduce the gender wage gap. The logic of salary transparency is straightforward: when employees have access to information about on what their co-workers earn, and pay gaps at specific employers are exposed, employers will be pressured to fix pay disparities.

States like Alaska, Illinois, Minnesota, and New Hampshire already collect and publish data on the pay gap. 21 Even so, information transparency proposals accept recently received pushback. In 2017, California Governor Jerry Brown vetoed AB 1209, the Gender Pay Gap Transparency Act, in a state with 1 of the strongest equal pay environments in the country. The vetoed bill would have required companies with more than 500 employees to collect and study salary information for men and women in the same job to the land, which would then exist published online.22 At the federal level, President Trump suspended an Executive Lodge put in identify by President Obama that would have avant-garde pay transparency for federal contract employees.23 The Executive Order would have required companies to study salaries past race and gender.

In the curt term, company efforts to increment bacon transparency may outpace authorities action. For instance, companies like Amazon, Apple, and Gap have recently conducted internal audits of their employee pay data.24 Moreover, just final year, investors like Arjuna Majuscule urged several tech companies to publish the pay gap betwixt male and female person employees, and will proceed pushing banks they work with to practise the aforementioned.25 When corporations atomic number 82 the way to resolving gender pay inequalities, this can be appealing to potential employees. In another written report co-authored by Kray, the authors find that undergraduate business concern students—especially women—would rather work for companies that prioritize fairness and ethical business practices.26

Conclusions and farther inquiry

After several decades of documented gender pay inequality, there is a growing phone call for policymakers to do something about it. Despite potent evidence that the policies described here volition be constructive, any progress on closing the gender wage gap is likely to remain at the state and local level, or within the corporate sector, for the time being. Indirect policy routes can be pursued also. Inquiry conducted by the Obama administration found that minimum wage increases nowadays a significant opportunity for promoting equal pay for women, especially for those at the lesser end of the income distribution.27 Women are more likely to be concentrated in occupations that pay the minimum wage and in tipped occupations.28 Family-friendly policies, such every bit paid family and medical leave, affordable kid care, and early childhood didactics programs coupled with equal pay policies could significantly reduce the gender wage gap while helping single mothers with children.29 These are all policies on which states such every bit California have already taken the lead in the absence of federal action.

This cursory draws on inquiry past IRLE faculty affiliate and UC Berkeley Professor Laura Kray on gender discrimination in pay negotiations, and inquiry on pay secrecy laws by Professor Marlene Kim published in IRLE's academic periodical:Industrial Relations: A Periodical of Economy and Club

Author: Erin Coghlan, a doctoral candidate at the Graduate School of Education at UC Berkeley. Series editor: Sara Hinkley, Associate Manager of the Plant for Research on Labor and Employment.

FEATURED Enquiry

Jessica A. Kennedy & Laura J. Kray (2015). A pawn in someone else's game? The cognitive, motivational, and paradigmatic barriers to women'south excelling in negotiation. Research in Organizational Behavior, 34, 3-28.

Marlene Kim (2015). Pay secrecy and the gender wage gap in the United States. Industrial Relations: A Journal of Economic system and Society, 54(4), 648-667.

References

  1. States vary in terms of which employees are covered, and under which circumstances. For example, not all states cover both public and private employers, and not all states protect supervisors and managers besides as employees. Moreover, in states similar Illinois, New Jersey, and Maine, pay secrecy is prohibited in Equal Employment laws, but only when employees are investigating unequal pay claims. For more information meet: Kim, Chiliad. (2015). Pay secrecy and the gender wage gap in the U.s..Industrial Relations: A Periodical of Economy and Lodge, 54(4), 648-667 and Women'southward Bureau, U.Due south. Department of Labor (2014).Fact canvass: Pay secrecy. Washington, DC: U.S. Section of Labor. Retrieved January xv, 2018, from https://www.dol.gov/wb/media/pay_secrecy.pdf
  2. New Orleans and Pittsburgh simply comprehend public employers. All other states, cities, and Puerto Rico cover both public and private employers. For more data see: Cain, A. & Pelisson, A. (Oct 26, 2017). ix places where people may never have to answer the dreaded salary question again.Business Insider.Retrieved January 15, 2018, from https://www.businessinsider.in/nine-places-where-people-may-never-take-to-reply-the-dreaded-salary-question-again/
  3. States may vary in whether they collect data from public or individual employers. For more data, see: Nielson, K. (2018).AAUW policy guide to equal pay in the states. Washington, DC: AAUW. https://www.aauw.org/resource/state-equal-pay-laws/
  4. Gould, E., Schieder, J. & Geier, K. (2016).What is the gender pay gap and is it real? Washington, DC: Economical Policy Constitute. https://www.epi.org/files/pdf/112962.pdf
  5. Miller, K. (2018).The elementary truth well-nigh the gender pay gap report. Washington, DC: American Association of University Women. https://www.aauw.org/research/the-simple-truth-about-the-gender-pay-gap/
  6. Hegewisch, A. & Williams-Baron, E. (2017).The gender wage gap past occupation 2016; and past race and ethnicity. Washington, DC: Institute for Women's Policy Research. https://iwpr.org/iwpr-general/the-gender-wage-gap-by-occupation-2016-and-by-race-and-ethnicity/
  7. Institute for Women'southward Policy Research. (2016). Status of women in the United states (online database). https://statusofwomendata.org/explore-the-data/employment-and-earnings/employment-and-earnings/
  8. For example, see: Kennedy, J. A. & Kray, L. J. (2015). A pawn in someone else'due south game? The cerebral, motivational, and paradigmatic barriers to women's excelling in negotiation. Research in Organizational Beliefs, 34, three-28; and Women's Bureau, U.Due south. Department of Labor (2017).Issue brief: Women's earnings and the wage gap. Washington, DC: U.S. Department of Labor. Retrieved February xx, 2018, from https://world wide web.dol.gov/wb/resources/Womens_Earnings_and_the_Wage_Gap_17.pdf
  9. Kim, M. (2015).
  10. Institute for Women'south Policy Enquiry (2017).Private sector workers lack pay transparency: Pay secrecy may reduce women's bargaining power and contribute to gender wage gap. Washington, DC: Establish for Women'south Policy Enquiry. https://iwpr.org/publications/private-sector-pay-secrecy/
  11. Kim, Thousand. (2015).
  12. Colella, A., Paetzold, R. L., Zardkoohi, A., Wesson, M. J. (2007). Exposing pay secrecy.University of Management Review, 32(i), 55-71.
  13. Kim (2015) uses a deviation-in-difference-in-difference (DDD) human capital letter wage regression model. The model controls for variables such as education levels, piece of work feel, marital status, region of residence (metropolitan or central urban center) race, and ethnicity. This model is used to examine the effect of policy changes on women's earnings.
  14. Zoppo, A., & Petulla, S. (2017). See what your state is doing to shut the gender wage gap. NBC News. Retrieved December 15, 2017, from https://world wide web.nbcnews.com/news/us-news/see-what-your-state-doing-close-wage-gap-n741351
  15. Nielson, K. (2018).AAUW policy guide to equal pay in united states of america.Washington, DC: AAUW. https://world wide web.aauw.org/resources/country-equal-pay-laws/
  16. Hegewisch, A., Williams-Baron, E. (2017).
  17. Kennedy, J.A., & Kray, 50.J. (2015).
  18. Kray, Fifty.J., & Gelfand, M.J. (2009). Relief versus regret: The effect of gender and negotiating norm ambivalence on reactions to having i's first offer accepted.Social Knowledge, 27, 418-436.
  19. Cain, A. & Pelisson, A. (2017)
  20. Meet the post-obit: Chandler, Grand. A. (2016). More land, city lawmakers say salary history requirements should exist banned.The Washington Mail. Retrieved December 15, 2017, from https://www.washingtonpost.com/local/social-issues/more-country-city-lawmakers-say-salary-history-requirements-should-be-bannedadvocates-for-women-argue-that-the-practice-contributes-to-the-nations-pay-gap/2016/eleven/14/26cb4366-90be-11e6-9c52-0b10449e33c4_story.html and Kray, Fifty. (2015). The all-time way to eliminate the gender pay gap? Ban salary negotiations.The Washington Post. https://www.washingtonpost.com/posteverything/wp/2015/05/21/the-best-way-to-mode-to-eliminate-the-gender-pay-gap-ban-salary-negotiations/
  21. Nielson, K. (2018).
  22. Goodwin, K. (2017). California Governor vetoes two bills related to public report of gender wage differentials and discrimination based on "reproductive health decisions."Labor & Employment Law Web log. https://world wide web.laboremploymentlawblog.com/2017/10/articles/california-employment-legislation/cagovernor-vetoes-reproductive-health-decisions/
  23. Paquette, D. (2017). Trump assistants halts Obama-era rule to compress the gender wage gap.The Washington Post. https://world wide web.washingtonpost.com/news/wonk/wp/2017/08/xxx/the-trump-administration-just-halted-this-obama-era-rule-to-shrink-the-gender-wage-gap/
  24. Raghu, M., & Lowell, C. (2017).Employer leadership to accelerate equal pay: Examples of promising practices. Washington, DC: National Women's Law Eye. https://nwlc.org/resources/employer-leadership-to-advance-equal-pay-examples-of-promising-practices/
  25. McGregor, J. (2017). The investor who pushed tech firms to publish their pay gap is going after big banks.The Washington Postal service. Retrieved Dec xv, 2017, from https://www.washingtonpost.com/
  26. Kennedy, J. A., Kray, L. J. (2014). Who is willing to sacrifice ethical values for money and social status?: Gender differences in reactions to upstanding compromises.Social Psychological and Personality Scientific discipline, 5(1), 52-59.
  27. National Economic Quango, Quango of Economic Advisers, the Domestic Policy Quango, and the Department of Labor (2014).The impact of raising the minimum wage on women: And the importance of ensuring a robust tipped minimum wage. Washington, DC: The White House. https://obamawhitehouse.archives.gov/sites/default/files/docs/20140325minimumwageandwomenreportfinal.pdf
  28. Allegretto, Southward. A. (2014).The touch of raising the minimum wage on women. Berkeley, CA: Institute for Enquiry on Labor and Employment. http://irle.berkeley.edu/the-impact-of-raising-the-minimum-wage-on-women/
  29. Kim, Thou. (2015).

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Source: https://irle.berkeley.edu/state-policy-strategies-for-narrowing-the-gender-wage-gap/

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