How Small Businesses Can Help Close The Wage Gap | Equal Pay Day

Illustration via Weronika Mikulska 

In an ideal world, all workers with similar qualifications doing equal work would receive equal pay for that work, regardless of gender or race. And when December 31 rolls around, men and women working the same job could add up their paychecks for the year and come up with the same total.

Unfortunately, women — particularly women of color — are routinely paid a fraction of what men earn, even when they work the same jobs. So, women have to work far into the following year before their total pay equals what men had earned by December 31.

According to 2018 U.S. Census data on median earnings for full-time, year-round workers, a woman makes $0.82 for each dollar a man makes. Therefore, she must work a full year plus the first three months of the following year — until March 31 — in order to make what a man earns in a year.

This is why we commemorate Equal Pay Day on this date.

The numbers look even bleaker for most women of color and for mothers. Here are the equal pay observance dates for women in various racial groups, along with the amount of money each group makes compared to white, non-Hispanic men.

There’s an Equal Pay Day for each race 2020

• Asian Women’s Equal Pay Day: February 11, $0.90
• All Women’s Equal Pay Day: March 31, $0.82
• Mom’s Equal Pay Day: June 4, $0.70 (compared to working dads)
• Black Women’s Equal Pay Day: August 13, $0.62
• Native Women’s Equal Pay DayL October 1, $0.57
• Latina Equal Pay Day: November 2, $0.54

How Equal Pay Day is commemorated

Traditionally, women wear red on Equal Pay Day to symbolize working “in the red,” or for less money than they’re worth. This is a great way for individuals to raise awareness about pay equity. But what can you, as a business owner, do to help commemorate this day? Here are a few ideas.

Assess your own pay policies and procedures

How do you decide how much to pay new hires? What factors do you consider for pay raises? What about job promotions? And how do you know if your own practices are equitable?

A woman makes $0.82 for each dollar a man makes. Therefore, she must work a full year plus the first three months of the following year — until March 31 — in order to make what a man earns in a year.

Start by looking at your numbers. Compare the salaries, pay raise history, and job promotion history of all your employees, separated by gender and race. If there is a noticeable discrepancy, you may have a pay equity problem.

Here are some steps you can take to make your pay scale more equitable:

1. Make your compensation policies totally transparent, and let your employees know that it’s OK to share salary information with their co-workers.
2. Correct any obvious inequities by offering raises to underpaid employees.
3. Don’t ask new hires for their salary history. If you base the salary you offer on an applicant’s salary history, then you will automatically be paying female hires less since they are coming in on unequal footing. Instead, pay all new hires according to the market value of their position.
4. Research the relevant outside labor market and create salary ranges for each position at your company.
5. Create a standardized performance review policy so that you can make objective decisions for performance based raises. Also be sure that each manager who reviews employee performance understands your rating scale and applies it the same way for each employee.
6. Re-evaluate your pay scale annually, and make adjustments when necessary.
7. Ask your staff for suggestions. Your employees probably have some great ideas on this issue.

In addition, it’s important to ensure that both men and women receive the same opportunities for projects and leadership roles. Again, take a look at your own history of making these assignments and determine whether or not a discrepancy exists. If it does, it might be time to change the way you make these decisions.

Organize an Equal Pay Day media blitz

Connect with other business leaders in your community, and encourage both managers and staff to submit letters to the editor and Op-eds to all of your local news outlets. You want a variety of voices represented from every level of your company, and writers of as many genders and races as possible. You might even consider hosting a “writing event,” during which people can gather to write their letters and essays.

For tips on how to write effective op-eds and submission information for newspapers, check out the Op-ed Project.

Host a salary negotiation workshop

Want to go even bigger? Host a salary negotiation workshop in your community, and invite all interested women to attend.

Salary negotiation skills empower women and minorities to demand higher pay commensurate with their own valuable experience. There are a number of factors that contribute to the gender pay gap, including discrimination. But there are also gender differences in salary negotiation, and this plays a role in pay equity as well. When women learn to confidently negotiate their salaries, they are able to self-advocate to help close the pay gap.

Not sure how to host a workshop? The American Association of University Women will bring a workshop to your space. They also offer free online workshops, if the in-person workshops are not feasible for your business.

We hope you can use some of these ideas in your business. Of course, you can also get creative. What other ideas can you come up with to support pay equity in your business, community, or industry? We’d love to hear your ideas!