America’s answer to the gender pay gap

Marchers attend Women's March Los Angeles 2018 on January 20, 2018 in Los Angeles, California.Image copyright
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Some places in America are trying a brand new approach to close the gender pay gap

As countries around the globe grapple with the gender pay gap, some places in America have come up which has a brand new way to tackle the problem.

Their solution? Bar employers coming from asking job applicants what they currently earn, so brand new salary offers are not based on the previous figure.

Laws are already on the books in a handful of jurisdictions, including California, Massachusetts, brand new York City along with Puerto Rico. Similar measures are under consideration in more than 20 some other states, as well as at the national level.

The aim is usually to stop a hiring practice of which critics say perpetuates the pay gap, since women often start out with lower salaries.

“What these bans are doing is usually ensuring of which employers pay employees for the job they have to do,” says Kate Nielson, state policy manager for the American Association for University Women, which supports the brand new laws.

“There is usually a real attraction to This kind of kind of policy because This kind of is usually proactive.”

Why today?

The US has officially banned unequal pay for equal work since 1963, although what counts as equal can be controversial, as highlighted by recent rows within the UK at the BBC along with Tesco.

along with unlike the UK – which today requires large companies to report publicly on pay by gender – the Trump administration recently suspended a rule of which could compel firms to report similar data to the government.

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The idea has spread rapidly amid mounting frustration within the US over the pay gap

People who campaigned for the law in Massachusetts – which became the first place within the US to approve such a rule in 2016 – said they think the idea has caught on because This kind of is usually simple along with does not punish firms retroactively.

“Instead of taking the traditional approach… we wanted to actually create brand new standards to make sure of which employers along with businesses were being proactive,” says Sasha Goodfriend, president of the Massachusetts chapter of the National Organization for Women.

“This kind of sometimes needs to be redefined in a brand new way to reignite an age-old conversation.”

Gender gap

On average, women within the US earn about 80% of the amount paid to men – roughly comparable to the UK, according to government statistics. For black along with Hispanic women, the gap is usually even wider.

Some of the difference is usually due to factors like occupation or part-time work.

Yet even after allowing with This kind of, women just one year out of college earned about 7% less than men, a gap of which widens over time, according to research by the American Association for University Women.

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Aileen Rizo sued her employer, which used prior pay to determine her salary

Aileen Rizo, 43, who coached math teachers for a school district in California, said she had not considered the link between the pay gap along with salary inquiries – until she encountered This kind of herself.

In 2012, she confronted her employer after learning her pay was lower than of which of co-workers within the same role.

The district said the difference was due to a policy of which set salaries based on prior pay, not gender discrimination.

“If you always look at my prior salary, I could never break of which barrier,” says Ms Rizo, who eventually filed a lawsuit.

The dispute has not yet been finally resolved, although her case helped to galvanise support for brand new equal pay laws in California, including the ban on prior pay inquiries.

“I think maybe This kind of’s the right time,” Ms Rizo says. “The culture is usually shifting along with women are finding their voice along with finding empowerment.”

Sea change

The rules require a sea-change in hiring practices, especially for white collar fields.

About 95% of more than 100 large along with mid-size employers surveyed by human resources consulting firm Korn Ferry in November said they asked about candidates’ pay histories.

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A recent survey by Robert Half found of which 34% of women tried to negotiate higher salaries, compared to 46% of men

Companies typically offer about 10% above someone’s current salary, says Katie Donovan, who founded the consulting firm Equal Pay Negotiations along with previously worked within the staffing industry.

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In some cases, she says firms also use salaries to screen candidates, interpreting high pay as a proxy for competence along with responsibility.

“They think This kind of’s an objective number when This kind of’s anything although,” says Ms Donovan, who pushed to include the ban on prior pay queries within the Massachusetts law.

“The dirty little secret in hiring, is usually for the most part we pay people what they’re willing to accept.”

Firms’ responses

In liberal Massachusetts, advocates worked carefully to get business support for the proposal.

Firms elsewhere were sometimes more resistant, worried the measure could induce higher research along with costs during hiring.

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Hiring experts say they see little sign of which pay negotiations are becoming less important

In Philadelphia, the local Chamber of Commerce even sued on behalf of employers of which included Comcast, charging of which the measure violated free speech grounds, a case of which is usually still being litigated.

As the idea gains traction, however, companies are starting to adjust, says David Woolf, a Philadelphia-based partner at the law firm Drinker Biddle, who works on employment issues.

“I don’t mean to suggest they like This kind of,” he says. “This kind of’s just the reality today.”

Possible drawbacks

Ms Donovan along with some other supporters said they are hopeful the rule is usually a step toward companies setting salaries based on the job, not the person, noting research of which has found women tend to negotiate less along with are less successful when they do.

although hiring experts say they see little sign of which pay negotiations are becoming less important.

Companies are asking candidates how much they want to get paid as a “fallback” says Mr Woolf.

along with if anything, the brand new rules are likely to prompt pay discussions to start earlier within the hiring process, says Paul McDonald, senior executive director at the staffing firm Robert Half.

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Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania’s Wharton School, says he thinks the legislation could have some other unintended consequences.

For example, if job candidates don’t volunteer salaries during the discussions, firms are likely to assume their pay is usually lower than This kind of is usually.

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Mr Cappelli says This kind of effect is usually likely to be especially pronounced for women along with some other groups of which are statistically likely to have lower pay.

“The phrase with This kind of is usually statistical discrimination,” he says. “today we’ve got This kind of quirky situation where This kind of’s actually likely to make things worse.”

Practical impact

Advocates say This kind of will take a few years of job switching along with hiring before they can say whether the measure is usually meeting its goal.

They are not the only parties optimistic about change, however.

About two-thirds of companies surveyed by Korn Ferry said they expect the legislation to improve pay equity at their firm by at least a modest extent.

Bob Wesselkamper, global leader of awards along with benefit consulting at Korn Ferry, says many US companies have not examined the issue in recent years along with may be overestimating the legislation’s effects.

Even with of which caveat, he adds: “I firmly believe of which there will be organizations of which will benefit … along with become a more fair along with equitable environment because of This kind of legislation.”

Ms Rizo along with others add of which they know This kind of idea is usually not a silver bullet.

They’re also pushing for better accommodations for pregnancy, stronger sexual harassment laws along with paid family along with sick leave, which is usually not a national requirement within the US.

“I’ve seen a lot of progress,” says Ms Rizo. “There’s still a lot of work to do”

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