About six decades after the passage of the Civil Rights Act, women still earn less than their male counterparts.
A Pew Research Center study proved this a few years ago, revealing that women were only getting 84% of what men earned for the same work. Women must work for about extra three months to earn the same amount men make in 12 months.1
In another study, Pew Research Center found that the income of women with children decreased because they were forced to lessen their working hours due to child-rearing responsibilities.2 Analysts call this phenomenon the “motherhood penalty.” Due to social norms that demand women be mothers and homemakers, many are also forced to step out of employment and are even “sanctioned” once they get to resume their careers.
We also continue to witness this pay disparity with non-white races and ethnicities. A PayScale survey between 2017 and 2019 revealed that the average Black employee made 87 cents for every dollar a white employee earned. Hispanics earned 91 cents for every dollar earned by a white employee, and Asian men have been the most successful minority group to beat the wage gap. Data from the study revealed that they are actually making 15 cents more than their white counterparts.3
In this post, we’ll get to know more about race and gender wage gaps and why it matters to address pay equity sooner rather than later.
The Pay Gap and the Impact of the COVID-19 Pandemic
While women and minorities have long experienced disparities in pay, the pandemic made this gap even bigger. Data from the US Bureau of Labor Statistics showed that women, African Americans, and other ethnic minorities bore the economic impact of COVID-19.4
At the height of the pandemic, many women left the workforce to focus on family matters. In the years following the pandemic, the number of women in the workforce was at a 33-year low.5 Worse, as women began re-entering the workforce as the pandemic subsided, many faced the “unemployment penalty.” This refers to a cut in wages because of considerable time being unemployed.
Technology Careers and Equal Pay
Unfortunately, be it pre-pandemic, the height of the pandemic, or post-pandemic, the pay gap exists in different industries. It’s even more evident when we zoom into the STEM field.
Data from the National Center for Women & Information Technology (NCWIT) revealed that new female graduates in computer science receive an average of $79,223 in pay while their male counterparts receive $82,159, a 3.6% gap.6
A 2020 survey on Cybersecurity Professionals’ Salary, Skills, and Stress also showed that the gender pay gap exceeds $15,000 in some US states. For instance, one software firm paid male cybersecurity specialists $91,000 annually on average. In contrast, its female employees only received $62,000 annually for the same role. 6
A Pew Research study conducted in 2019 supports findings showing the gender pay gap in STEM positions. It reported that women’s average earnings in STEM roles are only 74% of men’s. While this gender pay gap in STEM narrowed from 72% in 2016, it’s still greater than the wider labor market’s pay gap at 80%.7
What is even more worrisome is that racial and ethnic pay gaps among STEM workers have increased since 2016. In 2021, full-time Black STEM employees ages 25 and above earn only $61,100, or 78% of the average earnings of White employees in STEM, which are now at $78,000 – up from 81% in 2016.
The same thing may be said about the Hispanic STEM workforce. On average, Hispanics earned $65,000, or 83% of the typical White STEM employee. The gap also widened here because, in 2016, the Hispanic-to-White pay gap in the STEM workforce stood at 85%. 7
Why Pay Equity Matters
Our list of data can go on and on about gender and racial wage gaps. However, it pays to look at the brighter side and give hope to the situation. On this Equal Pay Day 2023 (March 14), lets dive into why pay equity is important for your organization and why employers must take the lead in bridging the pay gap and promoting pay transparency and equity in the workplace.
1. Compliance with the Law
Many US states have enacted laws in support of pay equity. Pay transparency laws are now being implemented in major cities and states such as California, New York City, Colorado, Maryland, Nevada, Washington, and many more.
Under their transparency law, employers operating in these states are now compelled to show the pay range in their vacancies and promote transparency in their employees’ pay. It’s a major step in labor’s history toward promoting workplace equity. Violators of these transparency laws face hefty fines and a potential civil suit.
2. Higher Retention of Employees
There is no better opportunity for you to retain your top talent than for your employees to know that their pay is competitive and comparable to other organizations within STEM fields.
Often, employees leave organizations for higher pay and better workplace culture. Championing pay equity as your organization’s competitive advantage can greatly diminish employee turnover while improving retention rates, especially among your best employees.
3. Long-term Benefits of Diversity
Let’s face it. Many employers are wary of pay equity because they fear that, once this is tackled by top management, it can result in higher costs and expenses that would be detrimental to the organization’s long-term survival.
Yet, the opposite may actually be a more accurate scenario. Before, you may have calculated your budget based on inaccurate assumptions about tasks, projects, and responsibilities of different departments in your organization. New insights derived from your own pay equity analysis can help you allocate the budget more efficiently to roles handled by diversely creative and talented people.
Take the case of employees from the marketing analytics firm, SumAll.8 Its staff is paid based on merit, and those concerned about inequality can voice them and renegotiate. The result? This firm enjoys a high retention rate with low turnover.
4. Promotes a Positive Organizational Culture
As the red-hot tech sector desperately needs top professionals, establishing pay equity in the workplace promotes a positive organizational culture for your candidates or new hires and even your seasoned and senior employees.
Promoting pay equity establishes a culture of trust between the employer and the employees. It sends a strong signal to your employees that your firm is looking out for their welfare to the best of its ability. This can do wonders when it comes to employee engagement, productivity, and satisfaction and may also greatly enhance your firm’s reputation and overall attractiveness among candidates.
All in all, more benefits are in store once your organization fully embraces pay equity and transparency. It’s a win-win situation that employers should welcome with much optimism instead of cautious pessimism.
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1 Barroso, Amanda, and Anna Brown. “Gender Pay Gap in U.S. Held Steady in 2020.” Pew Research Center, Pew Research Center, 8 June 2022, https://www.pewresearch.org/fact-tank/2021/05/25/gender-pay-gap-facts/.
2 Parker, Kim. “Women More than Men Adjust Their Careers for Family Life.” Pew Research Center, Pew Research Center, 14 Aug. 2020, https://www.pewresearch.org/fact-tank/2015/10/01/women-more-than-men-adjust-their-careers-for-family-life/.
3 Stephen Miller, CEBS. “Black Workers Still Earn Less than Their White Counterparts.” SHRM, SHRM, 7 Aug. 2020, https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/racial-wage-gaps-persistence-poses-challenge.aspx.
4 “U.S. Labor Market Shows Improvement in 2021, but the COVID-19 Pandemic Continues to Weigh on the Economy: Monthly Labor Review.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, https://www.bls.gov/opub/mlr/2022/article/us-labor-market-shows-improvement-in-2021-but-the-covid-19-pandemic-continues-to-weigh-on-the-economy.htm.
5 “The Gender Pay Gap: An IT Issue That Must Get Fixed.” CIO, 31 Mar. 2021, https://www.cio.com/article/191531/the-gender-pay-gap-an-it-issue-that-must-get-fixed.html.
6 Stahl, Ashley. “The Pandemic and the Gender Pay Gap in 2022.” Forbes, Forbes Magazine, 24 Jan. 2022, https://www.forbes.com/sites/ashleystahl/2022/01/21/the-pandemic-and-the-gender-pay-gap-in-2022/?sh=2e604ccf347d.
7 Nadeem, Reem. “Stem Jobs See Uneven Progress in Increasing Gender, Racial and Ethnic Diversity.” Pew Research Center Science & Society, Pew Research Center, 1 Apr. 2021, https://www.pewresearch.org/science/2021/04/01/stem-jobs-see-uneven-progress-in-increasing-gender-racial-and-ethnic-diversity/.
8 Burkus, David. “Why SumAll Became a Champion for Salary Transparency.” Forbes, Forbes Magazine, 2 May 2016, https://www.forbes.com/sites/davidburkus/2016/05/02/why-sumall-became-a-champion-for-salary-transparency/?sh=5a104eb955cd.