Q: Last week you wrote that the gender pay gap is less about discrimination and more about other factors –like choice of profession, working fewer hours, and taking time off to care for family and children—and that, therefore additional discrimination laws won’t solve the problem. Then what would?
A: I DO think discrimination contributes to pay inequality. But in my opinion it makes up only about 5% of the estimated 18-20% pay gap. If we want to reduce discrimination we don’t need legislation, we already have equal pay laws. What we lack is transparency, a way for working women to know how what they are paid compares to their male peers.
This is because asking about your colleagues’ salaries is frowned upon in the workplace. In fact many corporate human resources policies prohibit employees from discussing pay. So, even when women suspect they aren’t being paid equally, they don’t want to make trouble.
But most women who are underpaid aren’t even aware of it. Remember Lilly Ledbetter? She thought she was making big bucks and later found out that her male peers were making even bigger bucks (15% more) for doing the same job.
So, lack of transparency contributes to persistent pay inequality. That’s why –though I generally oppose new legislation- I do support some form of compensation openness in the workplace. Companies should not be able to prohibit employees from discussing their salaries.
Some progressive companies such as SumAll, and Namaste Solar are already experimenting with a more open pay system, not so much to prevent gender pay inequality but for benefits such as increased trust among employees and clearer understanding of individual contributions.
Will more transparency even-out the playing field for women?
Let’s look at an example where this theory is being played out: in publicly held S&P 500 companies. Their yearly financial reporting requires disclosure of top executive compensation, and a study by Nerdwallet.com found that of the 500 CEO positions, only 19 (4%) were held by women (even though women represent almost half of graduates of top business schools).
However, they surprisingly found that female CEOs actually made more than their male counterparts. Could this be attributed to transparency? I think so.
©Copyright Eva Del Rio
