Equal Pay Day Is Reminder of Existing Wage Gap

Kathy Gurchiek By Kathy Gurchiek April 4, 2017
Equal Pay Day Is Reminder of Existing Wage Gap

Seeing red today? People have been urged to wear that color April 4—Equal Pay Day—as a reminder of the gap between men's and women's wages.

In 2015, women working full time in the U.S. were paid 80 cents for every dollar men received on average, according to the American Association of University Women (AAUW) Spring 2017 report, "The Simple Truth about the Gender Pay Gap." The Economic Policy Institute (EPI) has a slightly more optimistic figure, with women earning 83 cents for every dollar a man earns—which translates into $3.27 less per hour based on the median hourly wage.

Because women earn less, on average, than men, they must work longer for the same amount of pay. April 4 symbolizes when the typical woman's earnings catch up to what a man earned the previous year, according to the National Committee on Pay Equity (NCPE). The NCPE originated Equal Pay Day in 1996 as a public awareness campaign. 

The wage gap is worse for some groups of female workers, according to the EPI:

  • Black and Hispanic female workers are paid 65 cents and 58 cents on the dollar, respectively, compared to the 81 cents that white, non-Hispanic female workers are paid and the 90 cents that Asian women are paid. That is, in part, because Asian and white men tend to earn more than black or Hispanic men, the EPI pointed out.
  • Women in male-dominated occupations are paid significantly less than similarly educated men in those occupations. Based on the rate that wages changed for women from 1960 to 2015, women are expected to reach pay equity in 2059, the AAUW reported. It won't happen until 2152, though, if the change continues at the slower rate that has been seen since 2001, the AAUW added.
[SHRM members-only toolkit: Managing Pay Equity]

What's the Answer?

Pay equity is an issue that has garnered headlines in recent years, getting a media boost when actress Patricia Arquette turned her 2016 Oscar acceptance speech into a rallying cry for pay parity. More recently, activists took to the streets March 8 for the "A Day Without a Woman" strike to underscore the value women bring to the socioeconomic system.

Countries around the world have been moved to action. Iceland has introduced tougher legislation that would make it the first country to require employers to prove male and female workers are earning equal pay. The U.K. is rolling out gender pay gap reporting regulations and in the U.S., the Paycheck Fairness Act has been reintroduced in Congress. It would require, among other things, for the Equal Employment Opportunity Commission to collect pay information from employers based on the sex, race and national origin of their workers. That data would be used to enforce federal laws prohibiting pay discrimination.

The "Women's March on Washington" and around the country in January highlighted the fact that many companies aren't ready to have a conversation about women's pay equity even as women and minorities continue to make up a larger number of organizations' employees, corporate gender strategist Jeffery Tobias Halter told SHRM Online in a January news report.

He advised that organizations demonstrate transparency and that CEOs ask HR to create a report on the organization's workforce composition by gender, race, and job grade.

That's what Cisco did, according to Shari Slate, the company's chief inclusion and collaboration officer. Cisco, a technology conglomerate headquartered in San Jose, Calif., was one of 26 founding signers of the White House Equal Pay Pledge in June 2016. As part of its pledge, the company vowed to create pay parity strategies that include regular reviews of its pay data and to fix gaps it identifies by "fully funding robust solutions."

A fiscal 2016 audit found what Cisco said were minor pay disparities, resulting in about 2 percent of its U.S. employees receiving pay adjustments. The funds required for the adjustments represented less than 0.1 percent of its U.S. base payroll, according to Cisco.

It also completed a global pay parity analysis, resulting in pay adjustments of just over 1 percent; adjustments totaled less than 0.02 percent of its global payroll. Cisco said it's investing about $2 million annually into "holistic, global pay parity strategies."

Cisco uses a pay parity framework that "validates parity through regular testing and proactively monitors, intervenes and minimizes disparities over time," Slate said in an e-mail interview with SHRM Online

Cisco also introduced the Multiplier Effect, a program that challenges leaders at technology companies to pledge to sponsor a diverse person to advance to the next job level. That could be someone of a different race, culture, ability, gender, generation, ethnicity or sexual orientation.

The idea is to build a diverse pipeline of talent at every level in the industry.

"Ongoing studies indicate that companies in the technology sector employ fewer women and fewer minorities than other private-sector industries, particularly in management, executive and board roles," Slate said. 

Sponsorship is the key to quickly advancing diverse workers at every job level in the tech industry, she said, and that takes "a structured, proactive and sustained relationship between a leader and a sponsoree."

The Center for Talent Innovation, she noted, has reported that people with sponsors are 23 percent more likely to move up in their career than those without sponsors.

Additionally, Cisco has joined forces with a number of companies across multiple industries to form the Employers for Pay Equity consortium, according to a company blog post from Slate. 

Salesforce, which provides cloud-based customer service tools for businesses, is another company making strides toward pay equity. CNN reported Tuesday that the San Francisco-based company has raised the pay of 11 percent of its employees around the world after another evaluation of salaries. The company examined salaries last year, comparing people with similar roles and adjusting for location; 6 percent of employees had their pay raised. Both women and men received boosts, according to CNN.

Pay equity, Cisco's Slate told SHRM Online, "starts with leadership commitment and a clear vision of why this is important and how fair pay fits into your business strategy and culture.

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