Why the Latina Equal Pay problem persists, and how to make progress

Latina Equal Pay Day

December 8th marks Latina Equal Pay Day (#LatinaEqualPayDay) — a day signifying that Latinas on average must work nearly 22 months to earn what white men earn in 12. That’s right, almost two years to earn what a white male counterpart earns in one. If that’s not hard enough to process, consider that last year, Latina Equal Pay Day was recognized on October 21. No need to do a double-take on today’s date. It has in fact been pushed back well over a month later this year. 

So, why have disparities widened rather than narrowed in the past year? What can organizations do to improve the outlook for Latina women, and why are some Latinas still telling MBAchic that despite the disheartening data, they’re still choosing to feel hopeful?

Why the wage gap worsened for this group

In 2020 the average Latina made 57 cents to a white man’s dollar. According to the National Women’s Law Center, this means she would have to work until she is 90 years old to make the same amount of money a white man would have made by the time he turned 60. Data shows that goalposts are being pushed even further out of reach, with Latinas, on average, making 54 cents to every $1 made by white non-Hispanic men in 2022. 

It’s been well-established that the pandemic pushed many women into part-time and seasonal jobs or out of the workforce altogether. Among them, Latinas were more likely than any other group to leave their jobs during the pandemic, in many cases to take care of children or family members. By August 2022, 32% of non-employed Latinas reported they had left a job due to childcare issues, compared with 20% of all women. Even two years later, this situation prevents many from returning to work according to a UCLA Latino Policy and Politics Institute report.

In addition to certain cultural household expectations, the analysis attributes Latinas’ disproportionate exit from the workforce to several other factors. At the start of the pandemic, Latinas generally lacked access to jobs that could be done from home, making them the women least likely to have worked remotely over the past few years. While the majority of occupations in which Latinas work were more vulnerable to job losses throughout the pandemic, implicit and explicit bias continues to drive discrimination against Latina women (and other women of color), further devaluing their labor and narrowing their professional advancement opportunities. 

The U.S. Department of Labor produced a new report this year on women’s employment impacts during the pandemic and the role of occupational segregation. It finds that segregation by industry and occupation cost Black women an estimated $39.3 billion, and Hispanic women an estimated $46.7 billion, in lower wages compared to white men in 2019.

Based on today’s wage gap, Latinas will miss out on over a million dollars throughout a 40-year career.

How Corporate America can shrink the wage gap

So, how can Latina Equal Pay Day move beyond a conversation and evoke real change? There are steps every company can take to create more equitable opportunities for everyone, including Latina women. By focusing on a few effective strategies, marketplace progress can be made, organizations can attract top talent, and diverse employee representation at all levels (including within the C-suite) can be achieved. 

  1. Refine DEI efforts

Research has shown that diverse organizations have better performance, reduced staff turnover, and lowered absenteeism costs. But a company’s “why” should ultimately be defined by its people, not its bottom line. If Latina women cannot see themselves reflected within leadership, what kind of picture does that paint for their professional future and individual career expectations? Corporate leaders should set aside time with the HR department to reflect on which DEI efforts work, and what must be reimagined to create real inclusivity and increase opportunities, specifically for women of color. 

Moneda Moves podcast host Lyanne Alfaro who covers Latinos, business, and financial news says creating a truly diverse workforce starts with developing diverse leadership. 

Focus on not just making diverse hires within your company, but also providing a clear path to promotion and becoming a leader in the company,” Alfaro says. 

“Additionally, now that companies are leaning further into DEI, make sure the company has a system to reward and promote employees who help advance DEI within the company.” 

When addressing the wage gap, President of Equal Pay Group, Gabriela Taveras says it’s important for organizations to consider the double wage gap contingent on gender and ethnicity and the triple wage gap which includes gender, ethnicity, and sexual orientation. One way to promote equal opportunity? Conduct a pay equity analysis. 

“Improving internal diversity begins with improving employee morale and in turn hopefully loyalty,” Taveras explains. 

By conducting a pay equity analysis on an annual to ongoing basis, Taveras says corporations present evidence that leadership is willing to consistently audit and uphold itself to a standard of integrity where who you are and what you are compensated do not correlate.

“This becomes important when organizations decide to be bold enough to thoughtfully embrace the intersectional individual identities of their current talent pool. Your best promoters are your employees because it’s their lived experiences that matter to new hires.”

Noreen Farrell, Executive Director of Equal Rights Advocates and Chair of the Equal Pay Today Campaign works to support employers who are addressing pay disparities. She suggests that companies should assess the diversity of leadership teams and examine the characteristics and demographics of those who are being promoted as well as those who are not. 

“There are both cultural and structural steps that can be taken to make these roles more accessible,” Farrell explains. 

“Hire a third-party reviewer to have honest discussions with your employees and to conduct other forms of research to determine the specific barriers that your Latinx employees face. Discern whether bias affects performance evaluation or opportunities for advancement. Be transparent about problems and set bold progress goals.” 

Another forward-thinking strategy companies are implementing? To hold managers accountable for promotion and pay equity, some companies are including DEI effort evaluations within manager performance. Are individual managers adhering to objective factors guiding hiring, evaluation, and promotion of all employees, or falling short? By repeatedly rewarding those who meet diversity and equity goals, it will become a priority that’s baked into company culture.

  1. Build a culture of belonging

Feeling like a valuable team player is the first step to creating a culture of belonging in any workplace. When Latinas or any underrepresented group lack the resources for career advancement and collaboration, it can be nearly impossible to create a sense of connection. 

Director for the Women’s Bureau in the Department of Labor, Wendy Chun-Hoon, tells MBAchic that there are effective culture-building steps every business can start implementing now. Corporations can begin to address the wage gap Latina women face by creating pipelines within their organizations for women to enter higher-paying positions and advance in their careers.   

“Reduce caregiver penalties by expanding access to paid job-protected leave and onsite childcare, pay employees a living wage, provide employees with mentors, create Employee Resource Groups [and] discourage anti-union activities,” Chun-Hoon suggests.

Also known as affinity groups, employee resource groups (ERGs) can allow employees to build a community, have discussions about meaningful topics, and share resources.

“Employee resource groups who provide a space for belonging and tools to help employees prepare for promotions in a comfortable environment are important functions within a company to help promote a diverse environment,” suggests Alfaro. 

  1. Attract and hire Latino talent

According to the U.S. Bureau of Labor Statistics, Hispanics will comprise 20 percent of the workforce by 2024. Six out of 10 Hispanics are millennials or younger, and the median age is 28, six years younger than the median in the country. Translation? If your company hasn’t already figured it out, this talent pool plays a critical role in developing and shaping the current and future workforce. 

Chun-Hoon says to attract and retain Latino talent, executives can start by promoting transparent pay practices, banning salary history inquiries, and following a few other basic principles to create a sustainable company culture. 

“All employers can help promote greater equity, and help prevent the effects of gender and racial pay discrimination from snowballing over the course of a career, by not asking job applicants about their earnings history, and not basing pay on what a worker was paid at their last job,” adds Chun-Hoon. 

Farrell says Corporate America can be more visible in promoting pay equity for Latina workers by first participating in conversations, and then implementing policy change.  

“They should lead their industries by implementing progressive pay policies and sharing their best practices,” says Farrell. 

Why the Latina Equal Pay problem persists, and how to make progress

“They should take steps to promote Latinas and other qualified women into positions of leadership with higher paid salaries. Corporate America also should join the many high-road employers who publicly support legislative reform raising the minimum wage and strengthening pay equity laws.”

Further, Farrell points out that high-road companies across the country are taking it a step further by publicly disclosing pay gap information and setting goals to close these gaps. By tracking the median pay gap across a company, leaders can see whether Latinas and other women are disproportionately segregated in the lowest-paid jobs and correct course. 

“More equitable workplaces for Latina workers will also require paid family and sick leave and reasonable pregnancy accommodations so that Latina workers do not have to choose between their jobs and their families,” adds Farrell. 

Additionally, careful attention should be paid to equitable recruitment, hiring, training, and promotion practices helping Latinas and others thrive and advance professionally.

Despite challenges, hope grows 

Despite the disheartening data surrounding pay inequity, many Latina women continue to share feelings of encouragement and hope. The biggest source of inspiration? The innovative and resourceful women within their own communities. 

“Latina-owned small businesses are the fastest-growing segment of the business community in the U.S., and additionally have proven to be among the most resilient,” reflects Alfaro. 

“This is despite the fact that funding is slim for Latina founders to date and that we are emerging from an economically damaging pandemic. I think there’s a lot of hope and potential for our cohort in the future. Funding, sponsorship, and community support will supercharge this cohort.”

And while Chun-Hoon describes the gender and racial pay gaps as both real and problematic, she points out several specific funding pathways The Women’s Bureau is helping to create for Latina women to enter into higher paying jobs. The Women in Apprenticeship and Nontraditional Occupations (WANTO) grant helps to recruit, train, and retain more women in quality pre/registered apprenticeship programs while the Fostering Access, Rights and Equity (FARE) grant helps women understand and exercise their workplace rights. 

Farrell points out that Latinas are leading the nation as workers, consumers, and thought leaders. 

“Companies across the country are joining with advocates to ensure they are paid equally and promoted into the highest-paid jobs. The blueprint for progress exists,” she says. 

Taveras describes how like other Afro-Latinas, she has struggled to juggle both identities as a Black woman and a Latinx daughter of immigrants. But she says she is witnessing an exciting shift spread within her Boston community. 

“I am thrilled to see that there are more of us coming to the forefront of the conversation and challenging topics/narratives our parents couldn’t because of the language barrier,” says Taveras.

”I truly believe my generation will be able to achieve milestones or ancestors couldn’t have imagined from “la finca” and that feels like an honor, privilege, and responsibility.”

Laura Chavolla, Founder of Mexican Artisan Products, tells MBAchic that while Latinas continue to face hurdles and adversity, she feels proud of her community. As a businesswoman, she advises others to wear two traits with honor: self-assertion and fearlessness. 

“I feel honored to see a business growing and being owned by one of us. Latin women are entrepreneurial, powerful, and fearless. We can create castles out of nowhere,” says Chavolla. 

“It is important to not give up, whether it is your business or other women’s business. There is a place where you can go to determine what your vision is and what you aspire to be.”

Latina Equal Pay Day
Why the Latina Equal Pay problem persists, and how to make progress

Photo by Amy Hirschi

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