Top 10 Reasons for the Wage Gap
1: Wage Secrecy Hurts Women
Part of the problem is that wage data are largely kept secret in America, so women and minorities can be underpaid without knowing it. Employers frequently have policies that forbid workers from discussing their salaries, even though these policies are unfair and sometimes unlawful. Yet corporate cultures continue to intimidate workers by making it taboo to discuss salary, even among trusted co-workers.
In addition, because women often don't know what a job truly pays, she can undervalue herself when negotiating a new salary (and that can label her as an underachiever). So not knowing about wage discrepancies can perpetuate them.
2: Suing is Not a Practical Remedy
Taking an employer to court under the Equal Pay Act, Title VII of the Civil Rights Act, or appropriate state laws is an option out of reach for many women. "I don't have $250 for an initial consultation with an attorney," said one woman who contacted NCPE. Because awards are severely limited in Equal Pay Act cases, there is a lack of incentive for attorneys to accept cases.
In addition, pursuing an equal pay case can wreak havoc on the personal lives and finances of the plaintiffs. Employers often fight back aggressively and ruin an employee's credibility as they seek to defend the company. Retaliation against women who file claims is common. NCPE has talked with plaintiffs who say their supervisors have turned hostile, their offices were moved to undesirable locations, that negative letters appeared in their personnel files, that their gynecological medical records were subpoenaed in an attempt to intimidate them, or that they were fired outright. This kind of treatment can last years while a case weaves its way through the legal process. Even if a woman wins her Equal Pay Act case, she may be labeled a troublemaker and have a hard time finding another job within the industry.
3: When You Take Home Less, You'll Stay Home More
Given their lower earnings, women are usually the parent who takes time off to raise small children. That means they are out of the workforce for a few years, which lowers their earnings when they return.
But not all women are taking time off - many families rely on two paychecks and cannot afford for one parent to stay home. A 1992 study by the international executive search firm Korn/Ferry found that, of women in senior management positions in Fortune 1000 industrial and 500 service companies, only a third had taken a leave of absence, and most took fewer than six months off.
Shouldn't families be able to have pay equity and children?
4: Even if They're Equal In Value, Women's Jobs Pay Less
Sometimes the jobs dominated by women in a company are not valued in the same way that men's jobs are. Studies have shown that the more women and people of color fill an occupation, the less it pays. Using a point factor job evaluation system, the state of Minnesota found that the "women's jobs" paid 20 percent less on average than male-dominated jobs, even when their jobs scored equally on the job evaluation system. (Pay equity adjustments were phased in over four years at a cost of 3.7 percent of overall payroll.)
5: Market Forces Are Not Eliminating Discrimination
Some say market forces will eliminate salary inequities, yet it has been 41 years since the Equal Pay Act was signed into law and 40 years since the Civil Rights Act was signed into law. Still, discrimination exists. If we had relied on market forces to implement fairness, we never would have needed the Civil Rights Act, the Family and Medical Leave Act, or the Americans with Disabilities Act. Market forces do not overcome bias in the workplace. Bigoted employers will pay more to work with white people, for example. Even Alan Greenspan has acknowledged that too often, companies practice discrimination, which hurts America's economy.
6: Discrimination is Intangible, But It's There
Discrimination is almost never found in the form of a smoking gun - like the Texaco tapes, for example, in which senior executives at the company were heard making racial slurs. Instead, discrimination takes a more subtle yet pervasive form. For example, in the class action sex-discrimination suit filed against Merrill Lynch, female employees complained that the accounts of retiring employees, walk-ins, and other lucrative networking opportunities were steered towards the men in the company. Another typical concern is that women are not offered career shaping assignments or spots on important committees. NCPE often hears from women who say there is an "old boys network" or glass ceiling at work. When women have trouble advancing, in a company, they can't gain the experience needed to lead.
7: Old Stereotypes Die Hard
In this day and age, women are still told they don't make as much as the men because the men have families to support. Women are not working for pin money. They are supporting America's families. As one plaintiff recounted, a manager told her, "You don't need pay equity, you're married." There are also stereotypes about what kind of work is appropriate for women, which hinder women's advancement in some fields currently dominated by men.
8: Not all Jobs are Open to Women
Over half of all women are concentrated in the broad categories of sales, clerical, and service jobs. Women can have a hard time breaking into the male-dominated jobs, as evidenced through Department of Labor audits of federal contractors. For example, in 1999, Berkline Corporation and its parent company, Lifestyle Furnishings International, agreed to pay $300,000 in back pay for refusing to hire women as woodworkers. Kohler Corporation, a national plumbing hardware manufacturer in Wisconsin, agreed to pay nearly $900,000 to 2000 women who were not hired because of their gender. When women do break into male-dominated jobs, sometimes they experience hostile work environments and find little support for their presence there.
9: Companies Fail to Address Unfair or Haphazard Pay Practices
Why won't employers address the issue on their own? Perhaps they are worried about future liability. Part of it may be psychological -- many employers don't want to believe they are discriminating or that they have tolerated discrimination. But because our socialization in America is not free from sex or race bias, it can lead to undervaluing women and minorities on the job. Employers need to put their fears aside. Private sector compensation experts can help to develop a fair pay system that is phased in quietly over time. A written pay policy will show workers that the system is based on objective criteria.
10: Current Laws Are Not Strong Enough
Put simply, current laws prohibiting wage discrimination need to be strengthened. The Equal Pay Act and Title VII of the Civil Rights Act are important laws, but they are hard to enforce, and legal cases are extremely difficult to prove and win. Because enforcement of the laws is complaint driven and most of the information needed to prove a complaint is held by employers, these laws lack the ability to completely rid America of discriminatory pay practices. In addition, the Equal Pay Act does not allow women to file class-action lawsuits, and it provides very insubstantial damages.
From: The National Committee on Pay Equity