Equal Pay Act Turns 60: The Long Road To Equality

For the majority of history, women have faced limited legal rights and fewer career opportunities compared to men. Society has emphasized wifehood and motherhood as a woman’s primary role and profession. However, in modern-day America, women are working more and earning more. In 2022, 16% of opposite-sex marriages had wives who were the sole or primary breadwinners, a significant increase from 50 years ago. Despite these advancements, women are still expected to bear the brunt of household duties and caretaking responsibilities (so lucky!). 

The Equal Pay Act of 1963 required equal wages for men and women doing equal work. The Civil Rights Act of 1964 prohibited discrimination against women by any company with 25 or more employees. A Presidential Executive Order in 1967 prohibited bias against women in hiring by federal government contractors. Translation: American women saw some major wins in the 60s. But while June 10 marks the 60-year anniversary of the passage of the Equal Pay Act of 1963, women are still getting shortchanged. And those cents quickly add up to major lifetime financial losses. Women who work full time and year-round are compensated only 84 cents for every dollar earned by our male counterparts. The significant earnings gap that women experience, leading to a median annual shortfall of $9,954, is equivalent to nearly six months’ worth of mortgage payments for the average American in a year. This disparity highlights the magnitude of the financial disadvantage women face, as it amounts to a substantial portion of our living expenses. It is crucial to acknowledge that although progress has been made in narrowing the gender wage gap, there is still work to be done.

Editor’s Note, from our friends at Payscale: The largest uncontrolled gender pay gap is for those with MBAs: Women with MBAs take home $0.77 for every dollar that men with MBAs take home, which is commensurate with last year. This may be indicative of women struggling to get jobs requiring — and compensating for — an MBA compared to men.

Wage Gap & Gender Equity in 2023

The gender wage gap exhibits variations across different age groups. Although younger women experience a relatively smaller wage gap compared to older women, the disparity begins as soon as women enter the labor force. Full-time, year-round female workers between the ages of 15 and 24 tend to earn about 87 cents for every dollar earned by their male counterparts. However, when considering both part-time and part-year workers within this age group, women typically earn 80 cents for every dollar earned by men. Unfortunately, Associate Professor at Brown University Banu Ozkazanc-Pan points out that the wage gap widens even further among older women. 

“Over time, this gap means that women will save less for retirement. In fact, recent data suggests that the median 401(k) balance for women is 65% less than those of men,” Professor Ozkazanc-Pan tells MBAchic. “Ultimately, women’s work is not being valued or remunerated equitably, furthering gaps in retirement.”

Full-time, year-round female workers between the ages of 45 and 64 typically earn only 79 cents for every dollar earned by their male counterparts. When including part-time and part-year workers within this age group, women typically earn 76 cents for every dollar earned by men.

Although some describe the current state of the gender wage gap as “relatively stable over the last 20 years,” that description is far too tame, according to Beth Bengtson, founder and CEO of Working for Women. 

“I’d say it is frustratingly stagnant,” Bengtson tells MBAchic. “At this point, the larger question is why our society still accepts this when 51% of the workforce is female. I think it’s worth noting that the quickest path to poverty in this country is being a woman with single moms leading the way. 1 in 8 women in the US lives in poverty and 46% of working women earn below $11 an hour.” 

The motherhood penalty that Bengtson points out is (unfortunately) alive and thriving. As MBAchic reported in 2022 when we highlighted Mom’s Equal Pay Day, mothers are perceived to be 12.1 percentage points less committed to their jobs than non-mothers, and beyond the implications of the social stigma, they’re financially punished for each child they have, too. Women face a 4 percent earning drop in hourly wages per child, whereas men receive a 6% wage increase for having children. 

For perspective, the pay gap was robbing moms of approximately $17,000 per year throughout the pandemic. On average, women employed in the United States lose a combined total of nearly $1.6 trillion every year due to the wage gap. These lost wages mean women and their families have less money to support themselves, save and invest for the future, and spend on goods and services. Women, their families, businesses, and the economy suffer as a result.

Marginalized Workers = Wider Wage Disparities 

Despite the existence of the Equal Pay Act, the pay gap is even wider for Black, Hispanic, and Native women of color, moms, and LGBTQIA+ workers. According to the U.S. Census, on average, Black women were paid 63% (or 63 cents on the dollar) of what non-Hispanic white men were paid in 2019. That means it takes the typical Black woman 19 months to be paid what the average white man takes home in 12 months. Data shows that Latinas, on average, were making 54 cents to every $1 made by white non-Hispanic men in 2022. The wage gap translates into an annual median loss of $22,692 for Black women, $29,724 for Latinas, and $28,797 for Native women. LGBTQ+ workers earn about 90 cents for every dollar that the typical worker earns according to a Human Rights Campaign analysis of nearly 7,000 full-time LGBTQ+ workers. LGBTQ+ people of color, transgender women and men and non-binary individuals earn even less when compared to the typical worker. These workers not only experience individual-level biases, such as pay, promotion and recognition but in many organizations, there is little to no support for parental leave. So what additional measures can be taken to address the specific needs of these groups?

Pay Transparency and Paid Leave

“This [gap] becomes further complicated for single parents who have to juggle family and work commitments while trying to progress professionally,” says Professor Ozkazanc-Pan. “[We need] Paid parental leave that is supported by managers and organizational leaders as well as changing social norms around caregiving – a tall order but one that is possible with supportive federal and state policies.”

While a lack of pay transparency creates a wage gap problem that persists throughout entire careers for many professional women, there has been some progress. Between 2017 and 2018, the Institute for Women’s Policy Research conducted a national survey on pay transparency. At that time, about half of all workers and 60% in the private sector reported that they were either discouraged or prohibited from discussing wage and salary information.

“Since then, state after state has taken legislative steps to bar employers from implementing these speech restrictions, and the issue has reached wide audiences in the nation’s media,” said Washington University in St. Louis professor Jake Rosenfeld. “Yet we find their presence remains incredibly common, and that state-level efforts to facilitate transparency in the workplace have generally failed.”

Even in states with pay secrecy bans, nearly one in 10 workers is formally barred from discussing pay, Rosenfeld’s research found.

Bengtson, who also believes the gap is further widened by the unpaid caregiving demands that still primarily fall on women, suggests a three-prong approach to address the specific problems that persist surrounding the pay gap. 

“We simply need to address our national caregiving crisis, and institute universal paid leave in this country while ensuring that women have opportunities and skills to enter career pathways that can support themselves and generate wealth,” she says.

Logical? Yes. Simple? Anything but. As equal rights advocates point out, there are some strides being made on local and federal scales, but the work is far from complete. 

Ready, Set, Legal Action

Although the Equal Pay Act was groundbreaking at the time, equal rights advocates have identified a plethora of obstacles women face in the decades since. Many now support the Paycheck Fairness Act which would make the Equal Pay Act a more effective legal tool. 

As a leading expert in civil rights, economic justice, and survivor justice policy, Deborah Vagins serves as the National Campaign Director for Equal Rights Advocates. Throughout her career she has co-led the national Paycheck Fairness Act coalition and the American Association of University Women’s fight against the Administration’s rollback of sexual assault and sexual harassment protections in schools. What needs to happen next, she tells MBAchic, is to get some of the transformative protections she’s spent her career fighting for codified into federal law so that protection no longer depends on administration preference or which zip code a woman happens to call home.

“The Paycheck Fairness Act amends the Equal Pay Act by ensuring that remedies for gender-based discrimination are on par with those for race and ethnicity-based discrimination,” Vagins explains. “Stronger penalties act as a deterrent for employers engaging in discriminatory practices. Additionally, the Paycheck Fairness Act addresses the broad interpretation of factors other than sex, which have often served as a proxy for sex-related considerations. It sets stricter criteria, requiring an important business justification if gender-based differences in pay are to be allowed. Furthermore, the act prohibits employers from using past salary history to determine future pay, preventing the perpetuation of discrimination across jobs.”

It also mandates data collection by the Equal Employment Opportunity Commission (EEOC), building upon previous efforts to collect pay data, which unfortunately faced obstacles during the Trump administration due to legal battles and lack of majority support from commissioners. Codifying data collection through the Paycheck Fairness Act would provide crucial insights into wage disparities in the workplace. 

Steps For Changemakers 

So, what role can organizations, policymakers, and individuals play in the fight to advance pay equity? There are some successful initiatives and strategies that show promise in narrowing the wage gap. Many experts suggest that the first step is a pay transparency commitment within organizations. 

“Organizations that have put that into action, starting with pay equity audits, have significantly reduced the gender wage gap,” says Bengtson. “One action we can each take is to learn about the pay transparency legislation efforts at your state level.”

Professor Ozkazanc-Pan echoes the importance of prioritizing a pay audit to see if there are differences across groups and individuals that are not warranted based on experience and skills. 

“Secondly, fostering an organizational culture that is inclusive and resilient to change to support inclusion must be prioritized by leadership,” Professor Ozkazanc-Pan goes on to explain. “Third, in the hiring, retention and promotion processes, ensure that women are held to the same standards as male counterparts, have supportive champions and mentors available to them, and ensure equal opportunities for advancement are not based on arbitrary or informal attributes, such as face time at work.”

While the gender pay gap continues to be a complex and multi-pronged issue with more than one solution, Vagins maintains that the solutions are attainable. 

“Every year, women are losing millions and millions of dollars because of these pay gaps that hurts everyone,” says Vagins. “It hurts their ability to pay for basic necessities, build wealth, it hurts their families, it hurts their futures. If we were to close the wage gap, it would cut poverty in the nation by one third.”

Closing the gender wage gap is not just a matter of fairness; it’s crucial for the economic security of women and their families. By ensuring equal pay, we can provide women with the financial stability they deserve and contribute to a more equitable society overall. If this anniversary sparks any enlightening moments in the hearts and minds of individuals, corporations, or legislators, it should serve as a reminder that after sixty years, the time has long passed to prioritize these efforts and build a future where women are truly and fairly compensated for their hard work and dedication.

“We can all make lots of great commitments but we need to be just as involved in taking action based on data and desired outcomes,” Professor Ozkazanc-Pan says in summary. “Inclusion is everyone’s responsibility and in order to end the gender pay gap, we must each do our part in creating shared accountability and taking steps as organizational leaders.”

For more on Equal Pay, read our coverage on the subject on MBAchic and listen to our 5QW episode with Katica Roy, gender economist and CEO of Pipeline Equity

Photo from Mapbox