The Persistent Gender Wage Gap and The Equal Pay Act: A Call For Mandatory Wage Disclosures

We marked the 50th anniversary of the passage of the Equal Pay Act a few weeks ago, yet the gender wage gap persists as does the debate on its causes and how to close it.  One of the currently fashionable explanations for the persistent gap is that women negotiate less and less effectively than men. There are two gaping holes in this “explanation.”

1.     Focusing attention on women’s negotiating skills seems to place the burden of achieving fair wages on women, when in fact the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964 place the legal burden to pay “equal pay for equal work” squarely on the employer. A gender gap in negotiating skills has been demonstrated, and improving women’s negotiating skills is an important cultural tool in narrowing the gap, but characterizing these skills as part of the cause for the gap implies that employers set wages and raises entirely as a reaction to their employees’ negotiating, irrespective of the fairness of those wage decisions. This view relieves the employer of responsibility for ensuring fair wages and places undue responsibility on the female employee to privately enforce the equal pay laws.

2.     Even the best negotiator cannot achieve wage equity in a vacuum.  If unaware of any gender wage discrepancy, then the negotiator will only ask for a fair raise based on her current salary. Therefore, improved negotiation skills as a solution to unjustified gender wage differences hinges on an assumption that women know what their male counterparts are being paid so that they can ask for an equity adjustment as well as a raise. Ignorance of this information undermines the entire negotiation, as it would for a man who was being underpaid.

When powerful women like Sheryl Sandberg focus on women’s lagging negotiation skills, they are effectively blaming women for the wage gap when the true culprit in the residual gender wage gap is wage secrecy.  Many respected sources, including the American Association of University Women and the government National Equal Pay Task Force, conclude that after you adjust for other factors that might contribute to the gap, such as career impact of parenthood and continued occupational segregation of women in lower paying jobs, there is still a gap and it can best be explained by gender discrimination. These illegal practices will continue until women become aware of the violations. Once aware, a woman can choose either to resolve the problem informally through negotiations with the employer or by filing a legal claim.

Government employers are legally required to publically post employee salaries and a number of U.S. companies voluntarily engage in wage transparency.  Still, 90% of American labor works in the private sector where most workplaces do not disclose wage information and where many employers actually prohibit employee disclosure of their own earnings.  Therefore, without a mandatory wage disclosure law, it will be impossible to close the gap because there will never be a way to thoroughly ferret out all remaining wage discrimination. Instead, enforcement of equal pay laws will continue to be erratic, driven by inadvertent discoveries of wage inequities.  In contrast, wage disclosure legislation would eradicate that part of the gap caused by illegal gender discrimination by providing the awareness women need to file a legal claim, while also giving women the information and motivation they need to negotiate effectively on their own behalf.

So bring on the negotiation workshops for women, but couple them with the salary information we need to best utilize those negotiation tools. Simultaneously, a mandatory wage disclosure law will enhance all other efforts to close the gender wage gap. Wage differences currently explained by the “Mommy Penalty” could be more fully explored to ensure that there is a true correlation between reduced experience and pay. Gender wage differences within particular jobs (whether these be traditionally male or female jobs, bottom tier, mid-level or CEO level jobs) could be more easily illustrated to young women choosing careers, to employers seeking to assess potential biases of managers, and to the EEOC and courts evaluating wage discrimination claims. And, of course, negotiations with employers would be better informed conversations.

President Obama marked the 50th anniversary of the Equal Pay Act by calling for Congress to pass the Paycheck Fairness Act. As much as I applaud his position, the Paycheck Fairness Act, much like the Equal Pay Act signed by President Kennedy 50 years ago, is incomplete because it does not eliminate wage secrecy.  Congress should enact a mandatory wage disclosure statute in conjunction with the Paycheck Fairness Act to complete the toolkit of approaches to eradicate the gender wage gap. This is the next and last logical legal requirement necessary to finally fulfill the promise of equal pay for equal work.

Marianne DelPo Kulow is an Associate Professor of Law at Bentley University in Waltham, Mass.