Equal pay for equal work: A simple enough concept that somehow doesn’t seem to easily translate into practice.
There are three players involved in making equal pay more of a reality than it is today: The law, employers, and employees; each has a necessary but not sufficient part of this problem to address on their plate:
What the law could do
The law can mandate equal pay. For instance, in the US, equal pay regardless of gender was signed into a law by president John F. Kennedy in 1963, with the Equal Pay Act. The law was supposed to eliminate pay disparity for women, yet more than 40 years after the act was approved, the gender pay gap is still a reality. It seems reasonable to imagine that, even with better implementation and new rules to extend equality to others who suffer discrimination (because of ethnicity, sexual orientation, or disability), it will be a while before equal pay for all is a reality.
What employers should do
Employers, of course, have a lot of power to solve this. They can adopt strict rules to ensure fairness, and effectively run businesses that guarantee equality of treatment. But, this is something society can’t count on. The obvious reason is that employers often perceive increasing wages beyond the minimum they have to pay someone to be against their economic self-interest, even though such a view is short-sighted at best: Companies that have been maximizing profits by minimizing payroll are not only paying in terms productivity, as The New Yorker’s James Surowiecki recently discussed in his financial column, but are plain bad for the economy—hence, ultimately, for themselves—as they hold back growth. But addressing inequalities in pay would require businesses to raise many salaries—something most CEOs aren’t dying to do.
Interlude: The problem with negotiations
The other factor here is, even with the best intentions, negotiations get in the way. Salary negotiations are a vehicle of inequality—gender and otherwise. When CEO Ellen Pao decided to end salary negotiations at Reddit, many (mostly women) applauded, but most companies don’t seem intentioned to stop the practice. The fact is, by giving candidates the illusion of agency, companies often end up paying them a little less that they would have otherwise—not less than their initial offer, perhaps, but certainly not more than their max.
Besides, salary negotiations are appalling; they reward one’s ability to ask over one’s ability to do. People who are shortchanged on one job will likely suffer in the next, as their salary history becomes harder to shake. One mistake somewhere along the line—though it’s hardly fair to call negotiation, for someone whose job functions don’t involve that skill, a mistake—can have lasting effects.
What employees must do
Doing away with negotiations is a good first step, but it wouldn’t work without salary transparency. Transparency is knowledge, and knowledge is the ultimate weapon to address pay inequalities from the inside. Do you know if your company pays you fairly? Likely, you are not certain, and that’s because you don’t know how much others are paid. In that knowledge–knowing how much everyone around you makes–lies the key to know your value, and the fairness of your treatment. And this knowledge must rest entirely in the employees’ hands.
Sure, sharing one’s finances is the ultimate taboo in many, but not all, cultures—as anyone who’s ever been asked their salary by an Indian stranger can attest—but there are ways around it. So here’s a practical idea that has been employed in certain companies in lieu of unionized negotiations: simple and quick, that can empower you and your colleagues. Here’s what you do:
- Set up an anonymous Google survey that feeds into a spreadsheet;
- In the survey, ask key questions: role, years of experience, education level, ethnicity, gender, recognitions, anything relevant for someone working in your line of business;
- Give everyone who took the survey access to the results.
People who feel mistreated will be able to ask for explanations. And hopefully, things will be corrected. In a better world, your HR representative could share the spreadsheet with potential candidates. They won’t know who makes what, just how much someone like them makes, and so they’ll know how much to ask for.
There’s a lot more power in the employees’ hands than we sometimes believe, or exercise. It’s just a matter of, well, employing it.
We’d love to hear about your experiments and ideas to ensure fair pay—send them all to email@example.com.