The Gender Pay Gap

 The Gender Pay Gap


By Nancy Schreiber, Ph.D.

Apple. Facebook. IBM. Target. Visa.

All five of these companies, which routinely make “Major Employers” lists across Texas, signed the White House’s Equal Pay Pledge this summer. In fact, many of the 57 American corporations that signed the pledge have a significant presence in Texas, and they have all committed to helping close the national gender pay gap by analyzing their salary data, reviewing the way they hire and promote, and implementing best practices to establish equal footing.

Why make such a bold public commitment? Because it’s the right thing to do, and it’s good for business. To quote Gap’s statement upon signing the pledge: “Pay equality […] is the way the world should work and it’s time to get it done.”

Closing the Wage Gap: An Economic Opportunity

The Equal Pay Pledge — which comes 94 years after women earned the right to vote and 53 years after federal legislation first guaranteed them equal pay — promises to catalyze a deeper assessment of American corporate culture. Yet even as the #EqualPayPledge hashtag makes the social media rounds, the latest Department of Labor statistics indicate that American women working full time earn just 79 cents for every dollar their male counterparts make. And the gap widens when we factor in race: African American women in Texas make 59 cents on the man’s dollar and, for Latinas, it’s just 44 cents.

These disparities add up to $37 billion in lost earnings each year for Texas women who are employed full time, according to the National Partnership for Women and Families. With equal wages, women in Texas could buy groceries for 80 additional weeks and pay their mortgages and utilities for an extra seven months. They could spend more on goods and services, and they could invest and save more. In fact, if Texas businesses addressed the wage gap and other issues that impact gender parity, according to a new report from the McKinsey Global Institute, the state could increase its GDP by 9 percent.

Why Equal Pay is Good for Business

Texas is not alone — the NPWF and National Women’s law center report all 50 states have a wage gap. If every state closed that gap, the U.S. economy could grow by as much as four percentage points. As the Equal Pay Pledge demonstrates, major corporations are acknowledging the problem and the inherent opportunities that come with solving it. Perhaps Cisco says it best: “Pay parity helps us build the trusting environment that drives the best teams, allows us to retain the best talent and positions us as a top employer.”

Big businesses are finally getting it. And they are talking about it publicly.

That’s good news for Texas business leaders who realize denial is no longer a workable strategy. A public commitment to equal pay can position Texas companies as employers of choice, skyrocket employee satisfaction and attract new talent into the state. It can also bring Texas business leaders into the national discussion about ending pay inequity based on gender. More than half a century after JFK signed the Equal Pay Act, isn’t it about time? Here’s how to get started.

Five Steps to Closing a Company’s Wage Gap

  1. Assemble a Team

Start by talking to the board and counsel. Discuss why it’s imperative to close the wage gap, emphasizing the competitive advantage of gender parity. Then, develop a task force of representatives from every major working group, led by the head of Human Resources. Consider what Facebook calls “cognitive diversity” and Cisco calls “a holistic approach” — seek out perspectives that represent not only gender, but also background, beliefs, ethnicity, race and culture. The key is to ensure the task force is a diverse reflection of the company’s workforce.

  1. Collect Data

Charge the task force with conducting an internal audit. Start with compensation structures, but take it further. Follow Apple’s example and examine bonuses and stock grants alongside salaries. Gather data according to gender and ethnicity across all job categories and levels, as Intel does every year. Also consider the company’s system for hiring, promoting and developing employees. What data is there on employee recruitment, retention and engagement? What can exit interviews reveal? What kind of bias training does the company offer (and how effective is it)? Make the audit as comprehensive as possible.

  1. Analyze the Data and Make Changes

For guidance in interpreting the data, look at the analyses other companies have completed, like Glassdoor’s publicly available review of 600 employee salaries. Consider hiring independent experts, as Anheuser-Busch has done, or fostering partnerships with organizations that have similar goals, a strategy Airbnb and Spotify have both adopted.

However the task force approaches the analysis, the numbers will likely reveal patterns that need to be addressed. The key, as Pinterest says, is to treat the findings like any other business problem. Focus on the lessons learned and opportunities for improvement. Set measurable goals and hold each other accountable.

  1. Communicate, Communicate, Communicate

Be proactive. Create a communication plan that acknowledges the national wage gap and emphasizes the company’s commitment to helping abolish it. Emphasize relevant recognition, like inclusion in DiversityInc’s Top 50 Companies for Diversity or certification by Economic Dividends for Gender Equality (EDGE). Tout what the company already does well, like Buffer’s salary transparency or Patagonia’s family leave policies. Use annual reports and other channels of communication to share equal-pay objectives and the strategies the company is implementing to reach them.

Step 5: Repeat

Remind the board and leadership team that closing the wage gap and achieving gender equity is a long-term, ongoing process. Every company that is part of the Equal Pay Pledge commits to an annual pay analysis — something IBM has been doing for 40 years. So give these new initiatives and processes time to work. Then, reassess. Follow national and state-wide shifts and track the company’s relative progress.

Continue to communicate the company’s objectives and successes, and help Texas achieve that estimated 9 percent GDP growth that gender equality will bring.

Nancy Schreiber, Ph.D. is dean of The Bill Munday School of Business at St. Edward’s University in Austin.


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