At the 2013 Colloquium on Global Diversity, convened by the Global Summit of Women and the World Bank Group, lively and illuminating discussions focused on the gender pay gap, an issue that plagues women worldwide. Because no country has solved this exasperating problem, we sought approaches that would move us closer to its resolution.
The pay gap has narrowed over the past 50 years in the United States and in other countries as well but it is far from closed. According to the most recent data, women were paid 77 percent as much as men in 2011, a pay deficit of 23 cents for every dollar earned by men. Assuming that the pay gap continues to close at the same rate as it has from 1961 through 2011, we will not reach parity until 2057.
But even this estimate is optimistic: the pace of change has actually slowed in the most recent decade. Between 2001 and 2011, the gender pay gap narrowed by a single percentage point! At that rate, we and our daughters and our granddaughters will be long dead before the goal is reached.
A systemic and entrenched problem like this will require solutions across many fronts. With such an intractable issue, it may seem that there is nothing that any one person can do. Yet there are three steps women entrepreneurs and business leaders can take to improve the rate of change:
1. Put the topic on the agenda. Talk about gender pay equity with your board, with the people in your organization responsible for setting pay policies and rates, and with your employees. Make it as integral a part of the conversation as mission or marketing.
2. Call it a problem. The fact that right now, well into the 21st century, women are paid less than men is absolutely not right. And the fact that the recent rate of closure won’t solve the problem for 200 more years is even worse. This is utterly wrong. That message needs to be delivered regularly and unequivocally.
3. Make compensation transparent. This doesn’t mean that everyone has to know what everyone else is being paid. It does mean that every employee should know how wages are set, how promotions are made, and how the parameters of wages within job categories are established and challenged. If people are paid fairly and equitably, what’s the argument for keeping pay a secret? And if people aren’t being paid fairly and equitably, they should know about it and be given the tools to correct it.
All these suggestions require boldness, particularly transparency. It’s relatively easy to get people to talk about compensation equity. It’s even easier to say that gender pay inequity isn’t right. But becoming transparent isn’t easy because it takes for granted that pay philosophies are clearly defined, that pay practices accurately reflect those philosophies, and that individual pay determinations are fact based, fair, and explainable. If they are, then being transparent about compensation is no more fraught than transparency about sick leave or vacation benefits. But if they aren’t, insisting on transparency is a way to move closer to gender pay equity because that policy would treat employees as adults who deserve to know how to improve their earnings.
This article was originally published in the latest issue of Enterprising Women Magazine and was co-authored with Linda Hallman. Linda is a nationally recognized leader with more than 20 years of executive experience, is executive director and CEO of the American Association of University Women. AAUW’s $tart $mart program trains young women to negotiate their first salaries, working to close the wage gap one paycheck at a time. Linda can be reached at 202-785-7800 or via [email protected]