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28 Major Companies Sign On To The White House’s Equal Pay Pledge

President Obama signing executive orders addressing equal pay in 2014 CREDIT: AP PHOTO/SUSAN WALSH
President Obama signing executive orders addressing equal pay in 2014 CREDIT: AP PHOTO/SUSAN WALSH

The White House is holding an event focusing on women’s issues on Tuesday, and as part of the day-long summit it announced actions it is taking to try and reduce the gap in pay between men and women.

One brand new step is calling on private sector companies to make a promise that they will look at their own internal gender wage gaps. Any company that signs up for this “White House Equal Pay Pledge” agrees to conduct an analysis of pay by gender across its entire workforce, review its own hiring and promotion practices to reduce bias, and include equal pay in overall efforts to promote equality within its own ranks, as well as look for any other practices that can ensure women are paid equally with men.

The pledge already has a number of high-profile companies signing on out the gate, from industries ranging from technology to consumer products. There are 28 signatories so far, among them Amazon, American Airlines, Dow Chemical, Gap Inc., Johnson & Johnson, L’Oréal USA, PepsiCo, and Staples.

“The pledge is to actually take action,” Tina Tchen, executive director for the White House’s Council on Women and Girls, told the Wall Street Journal.

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While the pledge doesn’t explicitly call for companies to erase any unfair gender wage gaps they might turn up, the process itself could help to chip away at the overall disparity — which ends up meaning that the average woman who works full time, year round earns 79 percent of what a man does. That’s because salary transparency helps close the wage gap.

In the public sector and unionized workplaces, where pay scales are likely to be standardized and accessible to employees, the gender wage gap is much smaller and has actually been shrinking while the overall gap has stagnated. Yet about half of Americans say they are discouraged or banned from discussing pay with their coworkers, making it difficult for women and other marginalized groups to root out discriminatory pay. The company-wide analyses required of businesses that make the pledge can bring discrimination to light.http://thinkprogress.org/economy/2014/05/01/3433335/pay-equity-gender-wage-gap/ Conducting regular analyses of pay gaps also helps lift the burden from individual women to identify and address any discriminatory pay practices they may be experiencing, which requires time, money, and putting a relationship with an employer on the line. In the 1970s and 80s, state governments turned to pay equity, or ensuring that women are paid the same as men when they do similar work in different jobs. To figure out if women were being unfairly paid less, they conducted annual assessments of their pay practices and then compensated women for any gaps, lifting their wages by a collective $527 million.

Allowing companies to conduct their own analyses could also mean, however, that they report questionable results. Both Gap and Amazon have already analyzed their employees’ pay and claim they don’t have any gender wage gaps. Yet at Amazon, for instance, saying men and women in the exact same roles earn the same money elides the fact that the highest-paid employees are nearly all men.

Meanwhile, voluntary pledges only go so far, as many companies can simply choose not to participate. On Tuesday, the Department of Labor will also release a finalized rule updating gender discrimination regulations for federal contractors and subcontractors, the first update in more than 40 years. Originally proposed by the department in early 2015, it brings the requirements government contractors must follow into line with laws and court decisions since they were first put forward in 1970 about pay discrimination, sexual harassment, providing accommodations so that pregnant employees can keep working, and discrimination based on family caregiving status and/or gender identity. While the rule can only reach people who work for government contractors, those number in the hundreds of thousands.

President Obama has previously released other executive orders that can help boost women’s pay when they work for government contractors, including banning salary secrecy, requiring paid sick days, increasing minimum wages, and banning discrimination based on gender identity and sexual orientation. He also issued an executive order that requires all companies with 100 or more employees to report their pay scales broken down by gender, race, and ethnicity to the Equal Employment Opportunity Commission.

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And the first bill he signed into law as president had to do with the gender wage gap: the Lilly Ledbetter Fair Pay Act, which gave women more time to bring lawsuits against their employers over unequal pay. Yet the wage gap has only narrowed by two cents in the intervening time.