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How do you Solve a Problem Like Pay Inequality?

Pay Inequality

They say that democracy dies in darkness.  That may be true, because inequality thrives in darkness.  With all the publicity about sexual harassment, we need to note the approach of the April 4th Equal Pay Day. That is the day when a woman’s salary finally catches up to the man’s salary for the prior year (with it taking much longer for women of color). And we should remember that gender-pay inequality is just as pervasive and longstanding a problem for women in the workplace as sexual harassment.  The pay gap has narrowed in recent years but, on average, women still earn only 80 cents for a dollar earned by a male for comparable work.

There have been many high profile and shocking examples of pay inequality recently. Mark Wahlberg was paid $1,500,000.00 for reshoots for the film All The Money in The World, while his co-star Michelle Williams was paid $1,000.  BBC paid Martina Navratilova almost 10 times less than John McEnroe for broadcasting work on Wimbledon.  Claire Foy, the actress playing Queen Elizabeth in The Crown, was paid less than the actor who played the lesser role of the Queen’s husband, Prince Phillip. Hoda Kobt took over hosting Today after Matt Lauer resigned-and we all remember why he resigned-but earns less than one-third of what Matt Lauer earned even though she is doing his exact job.

If this doesn’t make you angry, it should.  Pay disparity was justified in the (way) past because “the man has to support a family.” But how does this happen today?  Why does it continue to happen?

One reason this happens is because of the lack of transparency  over compensation decisions.  Employers routinely tell employees never to discuss compensation. “Compensation is private and is not to be shared with others.”  If you are lucky enough to have a contract, odds are your contract says compensation is strictly confidential and must not be shared with others.

Some employers, knowing an outright ban on sharing pay information is illegal, merely “encourage” employees not to talk about their salaries.  They send the message that discretion about pay is appropriate and sharing would not be received well.  Employees usually get the message.

But this practice of silencing employees violates the National Labor Relations Act. That law forbids an employer from taking actions that discourage employees from engaging in “protected concerted activity” (i.e. talking) related to terms and conditions of the workplace (i.e. salaries). The law is clear that discussing wages and salary is a protected activity for which an employee cannot be disciplined. But even with this protection, many employees don’t share.

Aside from directions by the employer, people are often just plain reluctant to discuss what they earn.  And this lack of transparency in pay allows wage inequality to thrive So, how do we turn on the lights?

There are no easy solutions, but the starting point must be a willingness of employees to talk about their compensation.

Employees must feel free to share wage information with coworkers and even others in the industry without fear of retaliation.  Women must ask what their male peers are being paid.  Yes, they may not get honest answers—as some news reports quoted Navratilova as saying she had asked and was told she was paid a “comparable amount.”  But they get no answer if they do not ask.

We must also acknowledge, however, that transparency can also cut the other way. To address the problem of pay inequality, some states passed laws forbidding employers from asking applicants about salary history.  The theory is that it will help end historical disparity: if a woman was paid less than her male peers in an old job and her new salary is based on her salary history, pay disparity continues.

The legal claims that exist for pay inequality will be the subject of a different blog.  Several types of claims exist, and they have differing deadlines and differing remedies. And, a salary difference between a male and female performing the same kind of job may be perfectly legal.  There are often legitimate and legal reasons for pay differences.

But if our concern is the ultimate elimination of this gender-pay inequality – rather than a litigated cure – transparency over compensation is a huge step in the right direction.