“People don’t care who they hurt or beat. For the love of money.” – Excerpt from the song “For the Love of Money” by The O’Jays
Pay inequity: It’s a topic that has been getting a lot of attention, especially over the past few years. Pay inequity is an insidious practice, one that is felt by many and knows no boundaries. Undeniably, it’s more targeted at certain people based on their gender, age, occupation, education, race, religion, and geography. There are even people in the Hollywood spotlight who have spoken out against this transgressive bias, as even these privileged few have felt the wrath of pay inequity’s duplicitous effects.
While the United States Supreme Court has laws in place to counteract the negative effects of pay inequity, it remains all too common, because these laws are not properly enforced with stringent consequences for offenders.
You’ve not come a long way, baby
From 1974 through 2014, the American Association of Women conducted a study that found female workers in the United States were garnering salaries (depending on the state) that ranged from 10 to 35 percent less than their male counterparts doing the same job with the same number of years’ experience. This same organization predicts that based on the current salary trend, it will take another 100 years for this pay gap to close. Further, according to the Organization for Economic Cooperation and Development, the United States is one of the more egregious countries when it comes to the blatant practice of pay inequity in the gender pay gap.
Pay inequity is not only a matter of gender and race bias; however, women, especially those of color, tend to be at the bottom of the pay scale. According to The New York Times, a 2016 research study uncovered the harsh reality of how businesses view work performed by women. The study found that duties completed by women are not perceived as being a value-add in the workplace. Further, some researchers suggest that society places pressure on women to pursue historically lower-paying jobs versus jobs that men have traditionally held. The conclusion here is that women succumbing to these pressures are being suppressed by a society that is not ready to view women as equals to men in the workplace and beyond.
Pay inequity does not target only women; it also affects both women and men of color. Valerie Wilson, an economist at the Economic Policy Institute, determined that the pay discrepancy between white and black households in the United States has widened since 1979. Further, the National Women’s Law Center found that the average Hispanic employee would need to work 73 years longer to collect the same pay as their white male counterparts.
National Bureau of Economic Research economists Carruthers and Wanamaker conducted an investigation to unearth wage discrepancies against black men during the 1940’s. They uncovered certain localized laws from the 20th century and earlier (practiced mostly in the southern United States) that set a precedent in which segregated, oppressed black citizens were allowed access only to public schools where very little money was endowed. This meant that adequate education was lacking to advance and support post-school employment to better-paying jobs. The sad truth is this oppression is still felt and imposed on black working Americans decades later.
A combination of factors such as age, inexperience, and gender can also play a role in pay inequity. As employers are evaluating people entering the workforce and considering their universally underdeveloped skills, instances of young females being paid less has been reported when compared to males in the same age group.
How can we solve this problem?
As a society, we need to re-examine certain perceptions and traditions. If we cannot come to a consensus, we will never move the needle forward to solve the problem of pay inequity. To begin, better and more readily available education and public awareness are key. People need to know where their money is going and how it is being spent. Many pundits offer solutions to remedy the pay inequity problem, but they need to see a follow-through on execution.
Here are three ideas:
- Cap CEO pay
- Increase taxes on the super-rich
- Penalize companies for shipping jobs abroad
Capping CEO salaries can be done, but certain considerations must first be identified: Who will provide the oversight to enforce this? How will the appropriate consequences be determined, and how will the policy be imposed? Which CEOs will fall into the capped salary structure? Publicly traded companies must disclose their financials, so they’re the obvious choice, but should other companies also be considered? And finally, when it comes to setting a limit on CEO exit plans, all too often the “golden parachute” includes a ridiculous amount of money.
Increasing taxes on the 0.00001 percent of the population who are billionaires is certainly worth a long look. As one solution, a structured plan can be imposed with proper tax levying based on capital gains within identifiable tax brackets.
Penalizing companies for sending work abroad is a good idea, but companies need to be properly incentivized to keep work here. If companies choose not to observe, then imposing penalties such as paying tariffs, along with increased income tax for business conducted here, may need to go into effect. Also, as part of keeping consumers informed, boycotting the company’s products and services may be used as a message to companies that do not comply.
These three options are just a few in a long list of other proposed solutions that have many layers of complexity to consider. With thorough consideration they can work, but a better understanding of the consequences and benefits needs to be carefully weighed first. We need a workable solution with quantifiable outcomes and accountability that incentivizes companies to do the right things, and a system in place that oversees follow-through on these policies. Conjecture is not going to get us to where we need to be. Caring, listening, talking, resolving, and taking the appropriate steps to stop pay bias is the right thing to do. Of this, I am sure.
For more strategies to address pay inequality in today’s workplace, see Five Ways To Attack The Pay Inequity Issue Head-On.Comments