Banking & Finance, Economic Development, and Law

Experts ask: ‘Will Michigan bridge the pay gap?’

Speakers, panelists discuss gender discrepancies in compensation from multiple angles.

November 1, 2019
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On average, women in the U.S. had to work until April 2, 2019, to make the same amount of money made by men as of Dec. 31, 2018. A recent gathering of experts explored that gap and what it will take to bridge it.

Fifth Third Bank, Rhoades McKee and West Michigan Woman magazine hosted “Will Michigan Bridge the Pay Ga-p?” on Oct. 23 at StoneWater Country Club, 7177 Kalamazoo Ave. SE in Crystal Springs.

Cat Brainerd, attorney at Rhoades McKee; Beth Kelly, president of HR Collaborative; and Terry Barclay, president and CEO of Inforum, were the featured speakers, covering the topic from legal, human resource and leadership trend perspectives.

Panelists included Carl Erickson, board chair and founder of Atomic Object; Rachael Owsinski, VP, senior talent acquisition leader at Fifth Third; and Kelly and Barclay.

Legal perspective

As the first speaker, Brainerd provided an overview of the federal and state laws that govern equal pay in the U.S.

These include the Equal Pay Act of 1963, which amended the Fair Labor Standards Act; and the executive directive Gov. Gretchen Whitmer issued in January to forbid state departments from considering salary history in job interviews — a practice that tends to perpetuate the pay gap between men and women.

However, the state of Michigan also in 2018 passed a law prohibiting private sector companies from banning salary history questions during the hiring process, which means they can do what state departments cannot.

At the federal level, the Paycheck Fairness Act (H.R. 7), which would amend both the EPA and the FLSA, remains in limbo. The first version was introduced in 1997 and failed to pass. Since then, 12 other versions have followed, most recently the one proposed in April, which the Business Journal reported on in June.

The bill, if passed, would “scrutinize seemingly neutral pay practices for legitimate business purposes; limit (considerations) to bona fide factors such as educating, training and experience” and narrow the extremely broad definition allowing “any factor other than sex” as a justifiable reason for lower pay, to “it has to be a job-related, business necessity.”

The act also would prohibit retaliation on the part of employers against workers who discuss, inquire about or disclose their wages or the wages of others on the job. Brainerd said this would be a “huge” step to give women actionable insight into how big the pay gap actually is among colleagues with “substantially equal” roles.

“This would also permit class actions, which would change the scope of litigation significantly,” Brainerd said.

Brainerd is optimistic that the Paycheck Fairness Act will eventually pass.

“Generally, it has been split across party lines. But I think we will see this coming up again and again, and at some point, I suspect we’ll see this push through,” she said.

She added: “It’s important to note that even if the Paycheck Fairness Act is passed, there’s still an extremely high burden on the employee on the front end. There’s still a lot to prove in order to establish that a violation has occurred.”

An additional package of 11 bills has been introduced in the Michigan Legislature to “move the ball forward” on equal pay, Brainerd said. More information about those bills — H.B. 4629-4639 — can be found at bit.ly/payequitybills.

HR perspective

Kelly moved the conversation about pay equity to a more personal level, sharing the story of her brother-in-law and sister, Chuck and Jewel, who are in their late 50s and whose male/female pay gap is so wide at this point that it is unlikely to diminish.

When the pair graduated from the University of Michigan in 1982, they were on equal footing. But then Chuck went on to medical school and, instead of furthering her own education, Jewel entered the workforce to pay for Chuck’s expenses.

After Chuck completed medical school, they moved to California, drawn by its diversity. Although Jewel could expect wages there to be 2% to 27% higher, the cost of living also was 58% higher.

So, when it came time for Jewel and Chuck to have a family, and they wanted to have one parent stay at home to care for the children, Chuck could make more money as a doctor, so Jewel stayed home.

“Men and women start at the same about the same level in terms of their earnings, but it’s about at childbearing age that they start to divide,” Kelly said, showing a graph that plotted an almost $15,000 gap in pay between male and female full-time workers on average by the time they’re between the ages of 55 and 64.

After her kids reached school age, Jewel went to work as a teacher. Her wages continued to be lower than her husband’s at this point because of the occupational divide.

But Kelly pointed out that statistically, within the same professions, the roles women traditionally dominate and the roles men dominate are valued unequally, even as they do substantially similar work.

For teachers — where women work more often in elementary grades and men more often work at the high school level — the wage gap is 3.6%.

In business, the gap between HR reps (most often female) and accountants (more likely to be male) is 15.8%.

Pediatricians (statistically female) make 18% less than sports medicine specialists (predominantly male).

The gap for female attorneys is larger still, with those who practice family law making 39% less than any other kind of lawyer.

Women in athletics have it even rougher, with the money coming from sponsorship deals and games significantly lower for females. Olympic gold medalist, retired soccer player and coach Abby Wambach’s projections of net worth are at $4 million, while former NBA star Kobe Bryant’s projected net worth during the same period was at $350 million.

Tallying all the factors that go into income disparity — part-time work, fewer years in the workforce and longer life expectancy — women can expect to see a 33% wage gap at 65 years of age, Kelly said.

To leave the audience with a bit of hope, Kelly pointed out companies like Salesforce and Intel that have publicly committed to bringing employees up to wage parity, as well as to initiatives like Melinda Gates’ $1 billion fund for increasing pay equity.

Additionally, Kelly noted Generation Z, more than any previous generation, is demanding transparency and pay equity by choosing to work for companies that are making it a priority.

Leadership trend perspective

Barclay said Inforum’s biannual Michigan Women’s Leadership report comes out in January, and it will refresh data on the pay gap in boardrooms and C-suites and how long it will take to reach parity if things continue at the current pace.

She cited data showing the pay gap for Michigan workers is the 20th largest in the U.S. and is worse everywhere for women of color (see infobox) and part-time workers, while the gap is lowest where poverty is highest.

At the very top, according to Inforum’s 2017 Michigan Women’s Leadership report, only 9%, or 35, of the 387 highest-paid executives at Michigan‘s top 100 public companies in 2017 were women.

She echoed Kelly’s words in describing how we got here — in part because male-dominated jobs are historically valued higher.

But also, when work becomes more valued, men move into it and outnumber women; more women than men work part time due to home and family responsibilities; and education is not an equalizer.

Barclay cited an Economic Policy Institute report from 2019 that said “at every educational level, women were paid less than their male counterparts. The average wage for men with a college degree is higher than the average wage for a woman with an advanced degree.”

She said the best tool in the pay gap fighter’s toolbox is transparency — getting companies to share their methodology so the public can see it for what it is.

The responsibility to close the gap does not belong to women alone, she said. Men and women in positions of leadership need to train women to negotiate salary so they get what they’re worth. Companies need to hire and promote women into male-dominated positions, offer work flexibility without financial penalty for those with families and salaries need to be based on the value of the position, not on the number of hours worked.

She said for those things to happen consistently, we need more women with a seat at the table on corporate boards and more women in the C-suite.

Panel

During the panel discussion, Erickson shared that Atomic Object decided to eliminate the need for salary negotiations by systematizing its approach to setting salaries, so prospective employees would know their compensation is not determined by a negotiating skill they may or may not have.

Owsinski said that Fifth Third gives women the opportunity to be the partner with a bigger career so that when they decide to start a family, they don’t have to drop out of the workforce. Such benefits include a maternity concierge for expectant mothers, adoption assistance and flex hours.

As a group, the panelists agreed that to be competitive in the workforce, women need to have access to mentorship and strategic connections just as men do, and corporations should provide avenues such as employee resource groups (ERGs) that allow employees to safely bring forward pay equity concerns.

Equal Pay Days 2019

Dates are based on adjusted 2017 U.S. Census data on median earnings for full-time, year-round workers. 

Wage gap overall

Women compared to men: April 2, 2019 — $0.80 on the dollar

Wage gap by demographic

Women of color as compared to white, non-Hispanic men:

Asian American women: March 5, 2019* — $0.85 

White women: April 19, 2019 — $0.77 

African American/black women: Aug. 22, 2019 — $0.61 

Native American women: Sept. 23, 2019 — $0.58

Latinas: Nov. 20, 2019 — $0.53

*Equal pay figures for the Asian community vary widely by ethnicity.

Source: equalpaytoday.org

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