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Bridging the Wage Gap


It’s been more than a half-century since President John F. Kennedy signed the Equal Pay Act, and seven years since President Barack Obama signed the Lilly Ledbetter Fair Pay Restoration Act. But the gender pay gap stubbornly persists.

Full-time women workers earn about 78 percent of their male counterparts’ earnings. The pay gap is even greater for African-American and Latina women, who earn just 64 cents and 56 cents on the dollar, respectively, compared with white non-Hispanic men, according to White House figures.

Critics have tried to explain away the pay gap by pointing to differences in occupations and career/life choices.

Not so fast: According to an American Association of University Women study, women one year out of college still make 7 percent less than men, even when you factor in variables like college major, occupation, industry, hours worked, GPA, type of college, age, geography and marital status. The pay gap is persistent — and all signs point to discrimination as the cause.

The wage gap isn’t just bad for women, it’s also bad for your bottom line. It hurts your female employees and pinches the pocketbooks of women who shop your stores and buy most of your products.

The pay gap is hurting our industry’s ability to recruit and retain, too. Pay and benefits are the top reasons that Millennials choose an employer, so it stands to reason that organizations that close the gender pay gap will attract the best talent and have a stronger, better-motivated workforce.

The Network of Executive Women believes that the retail industry — with its large female workforce — is especially well positioned to close the gender pay gap and become a leading talent destination.

Closing the pay gap may not be as difficult as you think. A recent article in The New York Times by Claire Cain Miller suggested two strategies worth considering:

  • Publish everyone’s salaries. This bold move would shine a light on pay discrepancies and, according to research by Washington University, result in higher pay levels by giving employees a stronger hand in negotiating. In the study, workers who reported that their managers were “very good” at sharing organizational financial information out-earned those who reported that their managers were “very poor” at financial disclosure, by 8 percent to 12 percent.
  • Treat women the same as men during salary negotiations. Research by Carnegie Mellon’s Linda Babcock shows that men are four times as likely as similarly qualified women to ask for higher pay. When women did ask for more, they asked for 30 percent less than their male peers. One underlying factor: Women who negotiate for higher salaries are perceived — by both male and female managers — as “less nice.”

In April 2015, Reddit interim CEO Ellen Pao addressed this by banning salary negotiations as a part of recruiting efforts. At the time, she told The Wall Street Journal that “men negotiate harder than women do, and sometimes women get penalized when they do negotiate. We come up with an offer that we think is fair.… we aren’t going to reward people who are better negotiators with more compensation.”

Catherine Tinsley, a management professor at Georgetown University who has studied the gender pay gap, says “being authentic” is the key to getting the best deal in negotiations. “If you’re not, it comes off as being disingenuous — and people get skeptical about it,” she told Bloomberg Business.

The greatest gender disparities in negotiations, according to Tinsley, are in areas where there’s ambiguity around what’s negotiable, such as bonuses and the dates of performance appraisals. “You have to brainstorm all the possible things you can get from the company,” she notes. “It’s much more than just salary negotiations.” You also “have to practice,” Tinsley advises. “As goofy as it sounds, you have to get up and practice with someone, because negotiation is a behavior — and in order to get better at a behavior, you have to engage in it.”

A study by PayScale found that significantly more women than men (31 percent versus 23 percent) are “uncomfortable negotiating salary.”

My advice to women? Grab a friend and practice “the ask.” If you’re told a positon’s salary is non-negotiable, ask whether there’s wiggle room on vacation time or bonuses. If your manager says that your requested salary requires “more experience,” know your true market value and be prepared to summarize all of your experience and accomplishments.

My advice to managers — male and female — sitting on the other side of the table? Ask yourself what you would offer a similarly qualified man. Then ask how much it will cost you to replace a highly trained and motivated female employee. The pay gap doesn’t just hurt her, it hurts your organization’s future, too.

Pay disparity persists, and discrimination is the cause.

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