News

Salary Transparency Linked to Smaller Gender Pay Gap

New Analysis Also Explores How Gap Affects Women in Retirement

The gender pay gap tends to be narrower in job sectors were wages are transparent, according to a new analysis by the American Association of University Women (AAUW).

• In the federal government, where salary ranges are published, there is a 13% pay gap between men and women.

• In state governments, which also often post salary ranges, the gap is 18%.

• In the private for-profit sector, where there is typically little salary transparency, the gap is 29%.

“This underscores the need for all employers to be more transparent about what jobs in their organizations pay. When salary information is out in the open, both employees—and employers—can identify gender-based pay disparity and take steps to correct it,” says Kim Churches, CEO of AAUW.

These findings are included in the 2019 update to AAUW’s annual report, “The Simple Truth About the Gender Pay Gap.” Based on data from the U.S. Census Bureau, the report shows that in 2018, women received just 82 cents for every dollar paid to a man. Women of color often face a wider gap: Compared with white men, black women make 62 cents on the dollar, and Latinas make 54 cents on the dollar.

Gap Hurts Women in Retirement
The AAUW analysis also found that the pay gap, which starts as soon as women enter the workforce and grows throughout their working life, continues to hurt them in retirement:

• Women collect only about 80% of what men do in Social Security benefits—a shortfall of about $307 a month for women over 65.

• Women’s pension income is only 76% of that collected by men.

• Women’s overall retirement income, which includes Social Security, pension, interest and dividend income, and other sources of income, is only 70% of men’s retirement income.

“The gender pay gap leaves women economically insecure at a most vulnerable time in life,” Churches says. “A wage gap is unacceptable at any stage of life, but in retirement, it feels particularly egregious. We need to double down on our efforts to close that gap to ensure that women can be as economically secure as their male counterparts, no matter what their age.”

AAUW’s Approach to Closing the Pay Gap
AAUW is taking a multipronged approach to closing the gender pay gap. On a federal level, AAUW is advocating for the House of Representatives–approved Paycheck Fairness Act. And at the state and local levels, it is working to strengthen and pass new laws promoting equal pay. AAUW is also working with employers to improve practices and to proactively seek out ways to close the gender pay gap, including increasing salary transparency.

Additionally, AAUW works directly with women, training them in leadership and negotiation skills so they can maximize their earning potential. AAUW has teamed up with major cities, including New York, Boston, San Francisco, and others, to offer in-person salary negotiation trainings. It also offers Work Smart Online, a free one-hour course designed to train women in salary negotiation. AAUW has set the bold goals of training 10 million women in salary negotiation by 2022 and closing the gender pay gap by 2030.

Resources
Additional information about AAUW’s salary negotiation workshops, including upcoming events in states and online, is available at https://salary.aauw.org/attend. More on AAUW’s advocacy work at the federal, state, and local level can be found at www.aauw.org/fairpay.

Source: The American Association of University Women