In California, employers may no longer ask for past salary history, a move advocates say will help to reduce pay inequality — employers are also required to furnish pay scale information upon request. Meanwhile, in Iceland, employers are required to obtain certification verifying that they pay female employees equally. These kinds of legislative moves are being touted as a way to address the gender pay gap, but are they effective?
The question of how to hire and make compensation decisions more justly is a complex one that’s involved considerable debate, including among people who generally agree that there is a pay gap between men and women, and want to close it. It’s manifestly unjust for people to receive different pay for the same work on the basis of gender, as for example at Google, where male teachers in the company’s childcare centre earned more money than their female counterparts, according to a recent class action suit.
From a remove, such legislation seems like an excellent solution to a systemic, entrenched problem: Salary history, for example, is often used to make discriminatory offers. A woman who made $70,000 for a substantively similar job might be offered, say, $80,000 by a new employer — but a man who made $100,000 for the same work might be offered even more. That allows pay disparities to exist not just within companies, but across a lifetime of earnings, with women forever playing catchup. Similarly, lack of awareness about the anticipated payscale for a job might make women underbid, uncertain about how much to ask for, and unaware that a prospective employer is willing to pay more.
But how does this work out in practice? The California law allows employers to consider salary history if people voluntarily bring it up — which creates incredible pressure for hiring managers and recruiters to figure out how to subtly push people into sharing their salary history. California, a U.S. state, is part of a larger and more complex cultural phenomenon: The problem isn’t just that people use this information to make discriminatory hiring decisions, but that they operate in a culture where this is sometimes actively encouraged, and certainly tolerated.
The gender pay gap in the United States — which is especially stark for women of colour — is as large and persistent as it is because socially, the United States has tolerated it. Antidiscrimination legislation may attempt to legislate discrimination away, and may even help narrow the gap through sheer force of will, and the creation of legal grounds for suit, but it doesn’t solve the underlying problem. The United States is racist and misogynistic, and that plays out not just in terms of people offered unequal pay for equal work, but who gets hired in the first place. Tech companies, for example, preferentially hire white men for technical pipeline jobs, while nontechnical jobs are more heavily occupied by women and people of colour (including, of course, women of colour).
It’s not just that side-by-side salary disparities are endemic, but that some groups are offered more opportunities for earnings and advancement than others. Over a lifetime, that can translate to a tremendous pay inequality. But on the surface, a company can say it’s ‘hiring the best fits’ and ‘would really love to hire women but no one is qualified,’ declining to engage with its own responsibilities and still radically underpaying people in some positions in comparison to others, resulting in a net inequaliy. Companies are reluctant to publicly share their salary information, which makes it hard to determine how entrenched the problem might be, but locating data on demographics can be relatively straightforward, illustrating who is being hired to fill which positions.
California could potentially pursue a law similar to Iceland’s, requiring proof that companies are providing equal pay for equal work. But in a nation where this isn’t enshrined as a real value, such legislation may be doomed to failure, and gaming of the certification process. Perhaps that means using slightly different job titles, and refining on-paper descriptions of job responsibilities, for example, to allow people performing substantively similar work to be paid at different rates.
Contrast this with Iceland, a nation with much better gender parity. Iceland’s relative equality isn’t just a function of a series of laws forcing employers to treat people equally. It’s also a distinct cultural difference, in a nation where more women are elected to public office, where women have better educational and social outcomes, where women tend to be healthier, where women are more empowered. In Iceland, equality is recognised as part of a larger series of interconnected issues that can’t be resolved simply through a law mandating equal pay — the law instead enforces social values, rather than trying to construct them from scratch.
This isn’t to say that the United States should give up on legislative approaches to pay disparities or other inequality. Anti-discrimination law can and does play a vital role in moving the bar on social equality, whether it’s the Voting Rights Act of 1965, or the Americans with Disabilities Act of 1990. But as recent attacks on both of these landmark laws illustrate, legislation is nothing without concurrent social action to entrench these laws as national social and cultural values. Otherwise, the law becomes a thing to be dodged and worked around, or, when that doesn’t work, to be dismantled in order to enable a discriminatory status quo.
Legislation is most effective when it identifies and reinforces social values with the goal of strengthening them, and making them a core part of society. When legislation flies in the face of social attitudes — for good or ill — it’s challenging to enforce it. Decades of work on the part of people fighting pay disparities may be driving a conversation about these issues, but they need enthusiastic buy-in from the people in decisionmaking capacities. If laws help to do that, likely driven by suits targeting serial or egregious violators, that’s a net good — but people shouldn’t be resting on their laurels, thinking the work is done with the signing of a bill and a pretty speech.
Photo: Nic McPhee/Creative Commons