A lot of progress has been made to provide women with more equal opportunities in the workplace - but, there’s still a long way to go.
On average, women in the U.S. still earn less than their male colleagues. For every dollar a man makes, a woman earns just 82 cents. And that number varies by race. African American, Native American, and Hispanic women earn even less.
To raise awareness about this disparity Equal Pay Day was established. Equal Pay Day is held annually in the Spring. The date recognizes the point in the new year that women have finally earned what men did in the previous year. In 2020, Equal Pay Day falls on March 31, meaning women had to work an additional three months to achieve the same pay as men.
Long-term effects of the pay gap
The effects of the pay gap last from when a woman enters the workforce through to retirement. As a result, women are likely to earn between $700,000 and $2 million less than their male colleagues throughout their careers. But this isn’t just a women’s issue, it’s a family issue.
Over 64 percent of mothers are the sole or co-breadwinners for their families. The wage gap has a huge impact on their ability to pay for childcare and other household expenses. It also makes it more difficult to pay off student loans, purchase a home, and save for retirement.
And gender isn’t the only driver of pay inequity. Male minorities are also impacted by pay inequity, leading yet again to overall effects on the family.
Equal Pay Day participants - both men and women - are encouraged to wear red. This symbolizes how pay inequality keeps them “in the red” financially, limiting their potential for earnings growth and to advance their careers.
How employers can take action to resolve the pay gap
When U.S. Equal Pay Day was first recognized in 1996, women earned 74 cents for every dollar compared to men. While the number has increased modestly in the past 24 years, there is still a long way to go. Some estimates say the pay gap in the U.S. won’t be closed until 2058. Rather than waiting nearly four decades, businesses can take specific steps to help close the gap much sooner.
There are many reasons the pay gap exists. From unintentional biases to a lack of flexibility for women who take time off to have kids. Employers have the power to close the gap.
Not sure where to start? The National Committee on Pay Equity offers a comprehensive guide to conduct a self-audit of your wage-setting policies and determine if your practices are contributing to the pay gap.
The steps include:
- Start with recruitment: Audit your recruiting processes to ensure diverse candidates are considered.
- Evaluate compensation systems: Make sure pay is consistent among people with similar duties or experience, and that pay levels are competitive with industry rates.
- Reassess job evaluation systems: Establish criteria and assign values for various skills and responsibilities for each job. This should include reviewing data about the salaries new employees start at and how that differs among women and minorities.
- Look at opportunities for additional compensation: Between commissions, bonuses, and raises, make sure there is a consistent method for evaluating and rewarding performance, including opportunities for further training, development, and promotions.
- Implement the needed changes: By identifying areas for improvement, you can make positive changes and create and maintain a workplace with greater transparency around pay practices.
While the above actions are necessary to close the pay gap, not every company has the tools and resources to conduct the level of evaluation required. That’s why any efforts to improve fair pay should leverage a technology solution specifically designed to uncover instances of pay gaps – not just in salary but also non-monetary factors that contribute to pay inequity.
Equal Pay Day is an important marker of the pay gap, raising awareness of the disparity and its effects. But more importantly, it serves as inspiration for businesses to take action themselves and create a more transparent and fair workplace.
Want to create a more equal and inclusive workplace?
Contact us to learn how CURO can help you analyze and resolve pay gaps within your organization.