March 14th was Equal Pay Day. Women work to provide for themselves and their families, but upon learning that they make less money than their peers, women can feel less valued, have lower morale, and be prevented from reaching their goals at the same speed as their colleagues.
Equal Pay Day is recognized to raise awareness about the gender wage gap in the United States. In 1963, The Equal Pay Act was initiated to protect employees against wage discrimination based on their sex. In addition to the Equal Pay Act, Title VII of the Civil Rights Act of 1964 also protects employees from pay discrimination based on race, religion and nation of origin.
Some states have made an effort to stop pay discrimination by preventing employers from asking applicants their current or past wages on applications, or basing an applicant’s salary on their previous salary from another company.
Though we have made progress towards equal pay, in 2023 there are still some discrepancies some women face. In 2021, a study showed that women earned an estimated 82 cents per dollar earned by a man in a similar role. In a 2022 survey conducted by the U.S. Bureau of Labor; found that men with less than a high school diploma earned $745 per week while women with the same education earned $594. In another education bracket, men with a master’s, professional or doctoral degree earned an average of $1998 per week compared to their female counterparts who made $1546.
Why is equal pay important and how can this be improved for the future?
This issue can impact your employees view of the workplace, and you may not notice it. Employees may discuss their salary with one another, and emotions can run high if someone learns that they have been paid less than their peers. When employees feel that they are not being valued, it can lead to turn over, low morale and cause productivity to drop.
To prevent issues that may arise, you could create a compensation analysis for your business to ensure that employees are being paid fairly for their work based on a number of factors:
- Current industry
- Previous work experience
- Level of education
- Location of the business
- Skill sets
- What are competitors paying employees
- Length of time employee has been in position within the company
- Performance reviews
- Race and ethnicity
Creating a compensation analysis for your business not only puts your employees first, but also ensures your business’s compliance. By reviewing your analysis, you and your team can compare your current salaries to the market average, and offer applicants a competitive wage, which will also attract more applicants to your posted positions.
We believe that when you take care of your employees, they will take care of your bottom line.