Many countries have laws that say women and men must be paid equally for equal work. But enforcing such laws seems to be easier in theory than in practice.
Globally, women still earn on average just 80% of what men earn. In the United States, women overall earn on average 83% of what men earn — a major jump from just 62% in 1979. But when examined further by race, Hispanic women earn just 57% of what white men earn. In the U.K., women overall earn about 88% of what men earn, but for Black women that average is 74%.
Pay discrimination can also happen based on sexual orientation or gender identity. The Human Rights Commission estimates that LGBTQ people in the U.S. earn about 10% less than average. In the U.K., that gap is estimated at 16%.
Even in Iceland, where a 2017 law made it illegal to discriminate based on gender, ethnicity, sexuality or nationality, the gender wage gap persists: Women earned on average 10.2% less than men in 2021.
One of the best ways to improve pay equality is to simply talk about pay more. Discussing pay is speech protected by law for workers in the United States, United Kingdom, South Africa and Iceland, and is permitted in many other countries. In some U.S. states, employers cannot ask candidates their past salary history in interviews or base a candidate’s compensation on their wage history.
In the name of Diversity, Equity and Inclusion (DEI), many companies have started making their pay scales more transparent. Now, an increasing number of U.S. jurisdictions are starting to require pay disclosure in job ads. For example, a revised state law requires companies in California with 15 or more employees to include the pay scale for any job posting starting January 1, 2023.
Pay transparency solutions, the OECD explains, encourages employers to prevent and address pay inequity, gives workers more information to combat pay discrimination, and helps governments target gender wage gaps.
Gathering and auditing data to make comparisons controlled for various factors — such as level of education, years of experience, location, age, etc. — is a huge task. Judging whether a person as an individual is being underpaid is also difficult. In Chile and Germany, companies are required to share pay information upon request for five or six employees in comparable positions.
Rectifying pay inequity shouldn’t be just a matter of compliance — it’s about doing what’s right for your people. The World Economic Forum’s 2022 Gender Gap Report says, at the current rate of growth and with pandemic setbacks, it will take another 134 years to achieve pay equality between men and women. It’s our jobs as leaders to see how we can make that happen more quickly.
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