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In 25 Years, the Pay Gap Has Shrunk by Just 8 Cents

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Did Covid make it worse?

In a year of devastating job loss, especially for women — hence the talk of a “she-cession” — the Institute for Women’s Policy Research released a piece of research that seemed, on its face, like good news. In 2020, it found the weekly gender wage gap for full-time workers shrunk to 17.7 percent from 18.5 percent. Seems positive, right? Not so fast.

As Ms. Goldin of Harvard explained, if the female labor force is reduced, but most of those reductions are from the bottom part of distribution (restaurant servers and retail workers, for instance), then women’s wages relative to men’s will rise.

This manifests as an overall rise in women’s wages. And that’s what happened here.

But underneath the top-line number, Dr. Mason pointed out, many, many lower-paid female workers are struggling.

What should companies do about it?

Closing the wage gap demands an investment of time and resources.

First, companies can audit workers’ pay and collect data to determine the levels of disparity between their male and female workers, said Serena Fong, a vice president at Catalyst. Salesforce, for example, committed to reviewing all its workers’ salaries in 2015, and over the following years spent more than $9 million on adjustments to give women equal pay.

Salary bands, which give the range of pay for a given role, can also help level the playing field between male and female workers in salary negotiations. (Though broadly speaking, a wide salary band can provide “too much range to pay people unequally,” Dr. Mason said.)

And governments?

The Equal Pay Act, passed nearly 60 years ago, made it illegal to discriminate by sex in setting wages. But in practice, it can be hard for women to know whether they’re actually being paid equally. It’s not common to ask your colleagues what they make while you’re chatting by the water cooler.

In the last decade, more than a dozen states and the District of Columbia have adopted legislation prohibiting pay secrecy in the workplace. Still, a 2017-18 survey found that nearly half of full-time workers were discouraged or prohibited from talking about their pay, meaning more legislation and enforcement is needed.

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