2023 is upon us and (hopefully) starting with a bang. Beginning January 1, additional efforts will be made toward eradicating the ever-impending wage gap. To refrain from future wage gaps understanding what they are and why they exist is essential.

What is a wage gap?

There are two prevalent wage gaps within the United States relating to gender and race. The gender wage gap is defined as the measure of pay disparity between men and women which has remained relatively stable over the past 15 years. According to an analysis of median hourly earnings of both full- and part-time workers, in 2020, women earned 84% of what men earned. Aside from gender, there is an imminent wage gap related directly to race, or more specifically women of color. The wage gap for many women of color is not only wider than the overall gender wage gap, but it is also closing at a slower rate. The Black women’s earnings ratio changed from 59% to 63% – a 4% difference – at which rate, the gap will not close for 350 years (the year 2369 to be exact). Additionally, Latina earnings only saw a 2% difference since 1988, giving a projected close of 432 years.

Why are wage gaps occurring?

Measurable factors like educational achievement, occupational segregation, and work experience have proven to heighten the wage gap. The narrowing of the gap is attributed to gains women have made in each of these dimensions, increasing their presence in higher-paying jobs typically occupied by men. Despite their efforts, women – both white and of color – continue to be overrepresented in lower-paying occupations. Other factors more difficult to measure are as follows:

  • Gender discrimination – Recent surveys conclude about four-in-ten working women have experienced gender discrimination at work (50% higher than men).
  • Discriminatory pay practices – Hiring prospective employees based on their past pay rather than what they are worth whether it be $5k, $10k, or $20k more than their previous role.
  • Family leave and childcare policies – Women are statistically more likely to take time off to care for a child. Employers with inadequate family leave policies often put working parents in an impossible position, forcing them to settle for lower-paid or part-time jobs offering flexible scheduling.

What’s being done to close the wage gaps?

In recent months “pay transparency” laws have begun to surface in places like New York City, Colorado, and California (39-million-person population). Specifically in New York City, the law requires businesses with four or more employees – and at least one employee in the city – to post “good faith” salary ranges in any advertisement for a job, promotion or transfer opportunity that would be performed at least partially in the city.  Violations will be considered a form of discrimination and carry fines of up to $250,000. Additionally, annual pay audits, the expansion of family medical leave, and the increase of minimum wage are small steps toward minimizing a large problem.

For further assistance in finding qualified candidates to fill your open roles, please contact us at (518) 275-4816.

 

 

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