Episode 124: Fair Pay, part 2: Transparency Matters

Show transcript:

Welcome to The Broad Experience, the show about women, the workplace, and success. I’m Ashley Milne-Tyte.

This time, part two of our show on women and pay.

“You know people often don’t enjoy this conversation and they hope their employer will just give them a nice raise without them having to raise it.”

In the first show we talked about the origins of the pay gap – in the US at least it starts at the age of 14. Yasemin Besen-Cassino and I discussed the fact that even that most common of teenage jobs, babysitting, pays boys more than girls.

And we met Lydia Frank from Payscale.com, which works with employers and employees on all things compensation.

So to dive back in with Lydia on the topic of pay transparency, I wanted to know if this whole code of silence around what people earn – is that gonna go away in an era when young women in particular seem less willing to put up with the status quo at work?

“I’d say millennials especially, younger generations, have way different expectations around transparency than previous generations. Historically it has been you don’t talk about these things, you don’t ask somebody about what they make, it’s rude, right? It’s impolite. But I think we’ve raised a generation of people to question authority and have taught them to be independent thinkers, raised them in the age of the internet. When you can get access to anything, you can ask Google any question. It’s a different world and there’s a different expectation for the types of data and information that should be available and at your fingertips.”

That said, employers haven’t necessarily caught up. Payscale does a lot of surveys and in a recent one on employers…

“We actually saw that more of them were targeting higher transparency, but we saw when we specifically dug in around pay equity that very few of them, I think 30 something percent, were planning to do any kind of pay equity study.”

So they seem like they’re not really looking at their own houses too carefully…if they’re not willing to research how they pay women and minorities. And by the way in the US there are different equal pay days for women of different races. So today – the day I’m releasing this show – it’s April 10th, which is all women’s equal pay day. But Asian women’s equal pay day actually occurs in February because their pay gap is smaller and African-American and Latinas’ equal pay days come in August and November respectively. Because their pay gaps are much bigger than that overall gap.

Lydia says more companies would do well to talk to employees and job candidates about how they pay, why various positions command certain salaries…and how they compare to the market rate…

“Those things can come to light whether you’re being more transparent and sharing pay ranges for example, or it can come to light as employees start to be more transparent with eachother.”

And as a company, you might want to concentrate on the former – foster trust and open up. Lydia says sometimes employees’ desire to uncover the truth can create awkwardness…

“You know, employees creating a spreadsheet and putting everybody’s salary data on it to share data, while well intentioned, there might be real reasons that people are paid differently in the same job. Whether it’s years of experience or different locations, there are legitimate reasons that have to do with labor markets and talent markets that employers might be paying two people differently…”

I went to the US Equal Employment Opportunity Commission’s website to read more about the Equal Pay Act. And sure enough the text states that men and women must be paid equally for equal work BUT there’s also a line that reads: "Pay differentials are permitted when they are based on seniority, merit, quantity or quality of production, or a factor other than sex. These are known as "affirmative defenses" and it is the employer's burden to prove that they apply."

Now it seems to me there’s a lot of leeway there, a lot of possible factors that an employer could claim were the reason they’re paying a man more than a woman doing the same job, for example. But they do have to prove to the person who asks that one or more of those is the reason why that other person is better paid. 

Lydia says if a company chooses to stay quiet about its pay practices there’s not much managers can do to stop employees asking around about what their colleagues earn…

“From a legal perspective in the US, you can’t actually discourage employees from talking to eachother about pay – if they come and ask you what someone else makes you don’t have to tell them but you can’t tell them not to ask that person.”

Still, I know from hearing from some of you that many managers do not relish the idea of employees talking to eachother about pay. And they don’t take kindly to being probed on this stuff themselves—especially if you’re asking why you’re paid less than a co-worker. It makes them uncomfortable and often defensive.

But being more open about pay – even if it’s just publishing pay ranges for different positions -  could benefit everyone. Because it turns out more of us think we’re underpaid than actually are. In a 2015 survey Payscale found most people quit a job over compensation – they want more money and are convinced they’re underpaid. But when they dug in, they found just under half of those people who said they were underpaid actually were earning less than their peers in similar roles.

Lydia says as a company you don’t have to suddenly start publishing everyone’s salary for all to see. But at least start sharing salary ranges.

“Giving employees some idea of what that range is and where they fall in that range definitely helps them understand more where they stand essentially. And I think that’s what people are looking for, is just to get a sense of why they’re paid the way they’re paid and how that compares to others doing similar work.”

And she says as an employee, before you jump to conclusions about why you’re paid less than someone else in the same job…

“…I think it’s worth asking questions, to say hey I just want to understand better, I know this person is making more than I’m making, can you help me understand how I can get to that level. Is there something in his background or skill set I could work on…was the market different when you hired him versus me? That can happen too with companies, depending on how the market is looking for a job when they hire a new person they may end up paying that person more than existing workers, and not think about adjusting that pay for existing workers. But I think it’s perfectly fair for existing workers to poke a bit and say hey, I’ve been keeping on top of the value of my position in the market and it seems like it’s really gone up and I’d just like to have a conversation about my compensation.”

So there’s transparency at individual companies, and there’s transparency on a wider scale. Early this year Iceland introduced a law that puts the onus on employers to pay men and women fairly for the same work – and to prove they’re doing it. It seems to be the first of its kind in the world. Here’s a bit more detail from the website Nordic Information on Gender:

"[T]he employer must determine which work tasks each position entails and then assign a value. The salary must be decided based on the position and not the person carrying out the work. The idea is that this will eliminate salary discrimination.

And every three years Icelandic firms have to show the government that they’re paying men and women equally for equal work – or they could get fined.

I made a call to Iceland to find out more about hopes for the new law, and I spoke to a longtime expert on women’s lives. She told me Iceland has had a strong women’s movement for more than 100 years. I’ll let her introduce herself because my Icelandic is a little spotty.

“Thorgerdur Einarsdottir, and I’m a professor of gender studies at the University of Iceland.”

 Thorgerdur points out that like a lot of other countries, Iceland has had an equal pay law for decades. It just hasn’t worked. It went into effect in 1961…

“The parliamentarians were so optimistic back then they believed it would take 6 years to eliminate the gender pay gap. So they gave the employers 6 years to fulfill the requirements of the law.”

So politicians thought by 1967 there would be no gender pay gap. Of course it’s never gone away.

This new law on equal pay – where employers have to prove they’re doing it rather than women fighting to get it - was first proposed several years ago but passed last year, when 48% of those in parliament were women.

I asked Thorgerdur about the relationship between men and women in Iceland. Would most men – even in private – say they’re on board with the law? Are they true believers in gender equality?

“Yes, I think the majority of men in Iceland would say they agree with this and they’re for gender equality. Not all would claim to be feminists but that group is growing, certainly. And that depends on many things…for example, the long standing women’s movement in Iceland has been very visible. We’ve had these women’s days off, you might have heard of, in 1975 the first time.”

On October 24th 1975 90 percent of women in Iceland went on strike for a day – it became known as the women’s day off. They stopped doing housework, tending to their kids, and working at their jobs – they wanted to show how valuable women’s work IS and protest unequal pay between men and women. As a result, many industries all but shut down – flights didn’t take off because flight attendants weren’t at work, many schools closed, newspapers weren’t printed. Men had to take their kids to work – and sausages reportedly sold out at the shops as dads clamored for an easy dinner. 

On the same day in 2016 women walked out of their jobs at 2.38p.m. – to protest an average 30% pay gap between men and women.

“So I think men in Iceland are used to the claims of women and accept it and support it to a certain extent. But at the same time we’ve had a rather polarized debate in Iceland. The public debate has been rather polarized. Maybe that’s because of the strong women’s movement. You mobilize the resistance when women raise their voices.”

Many employers have complained the new law puts too big a burden on them. And it does require work: they have to analyze positions, record a lot of data.

Thorgerdur says this law is a start – it provides employers with a toolkit to make setting wages more transparent.

But she says here’s the problem. So many women in Iceland – as in other countries – work in areas dominated by women, like nursing or teaching. Areas that pay less simply because they’ve long been seen as women’s work. In other words the pay structure reflects gender bias.  

“The new law does not require that we re-evaluate job classification systems, per se.”

So she says it won’t do anything to help all those nurses and teachers and retail workers whose jobs pay less because theirs is a female-dominated profession.

“I don’t want to be too pessimistic, it’s just that we can see the shortcomings and it depends on how it will be applied. So we’re only starting this process.”

She is beginning a joint research project on just how the new gender pay law will pan out and how it’ll compare with pay equality laws in other Scandinavian countries.

But as in all things to do with women and pay…so much of it goes deeper than official mandates. We talked about this in the first part of this show, but pay is often related to how the world sees men and women and their roles. And how elastic both sexes are willing to be about those roles. Thorgerdur says it’s not just gendered jobs. Take the parental leave situation in Iceland, for example. Like some other Scandinavian countries, Iceland insists that both halves of a couple take a set portion of leave…

“We have nine months altogether, three for the mother, three for the father and three which they can share, and the mother takes more or less six months for example.”

So the man in a heterosexual couple almost never takes more than the 3 months he has to take. He’s back to work as soon as he can. The woman usually takes the shared quota all on her own.

“So you can see from that we still have the same traditional gender relations as in other countries.”

She says it’s these stereotypes about who does what that need to change to allow for greater equality.

To end the show I want to come back to the topic of negotiation, which we touched on in part one.

I asked Lydia Frank to comment on something I’ve seen women express in opinion pieces and heard some of my listeners talk about as well.

Which is this: why should women have to negotiate at all to get paid what they deserve? If it’s known women often find negotiating uncomfortable – and that we may harm our standing in the other person’s eyes by asking for more money…why should we be put in a position where we are going to be disadvantaged? Where a man will often do better than us? Why can’t organizations just name a price per position – just as the new Icelandic law states – and not budge from that? This will be your salary and there’s no wiggle room. Lydia says Ellen Pao had a non-negotiation policy when she was CEO of Reddit. And Pao admitted that part of it was about evening the playing field for women.

But Lydia isn’t sure banning negotiation is a good idea. 

In some ways I favor it, in some ways I think you want to ensure the employees feel empowered to argue for more compensation in terms of the value they bring to the organization. So you don’t want to like shut that down completely because that then puts all the trust in an organization that they’re always gonna do the right thing by their employees. And I don’t think that’s the case. You hope most will, but you’ve seen plenty of cases especially around the #MeToo campaign you mentioned earlier, that organizations knew about bad behavior and did not protect employees in the way they should have. So I hate the idea of taking away that power to negotiate from any individual.”

She says we should treat negotiation like a discipline.

“…and make sure you’re staying on top of your market value and understanding what it is and how it’s changing over time. People often don’t enjoy this conversation and hope their organization is gonna give them a nice raise without them having to raise it. But if you don’t actively manage your earning potential in the way you actively manage your budget or your finances, it’s not necessarily going to just manage itself in a way that is gonna lead to your best potential earning potential.”

And I mentioned this during the first part of this show but if you’re interested in an episode on negotiation please hit me up. I’ll do it if I hear from enough of you.

And just as I was putting the finishing touches on this show a listener sent me a piece of good news out of Washington DC – a US federal appeals court just ruled that employers can’t use previous salary to justify paying a man more than a woman. This is a step forward because so often women go into a new job coming from a lower salary than their male colleagues in the same job and employers have been able to say, but we used her previous salary to decide what to offer her. That is no longer allowed.

That’s The Broad Experience for this time. Thanks to Thorgerdur Einarsdottir and Lydia Frank for being my guests on this show.

I’m always open to feedback – you can find me on Twitter at ashleymilnetyte – without the hyphen, on email via the website or just hit reply on the bi-monthly newsletter if you get that. you can sign up for it at TheBroadExperience.com.

Talking of women and pay, thanks so much to those of you have donated to this one-woman show in the last few weeks. If you’d like to join them just head to the support tab at TheBroadExperience.com

I’m Ashley Milne-Tyte. Thanks for listening.