Magazine

Why Workplace Equality is a Better Goal Than Equal Pay

By Ellevest Team

We will not tolerate gender pay gaps — or pay gaps based on ethnicity, race or orientation — in our companies. - Let’s Disrupt Money

You may have seen the headlines: “Starbucks Announces 100% Pay Equity.” “American Express Declares Gender Pay Parity.” Those are just a couple of the companies recently announcing they’ve achieved “pay equity,” and “gender pay parity.”

Sounds great … but meanwhile, the call for “gender parity” at the workplace continues. What do all these terms mean — and what do they all have to do with actual equality?

Pay equity = equal pay for equal work.

“Pay equity,” aka “pay parity,” is the achievement most of these companies are announcing triumphantly. As eBay put it, when they looked at “salary, bonus and annual stock,” women make “the same the total compensation that men make in the same job and at the same grade level.”

In other words, equal pay for equal work.

(Wait, isn’t unequal pay illegal?)

Well … kind of. The federal Equal Pay Act of 1963 does make it illegal to pay a man more than a woman (or vice versa). But — and this is a BIG but — it allows differences in pay if they’re based on “seniority, merit, quantity or quality of production, or ‘any factor other than sex’” — which many people think is way too broad.

A proposed Paycheck Fairness Act could fill those holes by punishing employers who retaliate when workers share salary info, putting the burden on employers to justify when someone is paid less, and allowing workers to sue for punitive damages when wage discrimination is proved. But — another big but — it’s been introduced to Congress 11 times so far, and still isn’t law.

Meanwhile, a bunch of states and cities have additional equal pay laws, but they’re variously worded and enforced. (The American Association of University Women, which researches the pay gap, only rates 10 states as having strong protections.)

In other words ... yeah. We have a long way to go on the pay equity front.

How to stand up for pay equity

Companies can:

Individual women can:

Workplace equality is more than equal pay

Pay inequity is real across occupations, and we need to do everything we can to fix it. But that wage gap we hear about, where women make 80 cents to the dollar (and women of color well below that)? That’s not just about pay inequity.

In fact, when you compare pay for similar roles in similar companies, the gap’s much smaller. So what goes into that “80 cents to the dollar” gap? A whole lot of factors.

Some of the biggies: Women get unequal representation in managementonly 6% of Fortune 500 CEOs are women, even with all the evidence that women in leadership perform better. They’re also not well represented on boards. (BTW, some people refer to equal representation in leadership as “gender parity,” not to be confused with “pay parity.”)

Another biggie: Men get 30% more promotions early in their career, setting their salary trajectories at a steeper angle from the very start. Women’s promotions, meanwhile, stall: Women’s salaries peak earlier. Equal pay for equal work is seriously just the tip of the iceberg.

What we can do to get to workplace equality

Companies can:

Individual women can:

Do you feel you’ve been paid and promoted fairly? What have you done to move toward gender equality at work? We’re most effective when we’re sharing our experiences openly — share yours with the hashtag #DisruptMoney or email us.

All opinions and views expressed by Ellevest are current as of the date of this writing, for informational purposes only, and do not constitute or imply an endorsement of any third-party’s products or services.

Information was obtained from third party sources, which we believe to be reliable but not guaranteed for accuracy or completeness.

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Ellevest Team

The Ellevest team is working to help women reach their financial and professional goals.