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Does sharing salaries in job postings help address the gender pay gap?

This story was originally published by The 19th on March 15, 2022.

After years of little progress toward pay equity, more and more states and localities are passing pay transparency laws that eliminate the secrecy around salaries and could be a powerful tool for eliminating the gender pay gap.

Tuesday’s Equal Pay Day was the first in a series of days across the year that highlights how little progress the country has made toward closing the gender pay gap. Pay transparency — requiring employers to share pay minimums and maximums for job postings — is considered an effective mechanism to close that wide, persistent gap, and some of the most far-reaching legislation has come in recent months, with bills taking effect in Colorado and passing in New York City.

WATCH: President Biden gives remarks on Equal Pay Day, Women’s History Month

Advocates believe pay transparency laws, and the framework of the new bills, could drive a push for federal legislation and amass enough data to create the first databases of gender pay disparities in the United States, which would give workers more negotiating power when applying for jobs.

“It’s really hard to know you’re experiencing [pay discrimination] because there is such a culture of secrecy around pay,” said Emily Martin, the vice president for education and workplace justice at the National Women’s Law Center. “Part of the answer to closing gender wage gaps and racial wage gaps … is greater pay transparency because sunlight is a disinfectant here.”

Since Equal Pay Day was introduced in 1996 to mark the day when women catch up to the wages white, non-Latino men earned the year prior, the United States has improved on pay disparity by just eight cents. Women were earning about 75 cents for every $1 earned by white men in 1996 — in 2022 it’s 83 cents.

This year, advocacy group Equal Rights Advocates, a nonprofit gender advocacy organization that co-founded the Equal Pay Today! campaign in 2013 and helps set Equal Pay Days, began to take into account part-time and gig workers when comparing pay, pushing Equal Pay Days for women of color later into the year. According to their calculations, for each $1 earned by a white man:

  • Asian American, Native Hawaiian and Pacific Islander women earn 75 cents, making their Equal Pay Day May 3
  • Black women earn 58 cents, making their Equal Pay Day September 21
  • Native American women earn 50 cents, and their Equal Pay Day is December 1
  • Latinas earn 49 cents, and their Equal Pay Day is December 8

For Latinas and Native American women, the disparity is so wide that it would take until 2023 for them to catch up to white men’s earnings from 2021, but that day will be observed at the end of 2022 to avoid confusion.

Data is so sparse for LGBTQ+ people that it’s not known when the date would land — instead, Equal Pay Day is on June 15 this year, during Pride Month.

The gender pay gap, which compares the average salaries of men and women, shows opportunity gaps as much as pay gaps. It shows that, even as women make up a larger share of college graduates, men still tend to be in higher-paying jobs. The pay gap quantifies the inherent biases, occupational segregation and lack of leadership opportunities that lead women to have lower earnings.

It’s already illegal for employers to discriminate on the basis of sex, but gaps persist because employers continue to pay workers based on the prior salary, repeating inequities, or because women are less likely to negotiate salaries and more likely to be viewed negatively if they push for higher pay.

Pay transparency laws help workers see how much they can negotiate. When workers have more information about opportunities outside of their current positions, particularly about pay, they are more likely to apply for promotions or raises, which helps both in wage growth and upward job mobility and helps address the challenge of occupational segregation for women.

“Giving a pay range is a helpful prompt to demonstrate this might be a negotiating moment, that this might be the realm of possibility, in a way that also helps even the playing field a little bit between how men and how women respond to the opportunities to negotiate,” Martin said.

Pay transparency laws are still a fairly new phenomenon — the first bills passed in 2018 and were far more limited — so there is limited data on their effectiveness in the United States. Recent data from Canada on its public-sector salary disclosure law found that the law reduced the pay gap between men and women at Canadian universities by about 20 to 40 percent, according to a report from the U.S. Treasury Department released this month.

Many of the efforts around closing the gender pay gap have been focused on creating pathways for women to enter higher-paying jobs, but there has been less focus on ensuring that they are paid what men in the same positions get.

“It’s not enough to have our butts in the seats, we have to get the same cash in our pockets,” said Noreen Farrell, the executive director of Equal Rights Advocates.

Bills like the one in New York City, which is the most recent pay transparency law in the country, will require employers located in the city with four or more employees to post salary minimums and maximums for job openings. That could also help collect data that will help employees more successfully negotiate for a position, Farrell said. The law goes into effect May 15.

It’s part of a new trend in pay transparency laws, started by Colorado, that require more disclosure earlier in the application process.

Earlier pay transparency laws, passed in places including California, Maryland and Cincinnati, required employers to disclose salaries to only external applicants and only when requested by the applicant, said employment lawyer Christine Hendrickson. She is vice president of strategy at Syndio, a tech company that helps employers analyze their pay disparities by race, gender and other factors and create fair salary ranges for new employees to ensure equity.

Then laws started to pass in Connecticut, Nevada and Rhode Island that required employers to proactively provide salary ranges — but during the interview process and not in the actual job posting.

Colorado was the first to require salary ranges be posted on all job applications, taking the onus off employees to ask for the information. Colorado also built in a requirement that employers provide notice to all employees of promotional opportunities before filling those positions.

It allows people to advocate for themselves, said State Sen. Brittany Pettersen, one of the sponsors of the Colorado bill. “Oftentimes women are overlooked and we don't even get the opportunity to advocate on why we would be the best person for the job.”

It also helps employers, she said, because it helps weed out applicants who may not be interested in the position based on the salary range — but often that’s something that comes at the end of a lengthy interview process and not before.

The bills have also been met with some backlash. Employers, including Johnson & Johnson and real estate company CBRE Group Inc., have tried to skirt the Colorado law by saying remote workers can work anywhere except Colorado. Martin also said some advocates fear employers will try to game the requirements by making salary ranges so broad, they are essentially meaningless.

But, with more bills coming — including two moving in Washington state and the state of New York — it’s going to become increasingly difficult for employers to skirt the rules, and the patchwork of regulations could instead build a case for a national law or encourage employers to voluntarily share pay ranges, Hendrickson said.

“Once you have a jurisdiction like New York City, like California, where it impacts so many employers, it's at that point where you really need to begin thinking about a nationwide strategy,” she said.

But efforts to pass federal legislation have so far fallen short.

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The Paycheck Fairness Act was first introduced in 1997, and while it does not require employers post job salaries, it does ban them from asking about salary history, requires them to prove why pay disparities exist and bolsters legal protections for workers who file sex-based wage discrimination lawsuits or class actions. The bill most recently passed in the House in 2021 but failed in the Senate, opposed by Republicans who said they worried it would encourage lawsuits.

On Tuesday, President Joe Biden’s administration announced it was taking steps to reduce gender disparities in the federal workforce. The Office of Personnel Management is expected to propose a resolution to eliminate the use of salary history in setting pay for federal workers, a practice that has been known to carry over discriminatory pay practices from job to job. Biden also signed an executive order directing the Federal Acquisition Regulatory Council, which helps direct government procurement, to consider limiting the use of salary history for federal contractors. And the Department of Labor issued a directive reinforcing federal contractors’ annual obligation to conduct pay equity audits.

Asked if the administration is considering pushing for pay transparency legislation similar to what has passed in New York City and other localities, senior administration officials said the series of announcements “starts the path” through the federal workforce toward increased equity and transparency.

The pandemic has intensified the concern that the gender pay gap could worsen, especially for women of color.

Studies have shown that when workers are out of the labor force for extended periods of time, they struggle to return to work in jobs that are equivalent in pay and position to the ones they left. Economists at Northwestern University have estimated that the pandemic could set women back on gender parity as much as 20 years. Women of color experienced the most significant bouts of unemployment during the pandemic, and just last month, Black women’s unemployment went up while it was going down for other groups.

And while currently workers have leverage in a tight labor market and employers are offering more competitive pay and benefits, it has also meant that people entering the labor market don’t have good information on what pay should be.

“The old data is just not relevant anymore,” said Farrell, of Equal Rights Advocates. “The pandemic revealed in devastating clarity not just the bias against caregivers, but the lack of structures that then feed the bias. And so the idea that you can go back into the workforce, understand your worth and understand what your male colleagues are making — It's just critical.”

California just introduced a bill that would create the first public database of pay gap data. Employers of 100 or more that operate in the state would have to submit their pay data broken down by sex, race and ethnicity — a move advocates hope will help budge the significantly starker pay disparities for women of color.

That is the next wave of laws, Hendrickson said, “That’s what’s coming next.”