Equal Pay Day 2021
The views expressed here are my own and do not reflect those of the U.S. Equal Employment Opportunity Commission, its Chair or its Commissioners. Source material is available upon request.
Today is Equal Pay Day, the day when women’s earnings finally catch up to what white men in the U.S. earned the previous year. This year, it means that women on average had to work 82 days into 2021 to make what white men earned in 2020. It means women on average are paid only 82 cents for every dollar paid to white men.
The numbers are far worse when broken down by race and national origin. In 2020, for every dollar earned by white men, Black women on average earned only 63 cents; Native American women earned 60 cents; and Latinx women earned a mere 55 cents. While Asian-American women earned on average 85 cents on the dollar, among subgroups, some Asian-American women were paid as little as 52 cents compared to white men. Transgender women also face stark pay disparities. One 2008 study found that the earnings of transgender women fell by nearly one-third after their gender transition, while the earnings of transgender men slightly increased following their transition.
Even women in the federal workforce face a wage gap. In December 2020, the Government Accountability Office found that while the gap has narrowed over the years, most of the remaining gap, about 6 or 7 cents, cannot be explained by measurable factors. When broken down by race, the data mirrored the racial disparities in the private sector.
The reasons for the wage gap are complex. While some of the gap can be traced to differences in education or work experience, disparities exist even when controlling for these factors. Some employers continue to set wages based on stereotypes about the roles of women and men at home and in the workplace. Some employers base wages on past salary — a practice that in many instances effectively perpetuates the cycle of existing wage discrimination. Wage discrimination is also perpetuated by the lack of pay transparency and policies that prohibit employees from discussing pay and make discrimination “invisible.” Also, the absence of family-friendly workplace policies and protections contributes to the wage gap. Without such protections and without accessible child-care, many women have no choice but to exit the workforce and take time away from their jobs, thereby undermining their earning potential and widening the pay gap.
These inequities have only been exacerbated during the COVID-19 pandemic. Women have been disproportionately impacted by pay cuts, caretaking challenges, and job losses in industries that rely heavily on female labor (e.g., hospitality, leisure, retail sales, and healthcare industries). This is particularly true for women of color, who are overrepresented in low-wage, essential jobs that often offer no paid leave, benefits or other protections. These inequities have pushed over two million women out of the workforce, creating what Vice President Kamala Harris calls “a national emergency” that “demands a national solution.”
Indeed, a national solution is needed. Some proactive employers are taking meaningful steps toward achieving pay equity. Recognizing that business plays a critical role, several large employers voluntarily committed to the Equal Pay Pledge during the Obama Administration. They agreed to conduct pay equity analyses; embed equal pay efforts into enterprise-wide initiatives; and review hiring and promotion processes to reduce unconscious bias and structural barriers. Other employers have made commitments to pay transparency. Many federal contractors also are now bound by greater pay transparency requirements. Even the federal government, the nation’s largest employer, reviews its compensation practices to reduce the remaining pay gap.
The US Equal Employment Opportunity Commission (EEOC), whose mission is to prevent and remedy unlawful employment discrimination and advance equal opportunity in the workplace, is doing its part to eliminate the pay gap. Earlier this month, EEOC’s Memphis District settled a pay discrimination claim for $100,000 on behalf of two female managers at a financial services company who were paid less than male managers despite performing equal work. Similarly, last month, EEOC’s Houston District settled a wage discrimination claim against a hotel management firm for $400,000, where the firm paid a male worker at least 60% more than his female co-workers in his same position. And in December 2020, EEOC’s Philadelphia District won a nearly $200,000 judgment on a wage claim against the City of Baltimore and a library that paid female librarians less than male librarians for equal work. In fact, in 2020, the EEOC recovered over $10 million in monetary benefits for employees alleging sex-based wage claims, and it conducted significant outreach to educate employers and the public about pay discrimination.
The EEOC will continue to use all the tools it has at its disposal to enforce equal pay and anti-discrimination laws. But more is needed to strengthen our tools. To root out systemic pay inequities, we need Congress to pass the Paycheck Fairness Act, a bill that President Biden supports. It would modernize the 1963 Equal Pay Act to better reflect the realities of today’s workplace, and it would close loopholes that have eroded the efficacy of the law. In addition, we as a nation must turn our attention to the lack adequate workplace protections for pregnant workers, mothers, caregivers, disabled women, and older workers.
Equal pay and workplace protections are not just women’s issues. These are issues that impact all workers, families, and the economy in general. Closing the gender pay gap and enabling all women to maximize their earning potential is crucial to our economic recovery and necessary if we are to ever realize the promise of equity to which this country has committed itself. #EqualPayDay.