March 31, 2020 | General | Posted by Bob Greene, Senior HR Industry Analyst at Ascentis
National Equal Pay Day Facts Every Employer Should Know
If you didn’t know National Equal Pay Day (NEPD) was a thing, let us get you up to speed. NEPD was established in 1996 to raise awareness of the gender pay gap — the difference between the average earnings of an American woman versus those of an American man. NEPD is observed each year as a symbolic observation of the day when the average woman’s earnings equal the average man’s earnings from the previous year, based on studies showing that women earn roughly 80-85% of the wages earned by men for the same work.
While the actual date of that parity fluctuates from year to year, the National Committee on Pay Equity designates a Tuesday in late March or early April as a rough estimate. By the committee’s estimation, a woman who started a job on January 1, 2019 would need to work until today, March 31, to make as much as her male counterparts. The choice of Tuesday is also significant, representing the day of the week when a woman’s earnings equal a man’s pay for the previous week. As the Susan B. Anthony Center notes, that’s the equivalent of about 80 hours of extra work each week for women.
While it’s obviously not a good thing that the gender pay gap has persisted for so many years, there are many indications that things have been slowly improving over time. In 1980, for instance, research showed that women made only 64% as much as men working the same jobs. That 20% improvement is definitely noteworthy, but the same studies show that the gap has remained relatively stable — and even widened slightly — over the past decade. Clearly, there is still plenty of work to be done.
Gaps upon gaps
Digging deeper into the data, the persistence of the gap makes even less sense. Women make up nearly half of the American workforce and are 5% more likely to have a four-year college degree. Even so, the gender-based pay gap is evident at all levels. Women make up more than 60% of minimum wage earners in America, while accounting for only 20% of Fortune 500 board members. The divide even cuts across family lines — within two-parent families, moms’ earnings average out at 70% of dads’.
The issue becomes even more complex when race is factored in. Latinx women currently earn only 54% of the average male worker’s salary. Native American and African-American women don’t fare much better at 57% and 62% respectively. Statistically, the disparity is smallest for Asian-American women, who make an average of 90 cents for every dollar earned by a man, but even within that sampling the numbers vary widely based on ethnicity. For all the gains that have been made in narrowing the wage gap over the decades, it’s clear that many women are still being grossly underserved.
While the roots of the wage gap are systemic and deeply rooted in social and historical issues, there are many considerations employers can take to be part of the solution.
Whether you’re making new hires, awarding promotions, or delivering performance reviews, maintaining open, honest communication with employees about how their salaries are determined and why they’re receiving their level of pay can keep both employer and employee mindful of fair and equal wages.
Set clear policies
Along the same lines of transparency, establishing and enforcing well-defined policies around equal pay goes a long way toward ensuring a harmonious and equitable workplace. Be sure your policies are consistent and well communicated to both employees and management. Beyond salaries, also take the opportunity to establish clear, fair policies regarding things like benefits, family leave, and paths to promotion.
Pay attention to your data
There are plenty of well-intentioned companies out there that believe they’re doing their part for equal pay, but the numbers don’t always add up. Regular audits and assessments of your payroll data will provide insights into whether your company is really offering equal pay for equal work. A data audit can also help you to identify important related issues such as your company’s ratio of female employees and percentage of women in management and senior positions.
In spite of many people’s best efforts over the past century, it’s obvious that gender-based wage gaps are not going to close up anytime soon. Addressing the roots of the problem will require more years of tireless effort and education. That said, individual employers have it within their power to be a big part of the solution. By educating yourself, your HR staff, and your employees on the realities of unequal pay, you can help National Equal Pay Day keep pushing its way farther up the calendar.
Bob Greene currently serves as Senior HR Industry Analyst at Ascentis. Bob’s 40 years in the human capital management industry have been spent in practitioner, consultant and vendor/partner roles. As practitioner, he managed payroll for a 5,000-person bank in New Jersey. As consultant, he spent 8 years advising customers in HRMS, and payroll and benefits system design as well as acquisition strategies. Bob also built a strategic HCM advisory practice for Xcelicor (later acquired by Deloitte Consulting.)