Taking On the Gender Pay Gap

Equal Pay, Sex Discrimination

Earlier, we discussed the gender pay gap and its prevalence in the United States, even in the entertainment industry. We also mentioned a few attempts to reduce the compensation discrepancy, such as salary transparency. This was successfully used by Charlize Theron to receive equal pay with Chris Hemsworth in the soon-to-be-released movie, The Huntsman.

However, you may be thinking that you don’t have the benefit of having hacked salary information, and even if you did, your employer might prohibit you or anyone else from sharing that information. Or perhaps you worry that you may be perceived as “overcompensating” when negotiating equal pay.

This article will address those two thoughts by reviewing two approaches to reducing or eliminating the gender pay gap: banning salary negotiations and protecting salary transparency.

No More Salary Negotiation

negotiationIt sounds counterintuitive, especially in light of Charlize Theron’s success in negotiating a salary equal to her co-star Chris Hemsworth, but some are advocating that one way to eliminate the gender pay gap is to prohibit salary negotiations from taking place. Why? According to Laura Kray’s Washington Post article titled, “The Best Way to Eliminate the Gender Pay Gap? Ban Salary Negotiations,” research has shown that women are at a disadvantage when negotiating salary.

In her article, Kray discusses how the CEO of Reddit (Ellen Pao—perhaps you’ve heard of her unsuccessful sex discrimination lawsuit) recently implemented a policy banning salary negotiations. The reason for this new policy is because women can’t negotiate as successfully as men. But why can’t women negotiate as well as men? The answer is a catch-22 situation.

Some believe women simply aren’t as good negotiators as men. Therefore, one way to reduce the gender pay gap is to train women to negotiate better. This usually involves negotiating “more like a man”: that is, exuding rationality, self-confidence, and assertiveness. But that won’t work for women. Research indicates that women who negotiate like men are perceived negatively. This perception applies to both male and female individuals who are negotiating with a female subject. This creates the catch-22: get better pay by negotiating in a more masculine way, except both men and women will react negatively to a woman who negotiates like a man.

According to research cited in Kray’s article:

  • People do not react as favorably to a woman who asks for more money compared to a man who asks for more money.
  • Women who “sell themselves” or otherwise do not act with “feminine modesty” in job interviews are less likely to be hired.
  • Women can increase their negotiating success with men through flirtation, rather than assertiveness, rationality, and self-confidence.

But what’s to keep employers from lowballing female employees at the salary negotiating table? According to Kray, salary transparency will prevent that. Before a woman is hired, she can find out what her future employer pays its employees. Because her future employers know she has this information, they will not lowball her.

Some organizations such as Whole Foods, Buffer, and the University of Michigan have started revealing the salaries of all their employees. However, other organizations prohibit salaries from being revealed and/or discussed among employees; state and federal governments are actively trying to stop these prohibitions.

Allowing the Sharing of Salary Information

shhUnless the employer makes compensation information available, basically the only way an employee can learn what others are making is through office gossip. However, most employers don’t allow this.

According to the Institute for Women’s Policy Research’s Quick Figures publication titled “Pay Secrecy and Wage Discrimination,” 51% of women and 47% of men reported that the discussion of compensation information was either discouraged, prohibited, and/or could lead to punishment. The federal government has made several attempts to prevent this, although with only partial success.

The Paycheck Fairness Act is a bill that has been introduced into Congress but has failed to pass both the House of Representatives and the Senate. One of its provisions is to keep employers from forcing employees not to talk about their pay.

President Obama has issued an Executive Order compelling all federal contractors from enforcing compensation secrecy policies. And most recently, the National Labor Relations Board ruled that T-Mobile’s policy restricting employees from discussing their compensation with each other was against the law.

At the state level, there are multiple attempts to protect employees from employer policies and retaliation when discussing salaries. California, Oregon, Connecticut, and Washington State have introduced bills into their respective legislatures that would, among other things, protect employees from being retaliated against for asking or discussing compensation information with fellow co-workers.

Whether these states successfully pass these bills and make them law is still up in the air, but changes seem to be coming soon.

As discussed in the first section, whether women can effectively use the salary information to negotiate equal or fair pay is debatable. However, until a woman knows she’s making less, it will be impossible for her to do anything about it. Just ask Charlize Theron and Lilly Ledbetter (Ledbetter only found out that she was making less than her male colleagues after being given an anonymous note, because her employer had a policy preventing employees from discussing their pay).

Summing It Up

  • One method of tackling the gender pay gap is by banning salary negotiations altogether. This is because women are at a disadvantage in salary negotiations due to a catch-22: to more effectively negotiate, they must act rational, assertive, and self-confident. However, women who act this way face a backlash at this “more masculine” approach to negotiating.
  • Another method of reducing the gender pay gap is to allow salary transparency. Some organizations have already allowed their employees to see each other’s compensation while the federal and some state governments have introduced laws that restrict an employer’s ability to retaliate against employees for revealing and/or discussing their compensation.