Career Path

Why Companies Need to Take the Lead on Pay Inequity

Career columnist Liz Bentley explains why having women just ask for raises isn’t cutting it.

Unequal pay for women continues to be a popular topic, and it has gained momentum in the #MeToo era. While evidence shows women consistently get paid less than their male counterparts for equivalent jobs—and the differences grow as they move up the ranks—there still doesn’t seem to be a good fix. 

The current solution for women is to ask for a raise and/or a promotion. And while it’s very important to be able to advocate for yourself, it’s outrageous that women are put in this position to begin with. It should be the company’s—not women’s—burden to bear. While there are multiple issues here, let’s start with the problem of “asking.”

No boss ever wants to be asked for a raise or a promotion, because it’s annoying. It’s like inviting yourself to a party—it feels pushy and inappropriate. People in leadership roles would rather be “givers,” the heroes who don’t want the opportunity stolen from them. So asking puts the employee at a major disadvantage.

It seems as if everyone is working in the dark, including company leaders who don’t realize how large or pervasive the pay gap is. 

What’s a girl to do? The choices are: make less money (which leads to fewer investments, less savings, and fewer opportunities than your male colleagues) or be the asker. It’s a tough choice and a frustrating one. Not only are women being unfairly paid or not promoted in a timely manner, they also can be negatively positioned in teams and companies if they aren’t willing to just put up with inequality.

The Equal Pay Act, passed by Congress in 1963, aimed at abolishing wage disparity based on gender. It mandates “equal pay for equal work.” While the pay gap has closed over the decades, it has not closed enough. The question is, how effective can the federal agencies who enforce these laws (the Equal Employment Opportunity Commission and the Department of Labor) be when they are working up against systemic and often unidentified inequities? The implementation also gets bogged down by defining “equal work,” which companies frequently use to defend their pay practices.

At a minimum, more accountability is needed. Most companies are not required to reveal their pay structure, and even in public companies it’s often not published. Employees are also discouraged from discussing their wages. It seems as if everyone is working in the dark, including company leaders who may not realize how large or pervasive the gap is. At Salesforce, for example, the CEO was surprised to discover a $6 million pay gap for women after the head of HR asked for an audit.

Iceland is paving the way on this front. At the beginning of this year, the Equal Pay Certification law went into effect, which requires companies with 25 or more employees to obtain certification from the Centre for Gender Equality, which conducts an audit. Certification must be renewed every three years.

The question is, why are companies in the United States not auditing for salary discrepancies? Now that all organizations in New York are mandated to provide sexual harassment training to their employees, why not also do a pay audit? If all companies did this, the existence of any gender-based bias in pay would be illuminated along with work selection variance, such as why women don’t take or receive certain jobs—another big issue in the workplace.

The benefits of equal pay would have a positive impact on both families and companies. For families, women getting equal pay takes the pressure off men. Dual-income families are on the rise (55% of affluent families are dual income) and have contributed to many couples going from middle class to living in the top 10% of US households. A boost in equal pay would help with more upward mobility, particularly because dual-income families exist at all levels of society.

Additionally, women getting fair pay would make stay-at-home dads a more viable option. In the workplace, men have traditionally supported and protected each other, knowing that they have families to support. They often don’t extend the same generous thinking to women, making it riskier for women to be the sole breadwinners. There are also benefits for companies. If employees are confident in the company’s compensation structure, they would be more engaged and empowered to focus on achieving results.

Pay inequity is a serious issue that adds up to a lot of money over time. It negatively impacts individuals as well as families and communities. Enough is enough! This issue should not be placed on women to fix.

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