Olivia Rush. Term Project: Gender Pay Gap. May 28, MANGMNT 752: Compensation & Benefits

Transcription

1 Olivia Rush Term Project: Gender Pay Gap May 28, 2015 MANGMNT 752: Compensation & Benefits

2 Introduction According to the most recent statistics from the U.S. Census Bureau, the median earnings for U.S. women working full time, year-round were just 78 percent of U.S. men s median earnings- a gap of 22 percent (Hill, 2015). A 22 percent gap between men and women s earnings is unacceptable. Changes need to be made not only in the United States, but also around the world, in terms of pay inequality. Women should have equal rights, and be paid the same compared to men. Women and determined companies around the world will continue to make changes to end the pay gap. It will take time, but I am confident that the pay gap will continue to go down. Although the gender pay gap has seen significant improvements throughout the past decades, there is still a need to completely close the gap, and to provide women with the equality they deserve! Throughout this research study, one will learn more about the pay gap specifically within the United States, in addition to recommendations to improve pay inequality, useful to all business people around the world. Background The main issue presented in this research study, is that pay inequality is still a concern that needs to be resolved. Organizations and their employees need to be more involved in monitoring wages, and assuring that the pay is equal among men and women. Processes and ideas to end pay inequality need to be implemented in all organizations, and people and organizations need to continue to work on discovering new ways to continue working on resolving the pay gap. Until pay is equal, this will continue being a concern to both women, and organizations. First, I would like to mention an association that is very crucial to pay equality and fighting for the rights of women. The American Association of University Women (AAUW) has 2

3 been fighting for pay equity since 1913, and continues to fight for the rights of women to this day (Hill, 2015). Although AAUW focuses on pay equity, they also focus on other issues in relation to women, and have been in practice since 1881 (Hill, 2015). Their mission is Advancing equity for women and girls through advocacy, education, philanthropy, and research (Hill, 2015). Several research studies conducted by the AAUW will be mentioned throughout the report, and will help others truly understand the challenges women are facing, and why the AAUW is so crucial in the fight for pay equity! According to a report written by Catherine Hill, the Vice President of Research at the American Association of University Women (AAUW), the pay gap has barely changed in the past decade, causing for frustration among many women in the United States (Hill, 2015). This provides even more proof that bigger changes are needed across organizations, so that changes are being made, and become more noticeable. Also, it is important to note there are variances in percentages in terms of the pay gap; however, the percentages seem to be similar. Additionally, the pay gap varies among states, with Washington D.C. leading the pack in terms of pay equality (Hill, 2015). Women made 91 percent compared to men in 2013 in Washington D. C., whereas in Louisiana, women only made 66 percent of what men were paid (Hill, 2015). For reference, Wisconsin women made 79 percent compared to men in 2013 (Hill, 2015). Also, women of color face even more barriers in terms of the pay gap (when compared with white men), with Asians making 90 percent compared to white men, whereas Hispanic women are only making 54 percent (Hill, 2015). It is very unfortunate that in the 21 st century, women of color are still being treated unfairly, and it is outrageous that Hispanic women are making significantly lower wages compared with other women, and men (Hill, 2015). Also, it is important to note that the pay gap grows with age (Hill, 2015). Women typically earn about 90 3

4 percent of what men are paid until they hit 35. After that median earnings for women are typically percent of what men are paid (Hill, 2015). Once again, this is very unfortunate, and proves that something needs to be done immediately, to end the unnecessary gap in pay! Furthermore, females are paid considerably less in almost every occupation. According to the Bureau of Labor Statistics, as of 2012, the following occupations have the largest gender pay gaps: Insurance Sales Agents (62.5%), Retail Salespersons (64.3%), Sales and Related Workers, All Other (65.6%), Real Estate Brokers and Sales Agents (66%), Personal Finance Advisers (66.3%), Education Administrators (67.2%), General and Operations Managers (67.6%), Physicians and Surgeons (67.6%), Marketing and Sales Managers (67.7%), Securities, Commodities, and Financial Services Sales Agents (69.1%) (Bureau of Labor Statistics, 2013, p. 5). On the other hand, occupations where pay is equal or very close to equal between men and women include buyers for wholesale and retail firms, and people in the bookkeeping, accounting, and auditing field (Bureau of Labor Statistics, 2013, p. 5-6). The only position found in the salary research study where women are making more than men, is in the respiratory therapy field, where women are paid percent of what a male is paid (Bureau of Labor Statistics, 2013, p. 6). This is most likely because more females seek to become respiratory therapists than males in this case. In relation to occupations held by women, the Bureau of National Affairs published an item in a Report on Salary Surveys in 2012, which made note of the fact that a major reason the pay gap still exists, is because there is a greater concentration of women working within particular industries, that tend to pay less (Bureau of National Affairs, 2012, p. 6). The institute for Women s Policy Research compiled data from the Bureau of Labor Statistics and found that 41.1 percent of women work in traditionally female occupations, such as nurses, secretaries, 4

5 cashiers, and teachers (Bureau of National Affairs, 2012, p. 6). Women need to be exposed to different occupations, and begin to further expand into all types of occupations, specifically those dominated by males. Additionally, it is important to note the Lilly Ledbetter Fair Pay Act, signed into law by President Barack Obama, on January 29, 2009 (2011). The act was an amendment to the Civil Rights Act of 1964, and it allows women to more effectively challenge their employers if they are being paid less than other male employees doing the same job. Unfair pay complaints can be filed within 180 days of a discriminatory paycheck- and that 180 days resets after each paycheck is issued (Slack, 2012). Before the Lilly Ledbetter Act was put into place, women had to file a complaint within 180 days of an employer s decision to pay a worker less- even if the worker didn t learn about the unfair pay until much later (Slack, 2012). Although the amendment provides more leeway for women, according to a survey by Bloomberg BNA, only 7 percent of HR professionals say their company has ever been affected by the Lilly Ledbetter Act (Bureau of National Affairs, 2012, p. 3). The act has now been in place for 6 years, and it is very disappointing that it didn t make more of an impact in terms of pay equality. Furthermore, a question was asked to HR professionals, on whether additional laws are necessary in reducing the pay gap. The majority stated no, with 40% stating they are not sure, and 15% stating yes (Bureau of National Affairs, 2012, p. 5). This leads me to believe that additional enforcement needs to be made in terms of the current laws, or that something else needs to be done. HR professionals do not know the true answer to resolving pay inequality, however, many are still in search of an answer. The AAUW did make note of an act that may assist in reducing pay inequality, and suggested the Paycheck Fairness Act (Hill, 2015). This act would improve the Equal Pay Act 5

6 ( requires employers to give men and women employees equal pay for equal work ), and include stronger incentives for employers to follow the law, enhance federal enforcement efforts, and prohibit retaliation against workers asking about wage practices (Hill, 2015). This act would allow for one more item that could become the answer to pay inequality. Without implementing and making this act a reality, no one will ever know if this is the answer, and the type of law needed to truly make a change. Another act AAUW supports being passed, is the Fair Pay Act to require employers to provide equal pay for work of equal value (Hill, 2015). Equal pay would be required by law to be given to all employees with comparable positions, examples would include jobs requiring comparable education, skills, responsibilities, and working conditions (Hill, 2015). Passing this bill will be another step forward in ending pay inequality! Furthermore, another item that must be addressed is in terms of parenting. It is still more common for women to take time off of work, or switch to working part time, compared to men. An article titled, Behind the Pay Gap, found that 10 years after graduation, 23 percent of mothers were out of the workforce, and 17 percent worked part time. Among fathers, only 1 percent were out of the workforce, and only 2 percent worked part time (Hill, 2015). The difference between the statistics amid men and women in terms of parenting, leads to the obvious fact that women will continue to have some sort of a pay gap, due to their parenting decisions and personal life choices. If women decide to come back into the workforce, and work full time, they do tend to receive a lower salary, than women who stayed in their careers with children, or those who did not have any children at all (Hill, 2015). Additionally, women tend to take more time off of work after child birth, which negatively affects the way they are viewed in the office at times, affecting their pay, and total pay made within a birthing year. It is unfortunate women are penalized for having children in terms of pay, although many will not admit it. 6

7 Lastly, a big reason why women are not being paid the same as men is because they have not completely broken through the glass barrier. It is still common for upper level management to be comprised of men. There is a clear change being made, as more and more women are becoming CEO s of companies and leading boards, however, we still are not there. As more and more women are given the opportunity to take part in more upper level management positions, I foresee the pay gap getting smaller and smaller. Women continue to fight for upper level positions, and will not stop until things are equal! Recommendations I have come across several ideas in my research on pay gaps, in terms of recommendations to help reduce and close the pay gap among men and women. The following recommendations are some suggestions I foresee helping reduce the pay gap according to my research. First of all, companies need to conduct salary audits annually, to guarantee that there is no discrimination made to employees in regards to pay. It is important to make sure employees are being paid what they deserve in terms of multiple factors, such as skill level, knowledge, position, etc. Many companies tend to hire third party consultants to analyze the salaries, and how they are being formulated. This is to guarantee that items in terms of a potential pay gap are not being overlooked and that pay and benefits provided to the employees are bias-free. Not only should companies have salary audits performed by third party consultants, but also organizations should set aside time to discuss and defend the distribution of employees raises in a peer group setting (Ashton, 2014, p. 3). This was a suggestion that Deborah Ashton presented, the Vice President & Chief Diversity Officer for Novant Health, along with several other useful recommendations that worked at Novant to help fix the gender pay gap. Also, Deborah made it clear that in addition to the peer meetings, every organization needs to note 7

8 who is responsible for equitable pay, as a way to guarantee employee pay equality is being monitored on a regular basis (Ashton, 2014, p. 4). Second, organizations and associations should provide salary negotiation courses to women around the United States. According to my research, women do not negotiate salaries as much as men, as they are not as comfortable with it. By providing training and encouraging women to negotiate their salaries more in the workplace, it will help close the gap, and women will end up negotiating as much as men. Also, organizations like AAUW should encourage women to major in fields with higher pay, such as engineering and computer science, which are male dominated at this time. Currently, UW Whitewater is doing a great job in encouraging young females to get excited about information technology and all it has to offer. An example is a summer camp offered, named CyberGirlz and CyberHigh, designed for middle and high school-age girls to explore more of what the IT world has to offer. St. Ambrose University, where I did my undergrad held an excellent engineering program for young students as well, named Race Into Engineering. This is a program designed for middle school aged students to learn how to go about designing a miniature car that the students get to race at the end of the camp. The camps are increasing the knowledge in fields such as IT and engineering, which tend to be overlooked, especially by females. Additionally, organizations need to understand the role they play in closing the pay gap. Organizations do play a key role in making a change in terms of pay equality, and women alone cannot close the gap. Organizations need to be educated on the current state of pay inequality and the effects it is having on organizations and its workforce in general. Organizations such as the AAUW and diversity & inclusion department s around the United States need to find a way to create an educational training program, that provides the knowledge organizations need to 8

9 thrive, and close the pay gap in America. Recommendations should be given to organizations to assist them in the process as well. Once more organizations and employees are educated on the issue, people will become more conscious of the compensation given to all. It needs to be clear that further change cannot be made until organizations and women work together! Furthermore, both private and public companies should be required to publicly share the wages employees make along with justifications. A survey by the Institute for Women s Policy Research (IWPR) found that about half of employees said they worked in a setting where discussions of wages and salaries are either formally prohibited or discouraged by managers (Hill, 2015). This is an unfortunate fact, and I am confident that it would make a difference if more employees were given the open right to discuss their wages both at work, and out of work. Private sectors are stricter in terms of pay secrecy, with 61 percent of employees whom are discouraged or prohibited from discussing wage or salary information (Hill, 2015). The public sector is more open to discussing pay, with only 14 percent of employees reporting that pay discussions were either discouraged or prohibited (Hill, 2015). This would allow others to analyze the pay, and make sure pay is equal among men and women. Also, by being free to discuss wages in work settings, this will allow for both men and women to guarantee they are being paid fair. It would also allow for the opportunity to prove that you should be paid more based on what you know if you thought your pay was unfair. This would be a huge step in the right direction to end pay inequality. Moreover, a recommendation related to women struggling to break the glass ceiling, would be for organizations to incorporate programs to help place women in management and higher-level positions. The program would allow for women to have a place to go and help develop a solid career plan. Also, the program could assist women in finding positions within 9

10 the company to assist them in reaching their goals. Additionally, companies should be given fines if they have violated women s rights for equal pay in the workplace. The government would have to have solid proof that pay discrimination was occurring at an organization. Once it is determined the company is at fault, a fine would be required to continue operations in place. This would definitely lead even more companies to care about pay equality. Lastly, a crucial item businesses must implement is effective communication throughout the organization in terms of compensation and benefits provided to the employees. A lack of communication may lead to pay inequality, and salary and pay decisions being made in a poor way. Managers and supervisors need to be aware of existing laws, and also the criteria by which they should be determining raises and bonuses (Bureau of National Affairs, 2012, p. 3). Effective communication should be practiced not only in the compensation and benefits department, but also throughout the entire organization. If things are not communicated effectively, or if items are lacking clarity, that is when issues will arise, and may be one of the many potential reasons for pay inequality. Opinion After reviewing several articles on the issue of pay inequality, it has become clear that there are still many problems that need to be resolved in order for pay to be equal for all! Women should be receiving the same pay as men, as it is simply not fair for all of the hard working business women. As a woman, I am very opinionated on this topic, and care about the rights of women without question. We deserve what men already have! In all honesty, it will most likely take years to see a more equal playing field in terms of pay, in addition to other barriers women face, such as attaining management positions. 10

11 The gender wage gap will affect me in my future career in human resources without a doubt. In my future I hope to make a change in the corporation I work for to avoid a gap in pay between men and women, and to make sure women are equally represented in upper level management positions. During my time actively working in the human resource field, I hope to see statistics that prove that women have officially broken through the glass, and are paid equally! As long as women stay empowered to fight for their goals, and their place in the workplace, I don t see any reason why women will not find complete equality in the coming years. In my future career, I will work towards my goal of making sure women are being paid equal to men, and I will do everything I can to make it a reality! Conclusion In conclusion, according to the Bureau of Labor Statistics and Catherine Hill (2013), if the current pace of change continues at the same rate as it has over the past 50 years, it will be 2057 before the gap is finally closed (p. 5). It is unacceptable for organizations, employees, managers, women, and the government to allow for the gap to not be closed until This is unacceptable, and a major change needs to be made to close the gap, whether new laws are put into place, or organizations step up their game. Next year, please be sure to make note of Equal Pay Day, typically found to be in April of each year (determined each year late in the third quarter), which represents how far into the year women must work to earn what men earned in the previous year (Bureau of National Affairs, 2012, p. 1). By making sure companies, employees, and the public are aware of the problem, women will be one step closer to the pay gap being closed, leading to a future of total equality! Please take advantage of the many recommendations, and share the statistics provided in the research study, to make others aware of 11

12 pay inequality, and the need to make a firm change! Join your local AAUW chapter, share your thoughts with others on social media, and lead a change for women in your community. 12

13 Work Cited Ashton, D. (2014, December 2). What HR Can Do to Fix the Gender Pay Gap. Retrieved March 6, 2015, from Harvard Business Review. Bureau of Labor Statistics (2013). Gender Pay Gap Widened in 2012, Except for Tech Pros (2013). Report on Salary Surveys, 20(4), 5-6. Retrieved April 25, 2015, from Business Source Complete. Bureau of National Affairs (2012). Are Gender Based Pay Gaps A Thing of the Past? (2012). Report on Salary Surveys, 19 (4), 1-5. Retrieved April 25, 2015, from Business Source Complete. Bureau of National Affairs (2012). Study Counters Usual Explanations for Pay Gaps (2012). Report on Salary Surveys, 19 (4), 6-9. Retrieved April 25, 2015, from Business Source Complete. Hill, C. (2015, February 3). The Simple Truth about the Gender Pay Gap (Spring 2015). Retrieved April 25, 2015, from Leeds, E. M., & Leeds, M. A. (2015). Cracking the glass ceiling (Jan/Feb 2015). Ivey Business Journal Online, 1. Retrieved April 28, 2015, from ABI/INFORM Complete. Kasturi and Sons Ltd. (2015). Pay equality for women may take over 70 years, says ILO. (2015, March 8). Businessline. Retrieved from ABI/INFORM Complete. Slack, M. (2012, January 30). From the Archives: President Obama Signs the Lilly Ledbetter Fair Pay Act. Retrieved April 28, 2015, from 30/archives-president-obama-signs-lilly-ledbetter-fair-pay-act 13

14 The Lilly Ledbetter Fair Pay Act. (2011, January 1). Retrieved April 28, 2015, from 14