05/17/2020
The World Economic Forum estimates that it will take over 200 years to close the gender pay gap. No one should have the patience to wait that long. How can we accelerate change? The answer may lay in data and models with a good dose of transparency.
First, let’s clarify what we mean by the pay gap. There are two different pay gaps, with different meanings and root causes.
The absolute pay gap is the difference in average pay between men and women. This is estimated to be about 19 percent in the U.S.—and if broken down by ethnicity, the gap is much larger for women of color.
The unexplained pay gap is the pay gap that remains after accounting for job selection, education and other factors that should contribute to pay. While estimates differ, the unexplained pay gap is estimated to be anywhere from 5 to 12 percent.
In recent years, some individual states (California, Massachusetts and New York, to name a few) have introduced new legislation to improve the legislative framework surrounding equal pay and thus accelerate the closing of the pay gap. For example, California reversed the burden of proof in equal pay cases, and Massachusetts made it illegal for employers to ask about an applicant’s prior pay. However, the impact of these regulatory changes is unclear.
