Wednesday is Equal Pay Day and another opportunity to try to understand why this is such a problematic issue. We have all seen the stats on the inequality of pay between men and women and how and why it happens, yet the divide is slow to close. In fact, a recent 2020 survey by the Conference Board showed that it ranked toward the bottom of CEO’s “hot button” issues, which is not very promising.
Because of the gender pay gap, over the course of a 40-year career, the average woman will lose $407,760 according to the National Women's Law Center, and that doesn’t include interest or investments that could make that gap even larger. And while we have seen positive changes in the workplace for women across the board, the equal pay realities are still grim. Not only are women being paid less for the same jobs and positions and being promoted less frequently, the jobs they traditionally have over men are not valued as much. For example, people in marketing, a position often held by women, are paid less than people in IT positions, which are more often held by men.
So, the real question is…Why do men get this incredible financial advantage for doing the exact same work as women and arguably sometimes even less productively? Many men have been known to “fail up” in their career or fall into good opportunities just because of their sex. The good news is that in the era of #Metoo and the Covid-19 pandemic, where many women need to financially support their families and children, they are more willing than ever to fight for their equality.
Getting the government involved is the fastest and most effective way to close the pay gap. Iceland is a great case study, as it is the first country in the world to make the gender pay gap illegal with a law requiring companies with 25 or more employees to prove that they pay men and women equally for equal work.
The U.S. government could get involved in several ways. The Employment Opportunity Commission could conduct random pay audits, just like the IRS does, and mandate pay audit reporting requirements for all public companies to file annually—with penalties imposed for violations. The Department Labor could get involved and conduct random audits of both private and public companies and impose requirements for pay equality and penalties for lack thereof. The government could also offer tax incentives for more women in senior management roles, especially at the C-suite level. Imagine the speed of the shift if companies got a tax break for having women who are CEOs.
Additionally, recent changes in federal and state laws have created more liability for employers who discriminate in their rates of pay between employees on the basis of sex. In this new environment, we will likely see more opportunities for women to sue for pay inequity and back wages, which can significantly add up. Several high-profile cases of senior women who have been paid less—and sometimes significantly less than their male counterparts—would start to wake many companies up to that public embarrassment. It would also get the women the pay they deserve and stop this pattern.
In addition to government intervention, we need more leadership taking action. Equality is a cultural issue that has to be influenced from the top down. Steps leaders can take right now to make a difference include:
Continuing to wake up to their unconscious bias in hiring by looking for great female candidates in addition to men along with opportunities for promotions and raises.
Keeping score by making sure leadership positions are equitably filled and if they are not, fix it.
Running pay audits, even if it’s just in your department, to make sure everyone is paid and bonused equally, or for productivity in which case a woman could make more.
Giving women high profile opportunities beyond promotions to give them more visibility in the organization.
Holding HR departments accountable to police these situations and holding leaders accountable to and actively engaging with HR.
Women can also work to bridge the gap by continuing the positive changes they’ve made in recent years, such as:
Selecting careers where they can make more money in the long run such as finance, law, medicine and sales.
Being more vocal in asking for opportunities and getting better at negotiating for salary upfront versus just taking what they get.
Advocating for each other, networking more together and giving each other business.
Most importantly, women need to continue to speak up and fight for each other and what they believe in. They need to make this their priority no matter the cost. They should ask for raises, be transparent about pay, ask others for transparency in their pay, and stand up for themselves. They are fighting for their families, their children and all of the women who will follow. As change comes and more women are in leadership positions, the problem will take care of itself as research has shown women will hire more women and improve their team’s diversity.
In order to create real and pervasive change, ultimately people and companies need to be held accountable beyond their conscious decision making. In most cases, as much as CEOs may personally care about equal pay, it will stay at the bottom of their priorities unless it’s forced to the top.
Liz Bentley is the founder and president of Liz Bentley Associates, a consulting firm specializing in leadership development programs. She is a nationally recognized keynote speaker and executive coach to top leaders and teams across a broad range of industries