Who is Hit Hardest by Pay Inequality?
New research released this week examines what may be driving the ongoing gender-pay gap—and sheds light on the women who are especially disenfranchised by pay inequality.
According to PayScale Inc.’s The State of the Gender-Pay Gap in 2019, which used crowdsourced compensation data, American women across all industries and job levels earn 79 cents for every dollar a man makes. This gap shrinks to 98 cents per dollar when you view the stats through the lens of the “controlled” pay gap, which measures mean salary for men and women with the exact same job and background.
The numbers illustrate that women are more likely than men to work in lower-level, individual-contributor positions and progress to higher positions more slowly—a trend the organization refers to as the “opportunity gap.” Seventy-four percent of men and 75 percent of women began their careers in non-supervisory roles, yet, by mid-career, 47 percent of men and 40 percent of women have progressed to the manager level; by late career, those numbers shift to 57 percent and 41 percent, respectively. The report reaffirmed a widespread lack of diversity in the C-suite; by late career, 8 percent of men and 3 percent of women have made it to the executive level.
These divides are further exacerbated by a number of factors—particularly, race. When it comes to the uncontrolled pay gap, white women earn approximately 80 cents for every dollar a white man makes—compared with 74 cents for women who identify as American Indian, Alaska native, black and Hispanic. Within the controlled pay gap, black women earn 97 cents for every dollar a white man makes.
Women of color also face disparities in career progression. In the study, 56 percent of white male respondents identified as individual contributors, compared to:
- 72 percent of Asian women;
- 67 percent of black women;
- 66 percent of Hispanic women;
- 63 percent of American Indian women;
- 62 percent of white women; and
- 61 percent of native Hawaiian women.
For organizations looking to analyze and act on pay inequality, PayScale also offered a step-by-step pay-equity guide. The place to start, according to the report, is a comprehensive pay-equity analysis, examining wages by job, as well as among departments, functions, manager-to-manager and across locations, as well as in bonus plans—and immediately address any gaps. Embedding inclusion in hiring, talent management and compensation is key to making pay equity sustainable, the report’s writers say. Pay attention to language in job postings, use blind-resume reviews, diversify the applicant pool and, if you must rely on employee referrals—which the report notes tilt in favor of white men—incentivize employees to refer underrepresented candidates. The report also advises HR leaders to use standardized interview scorecards, avoid salary-history questions, continuously review hiring managers’ offers to spot trends, frequently monitor for pay equity, have oversight on pay-increase recommendations, open lines of communication with employees and be transparent about diversity levels.
“The ongoing conversation about gender pay is really a call to action for employers to provide equal access to the best-paying positions in their organizations,” said PayScale Vice President Lydia Frank, who noted that all women experience pay inequality uniquely because of their individual identities. “Working toward a deeper understanding of these elements and developing a process for mitigating any biases that exist are the best ways for employers to establish equitable earning potential at their organization. That means being proactive, looking at data regularly and being holistic in your approach.”