Close the earnings gap for women by ensuring the state contractors are in compliance with equal pay laws
Reducing the gender pay gap by protecting employees who discuss compensation from retaliation
The Facts about Pay Equity for State Contractors
- Despite state and federal laws requiring equal pay for equal work, the pay gap remains and little progress has been made in the past 20 years. Minnesota women who work full-time and year round earn around 80% of what men earn. The pay gap is larger in rural and high wealth suburban areas of the state. Minnesota women earn less than men in all but a handful of over 200 occupations.
- The pay gap compared to white men is larger for women of color and women from immigrant and refugee communities, leading to significant lifetime loses and higher poverty rates. Compared to white men Minnesota’s Native American women earn just 66%, Asian-American women 64%, African-American women 62%, and Hispanic women just 56%. National research estimates lifetime losses for Latinas at $900,000 over a career. Minnesota’s working women of color who are mothers are also more likely to be the primary or sole breadwinner for their family.
- The pay gap continues for younger women. After controlling for degree, occupation, specialty, hours worked and other factors, research shows a 7% unexplained gap right out of college and another study shows a $16,000 gap right out of medical school.
- Although women are receiving the majority of degrees, they need them to earn as much as men with less formal education. Minnesota women (25-30 years old) with a Master’s degree who are working full-time earn $4,816 less than a comparable man with a bachelor’s degree and earn just $1,184 more per year on average more than men with AA degrees. Because of lower post-graduate salaries and the need for higher degree acquisition to earn similar salaries, young women also shoulder disproportionate levels of student loan debt.
- “Leaning In” isn’t enough. Research, such as a recent longitudinal study of MBA’s, finds that women who do all the right things do earn more and get more promotions than women who don’t, but they still fall short of similar men.
- Unconscious bias and stereotyping on the part of both men and women contributes to the pay gap. A 2012 National Academy of Sciences study involving science faculty from research-intensive universities rating randomly assigned male or female applications for a laboratory manager position found that both male and female faculty rated the male applicant as significantly more competent and hireable than the (identical) female applicant and offered a higher starting salary and more career mentoring to the male applicant.
- The “motherhood penalty is significant. Mothers earn less than childless women, holding constant a wide array of factors that affect earnings; earning 5-7% lower wages per child than childless women who are otherwise equal. A significant body of research shows that mothers are assumed to be less competent and less committed, regardless of actual performance or qualifications. Fathers are not similarly penalized. Instead they are offered significantly higher salaries than their childless counterparts.
- Research shows that periodic, systematic reviews of salary data can reduce the unintended influence of stereotypes and bias. Without these regular across the board reviews, individual women must discover and correct inequities one at a time and in the process jeopardize their relationship with their employer and their career.
The Facts about Pay Secrecy
- The gender wage gap in Minnesota remains stuck at 20% overall, but it’s twice as large (38 – 40%) for African Americans, American Indians, Latinas, those who are new to the country, and those with disabilities. The pay gap persists even among 25-30 year-old Minnesotans, and it shows up in almost all occupations, even those predominantly held by women. The gender disparity in pay is largest in rural areas and high-income suburbs, but it exists everywhere, even in our urban core.
- All too often, wage disparities go undetected because employers maintain policies that punish employees who voluntarily share salary information with their coworkers. When employees fear retaliation, there is a serious “chilling effect” on any conversations about wages. The federal law that protects some employees from such retaliation is so full of loopholes that the unfortunate practice of penalizing employees who discuss their wages has flourished, and Minnesota is not one of the six states that prohibit employers from firing employees who reveal their wages.
- As the Supreme Court has recognized, the “[f]ear of retaliation is the leading reason” why many victims of pay and other discrimination “stay silent.” Fear of retaliation only exacerbates the many hurdles employees face in gathering information that would suggest they have experienced wage discrimination. In fact, workers often learn of egregious pay discrimination only by accident.
- About half of all workers (51 percent of women and 47 percent of men) report that the discussion of wage and salary information is either discouraged or prohibited and/or could lead to punishment. Nearly two-thirds (63 percent) of single mothers say they work for employers who discourage or outright prohibit discussion of wage and salary information.
- Most Minnesota women (85%) work in the private sector where employers are more likely to try to control access to information about compensation: 62 percent of women and 60 percent of men working for private employers report that wage and salary information is secret.
- Pay transparency can help narrow the wage gap. In government, where wage information is more transparent, the gap is much smaller — 10% for Minnesota’s federal workers and virtually none for Minnesota’s state and local government workers (compared to 20% overall).
- The proposed legislation would establish a bright-line rule banning retaliation against workers who discuss their wages. This change in the law would greatly enhance employees’ ability to find out about wage disparities, making it easier for them to detect and report discrimination so it can be addressed. The protection would apply to all employees covered by the Human Rights Act (including supervisors) and to employers with 15 or more employees.