March 24, 2021. Today is Equal Pay Day, which marks the day the average woman must work until in the current year – plus the 365 days of the prior year – to earn the same amount that men earned last year. Nearly three months more! Said differently, the average woman effectively stops getting paid on October 29th and works for free for the rest of the year due to the gender pay gap.
These statistics vary significantly based on a woman’s race and ethnicity, with women of color generally faring far worse.
Equal Pay Day is a day to bring attention to the issue and drive change. It is not a day to celebrate, as was suggested by Rep. Nancy Mace (R -SC) today at the hearing on gender pay equality held by the House Oversight Committee. Sadly, during the hearing, it became apparent that, like most issues today, the issue of pay inequality, both the existence of the gender pay gap and how to remedy the inequality, is strongly divided along party lines.
However, this is not a new issue. Recognizing that women had been paid significantly less than men for far too long, in 1963, Congress enacted the Equal Pay Act. The Act provides that an employer may not discriminate against an employee on the basis of sex by paying an employee less than an employee of the opposite sex for:
equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.
In 1963, women on average were earning $0.59 on every dollar earned by men. And while women have made progress, it has been slow, and there remains a long way to go, particularly for women of color. Unfortunately, the Equal Pay Act did not accomplish all that was intended, in part due to the enumerated exceptions that give employers significant discretion when making pay-related decisions.
Now, nearly 60 years later, women only earn $0.82 on average for every dollar earned by men, and, according to a recent Business.org study, the pay gap has remained static since 2010.
Unfortunately, that is not the end of the story. When broken down further based on race/ethnicity, as compared to a dollar earned by their male counterparts:
· Asian American and Pacific Islander (AAPI) women earn an average of $0.85 (with some subgroups, such as Burmese women, earning as little as $0.52);
· Black women earn $0.63;
· Native America women earn $0.60; and
· Latina women earn $0.55.
What does that mean? AAPI women need to work an additional 67 days, Black women 214 days, Native American women 250 days, and Latina women 293 days before catching up to their male counterparts! These numbers are quite troubling, and they highlight the multiple biases women of color are facing.
If you throw motherhood into the mix, the numbers are even worse. According to the Center for American Progress, mothers earned an estimated $0.75 for every dollar earned by fathers, with AAPI mothers overall earning $0.91, white mothers $0.71, Black mothers $0.53, American Indian mothers $0.50, and Latina mothers $0.46. There is no denying the “Motherhood Penalty.”
The gender pay gap also varies by industry. Data clearly indicates increased education has the effect of widening the gender pay gap. In a few instances, such as with fast food workers and bus drivers, women are paid more on average than their male counterparts (2%). In contrast, according to the Business.org study, women in the legal, medical and financial professions earn 45%, 35%, and 34% less, respectively, than their male counterparts. And in the legal and medical fields, the gender pay gap is growing!
Just today, Megan Rapinoe testified before the House Oversight Committee that the US Women’s National Soccer Team earns $0.38 for every dollar paid to their counterparts on the US Men’s National Soccer Team – that is a staggering 62% less. Unfortunately, these obscene pay inequities are not uncommon in professional sports.
Based on the data, if the average woman works full-time over a 40-year career, she will earn approximately $406,000 less than her male counterparts, while Black and Native American women will earn nearly $1 million less, and Latina women – more than $1.1 million less!
That is not the end of the economic hits for women. For example, a woman’s decreased earnings impact retirement as (1) social security will be reduced as a result of paying in less over her career; (2) to the extent eligible, she will have a lower pension as it keys-off of earnings; and (3) she had less income to put towards retirement savings. Compounding all of this, women also hold more student loans as a result of earning less.
If we do nothing, at the current pace, the gender pay gap generally will not close until 2059, and it will take a full century before Black and Latina women attain pay equality! And that is without factoring in the devastating impact the pandemic is having on women. Currently, one in four women is contemplating downgrading her career or leaving the workforce. Millions of women have already left or been forced out. As a result, it could take even longer to close the gap.
Some of the things we can do to close the gap and secure gender pay equality include:
· requiring pay transparency;
· government collection of employer’s pay data and conducting random audits;
· creating financial penalties for non-compliance;
· banning employers from asking for salary history and requiring a specific stated salary in the hiring process;
· holding HR departments and other decisionmakers accountable for instances of unconscious bias;
· prohibit the use of nondisclosure agreements and making arbitration mandatory if any disputes arise; and
· enacting the Equal Rights Amendment.
In the weeks to come, we will explore in detail these and other ways to close the gender pay gap.
One thing is for certain, the gender pay gap has nothing to do with women’s choices. Moreover, a woman cannot educate herself more or simply continue to work hard and be great at her job to overcome pay inequality.
The time has come to stop blaming women for this problem.
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