Salary Transparency Alone Isn’t Enough, Black Women Need These Changes Too
Wage bias has long affected marginalized groups, including women and people of color. Recent data from Hired shows a widening wage gap, except for white and Asian women, with Black women earning the least of any demographic group.
Salary transparency laws and practices aim to close the race and gender pay gap by removing biases. But can they really undo centuries of inequity?
Salary expectations and negotiations
As well as systemic issues of discrimination and prejudice, the expectation gap contributes to the wage gap. The expectation gap is the difference in salary expectations between demographic groups for the same role.
Hired found that only 25% of women felt adequately informed to negotiate compensation, compared to 39% of men. Women of color also expressed a greater need for help with getting the necessary knowledge and resources to negotiate their pay successfully.
Hired’s data also suggests that wage gaps widen as women progress in their careers due to various factors, including historical disparities and caregiving responsibilities.
Salary Transparency Laws
Black women have been banding together to share knowledge and advocate for themselves, encouraging each other to #AskForMore. But it shouldn’t be the responsibility of those most harmed by unequal systems to fix them.
Colorado, California, Maryland, Connecticut, Nevada, Rhode Island, Washington, and New York City have enacted various salary transparency laws to combat bias and discriminatory practices and close pay gaps.
The largest employer in the nation—the federal government—also recently announced plans to ban salary history questions from its own job interview process. Relying on an applicant’s salary history can lock individuals into lower wages throughout their careers, perpetuating the wage gap.
So far, 21 other states have already banned or regulated salary history questions to promote fairness.
Do these measures work?
Hired found that salary transparency laws narrowed pay gaps and increased the representation of women in many, but not all, states. Respondents in locations with salary transparency laws found them helpful, but many raised concerns about the breadth of posted salary bands.
Some workers have observed more than $100,000 range differentials on posted listings. Companies also aren’t required to list exact figures around bonuses or equity, which can dramatically influence compensation calculation and reinforce biases.
What else can we do?
While salary transparency laws can help empower workers facing gender and racial pay gaps, they won’t undo centuries of inequities on their own.
1. Audit your company
2. Be Transparent
Moreover, companies can commit to transparent compensation policies, making pay structures, promotion criteria, and raises readily available to employees.
3. Support caregivers
As women are typically charged with the responsibility of caring for children and family members, policies that support parental and caregiver leave, funding for childcare, and skills-building programs for employees returning after career breaks can promote fair pay.
4. Offer equity
People of color who participate in employee stock-ownership plans have 30% higher income and higher household wealth than their peers who didn’t. Offering employees a (transparent) stock-purchase plan can increase their non-salary compensation.
5. Offer Sponsorship
Finally, supporting women and people of color throughout their career journeys, such as through mentorship and sponsorship, can help them have the same access to building social capital at an organization.
Salary transparency legislation, combined with these other measures, can make significant progress in closing the racial wage gap and promoting equity in the tech industry.