Are companies overpaying white men?
It’s not a rhetorical question. Massachusetts passed an equal pay law in 2016 aimed at closing the gender wage gap. So far the opposite has happened.
Census data indicates the gap has widened by two cents since the law took effect with women in Massachusetts making 81 cents for every dollar a man takes home. Another data set of 250 employers, collected by the Boston Women’s Workforce Council, found an even bigger chasm: In 2021, women on average were paid 70 cents for every dollar a man earns, down from 77 cents when the council issued its first report in 2016.
There could be many reasons, but some advocates are pointing to a chief provision of that 2016 equal pay law, which prohibited employers from asking job candidates about salary history. The thinking was that women’s wages are historically lower than men’s, so asking about previous pay may perpetuate their lower salaries.
Instead employers began asking a different question: What are your salary expectations? You can guess what happened next. White male candidates tended to overestimate their earning power, while women and people of color underestimated.
“Companies are overpaying for white male talent because white men are putting out larger salary expectations and getting it, especially in a war for talent like we have right now,” explained Megan Driscoll, who founded and ran life sciences staffing firm PharmaLogics Recruiting.
Driscoll, who now runs her own consulting firm, said the legislation originally included a provision requiring companies to show a salary range with job postings. That got scuttled during negotiations, and it’s something she’s hoping lawmakers will bring back in a bill on Beacon Hill this session designed to strengthen the equal pay statute.
Posting a range – $80,000 to $100,000 for a project manager, for instance – can prevent the inequities that have arisen when men and women are left to pull a number out of the air.
“It was a good first step,” Driscoll said of the 2016 ban on discussing salary history. “But it was never really meant to be a standalone because it really needed that wage range.”
Salary transparency not only helps with prospective hires, but also current employees who, under the proposed legislation, can ask their employer for pay ranges for their own job. This is a big deal because the current law focuses on people switching jobs, but the vast majority of workers stay in the same job.
For instance: If an employee makes $82,000 and learns that the salary range for his or her position is between $80,000 and $100,000, that employee can then ask how to earn more, perhaps taking on new responsibilities or learning new skills.
“What we know is that women and people of color are often earning within the range [but] they’re at the bottom of the range,” said Driscoll. “This part of the bill would immediately help women and people of color in the state.”
Driscoll began pushing for a fix from Beacon Hill in 2019, but the legislation got shelved because of the pandemic. Then last year, former lieutenant governor Evelyn Murphy, who has devoted the past two decades to closing the gender wage gap, began advocating for another change: a mandate that organizations with more than 100 employees publicly report pay data by gender and race. The current law only encourages companies to conduct internal reviews to detect pay disparities.
On Beacon Hill, the two fixes got merged into one piece of legislation, Senate Bill 2721, dubbed the Frances Perkins Workplace Equity Act, named after the Boston native who served as labor secretary to President Franklin D. Roosevelt and helped craft the New Deal. She was also the first woman to be appointed to a Cabinet post.
Murphy told me she’s frustrated by the lack of progress on women’s wages. She thought she had the answers back in 2005 after writing the book, “Getting Even: Why Women Don’t Get Paid Like Men and What To Do About It.” That led Murphy to organize salary negotiation workshops for women around the country.
“I thought I really understood what it would take, and it was largely around fixing women,” said Murphy.
But eight years ago, when then-Mayor Marty Walsh appointed Murphy to cochair the Boston Women’s Workforce Council, she saw the wage gap from the employer side. The council works with about 250 employers to report gender and racial wage gap data on an aggregate basis. These companies together have about 156,000 workers, or roughly 14 percent of the Greater Boston workforce.
The hope was that what gets measured, gets done. After nearly a decade of data, the wage gap persists. According to the council’s most recent report, which includes a large sampling of big employers, men averaged $121,859, while women made $85,041. Add in performance bonuses and the gap grows even larger.
“The lesson of the workforce council is that even those employers who are deliberately trying to move this needle are not doing it in a way that is as impactful and that it actually creates measurable progress,” said Murphy. “Therefore, we need to go a step further and have transparency at the employer level.”
Instead of creating a new system to report gender and racial wage data, the legislation requires that employers with more than 100 workers simply make public a document they already file each year with the US Equal Employment Opportunity Commission. Disclosing such data might spur progress, because companies don’t want to be seen as being laggards in pay equity.
With only a few weeks left in the session, the bill, which was reported favorably out of committee, is stuck in Senate Ways and Means. A broad coalition of labor, nonprofit, social justice, and women’s groups, as well as the offices of the attorney general and state treasurer, support the legislation.
As for the major business groups, well, that’s complicated. In 2016, the Associated Industries of Massachusetts, Greater Boston Chamber of Commerce, and the Alliance for Business Leadership came together to support the equal pay bill. Their support was key to getting the measure — versions of which had been filed for nearly 20 years — over the hump.
This time, only the Alliance for Business Leadership, the more progressive trade group, backs the new version. The chamber, in an e-mail, is mum about its position. AIM said it is committed to workplace equity but has concerns about the current draft, in particular about its impact on small businesses.
Brooke Thomson, AIM’s executive vice president of government affairs, in a statement said: “We have been and will continue to work with our members on this issue and we are committed to finding pathways to consensus.”
Jennifer Benson, president of the Alliance for Business Leadership and a former state representative, said the equal pay law is a good example of “legislative intent and how it hasn’t translated into practice.”
That’s why the alliance is pushing for an update. “Our intent was to solve this issue,” she added. “So how do we get back to the table and actually solve this issue?”
For way too long, women have been underpaid. It’s time for Beacon Hill to finish the job in closing the wage gap.
Shirley Leung is a Business columnist. She can be reached at firstname.lastname@example.org.