Pay Range Transparency Will Close Gender and Racial Pay Gaps, Benefit Businesses
MDCEP Policy Intern Megan Condon contributed to this post
Equal Pay Day serves as a reminder of the ongoing gender pay gap and the need for action to achieve pay equity in the workplace. This year it takes place today, March 14, which symbolizes how far into the year women must work in order to have earned what men made in the previous year. Currently, women in Maryland are typically paid just 86 cents for every dollar paid to a man.
This legislative session, MDCEP amongst other fair pay advocates is supporting a bill (House Bill 832) that would require employers to include the possible salary range for a role. Disclosing a salary range is a simple and effective way to increase transparency and close both gender and racial pay gaps.
When women aren’t paid fairly, it makes it harder for them to take care of their families, limits their ability to build wealth, and improve their standard of living. With rising costs and another possible economic downturn, it is more important than ever to ensure women are no longer at an economic disadvantage. Closing the wage gaps are fundamentally about expanding economic opportunity to every single individual regardless of who they are or what they look like.
Not only does equal pay benefit individuals, but it also benefits the employers by saving time during the hiring process. Equal compensation for all employees, regardless of gender, race, or other factors, can attract and retain great talent. Research shows that companies that follow these best practices are more likely to draw diverse individuals and keep high-performing personnel if all employees are paid equitably. Employees are more driven to work harder and be more productive when they believe they are being paid fairly. This drive can result in more productivity and better outcomes for the company. Eliminating pay secrecy also prevents businesses from wasting time in the hiring process interviewing candidates who won’t accept an offer for what the business can afford to pay and allows them to use those resources elsewhere.
Women suffer the most when businesses fail to disclose the salary for open positions. The biggest wage discrepancies are experienced by women of color, who frequently indicate far lower minimum income needs than other applicants. However, research indicates that there are less gender variations in negotiation results when candidates are fully informed about the context for discussions, including the salary range. Currently, Maryland requires wage ranges be provided at some point in the hiring process, however this bill will require employers to state the possible salary range for the role in the job posting.
Colorado, New York, Washington, and California specifically require wage ranges be included in job postings, and a number of other states are currently considering similar policies. Requiring wage ranges to be included in the job postings has been proven to be effective at reducing the wage gap and providing more equitable opportunities during the hiring process.
Greater transparency is the next step to strengthen Maryland’s equal pay protections. Thanks to our existing equal pay laws, Maryland women make 86 cents for every dollar paid to men, which is higher than the national average. Despite that, Maryland women could lose up to $269,080 over the course of a 40-year career when compared to a man because of pay disparities. And for women of color, this loss is even higher. For example, Black women make 68 cents for every dollar and Latinx women make 46 cents for every dollar. Being consistently underpaid translates to a lifetime of losses with long-term effects.
Today also symbolizes my daughter turning 10 months old. If there is one major takeaway I have so far, it’s that raising a baby under 1 has reinforced how time becomes distorted and scarce. When employers share the pay ranges and the benefits, especially in the beginning of the hiring process, it saves time. It ensures that women can spend their time searching for jobs that meet their families’ needs and their financial goals. Pay transparency and benefit packages signal to workers how employers view them.
Fortunately, I work at an organization that not only advances workers’ rights, but also uses these practices internally, including listing the pay range in job postings. Yet, I’ve constantly asked myself, “What about the other moms? The other women? The other families who don’t have this same experience? The other women wondering if this job is worth it?”
Passing HB 832 will ensure that all job seekers in Maryland have the information they need to negotiate fair wages.
