Transparency, regulation and policy to fight gender pay gap

Author Moonshot.news

Published on: 23/05/2023

Company policies and regulation are vital for workplace diversity, equity and inclusion efforts (DEI). EU’s new pay transparency law alone does not solve the gender pay gap but transparency can decrease employers’ power to set wages and make it easier for workers to identify and act against pay discrimination, three female professors write in a blog post. A new US survey shows that majorities of staffers who work in companies with active DEI measures say they had a positive impact.

 56% of employees say that focusing on increasing DEI at work is a good thing, according to a new Pew Research Center US survey. But opinions about DEI vary considerably along demographic and political lines.

The three academics write that EU’s new rules won’t tackle the complex drivers of the gender pay gap alone. But by focusing on both pay transparency, as well as enforcement mechanisms, the EU’s new law is a powerful step forward to combat pay inequality between men and women.

The Pew survey shows most workers have some experience with DEI measures at their workplace. 61% say their company or organization has policies that ensure fairness in hiring, pay or promotions, and 52% say they have trainings or meetings on DEI at work. Smaller shares say their workplace has a staff member who promotes DEI (33%), that their workplace offers salary transparency (30%), and that it has affinity groups or employee resource groups based on a shared identity (26%).

 Majorities of those who have access to these measures say each has had a positive impact where they work, the survey shows.

THE EU GAP

“Even though 90% of Europeans think it’s unacceptable for women to be paid less than men, the average EU gender pay gap remained close to 13% in 2021. And there has been only a 4 percentage point decrease over the previous decade. This is despite the EU encouraging member states to implement legislation and policies to improve gender pay equality for decades”, Sara Benedi Lahuerta, assistant professor in law at University College Dublin, Katharina Miller, adjunct professor at IE University, Madrid and Laura Carlson, professor in law, Stockholm University, write in their blog post at World Economic Forum.

“Fortunately, a new EU pay transparency directive, adopted in April, will help to close this gap further. But even with this new law, this will not be an easy task. It will mean overcoming some significant drivers of wage inequality between men and women, including unconscious bias and stereotyping, differences in negotiation tactics and even new technology such as artificial intelligence.”

They write that fears are growing that the use of AI technologies to shortlist job applicants will only deepen the gap since they may be biased towards male applicants.

SOCIAL RIGHTS

“The right to equal pay has been recognised by EU law since 1957. And although eliminating the gender pay gap is not formally required by EU law, reducing it is part of the “European pillar of social rights” (pillar 2), a priority in the EU 2020-2025 gender equality strategy, and part of the United Nations’ sustainable development goals to be achieved by 2030.”

The academics argue that the new EU law will help workers or jobseekers better understand their position in the wider pay structure of a company or industry. 

“It also includes collective measures to ensure employers share aggregated pay data broken down by gender, both internally and publicly.”

Among the directive’s individual measures is the right for workers to obtain pay information about other workers doing equal work from an employer. 

TAKE ACTION

“This helps people take action if their right to equal pay is not respected by their company”, they write. “During recruitment, job candidates also have a right to be informed about pay levels they can expect at the position they are applying for. The directive also ensures their right not to be asked about their pay history. This aims to help overcome gender biases and ensure more equitable pay negotiations.”

“These new rules won’t tackle the complex drivers of the gender pay gap alone. But by focusing on both pay transparency, as well as enforcement mechanisms, the EU’s new directive is a powerful step forward to combat pay inequality between men and women”, the three academics write in their blog post.

Pew Research says its survey comes at a time when DEI efforts are facing some backlash and many major companies are laying off their DEI professionals.

Key findings from the Pew survey:

• Relatively small shares of workers place a lot of importance on diversity at their workplace. About three-in-ten say it is extremely or very important to them to work somewhere with a mix of employees of different races and ethnicities (32%) or ages (28%). Roughly a quarter say the same about having a workplace with about an equal mix of men and women (26%) and 18% say this about a mix of employees of different sexual orientations.
• More than half of workers (54%) say their company or organization pays about the right amount of attention to increasing DEI. Smaller shares say their company or organization pays too much (14%) or too little attention (15%), and 17% say they’re not sure. Black workers are more likely than those in other racial and ethnic groups to say their employer pays too little attention to increasing DEI. They’re also among the most likely to say focusing on DEI at work is a good thing (78% of Black workers say this), while White workers are the least likely to express this view (47%).
• Women are more likely than men to value DEI at work. About six-in-ten women (61%) say focusing on increasing DEI at work is a good thing, compared with half of men. And larger shares of women than men say it’s extremely or very important to them to work at a place that is diverse when it comes to gender, race and ethnicity, age, and sexual orientation.
• There are wide partisan differences in views of workplace DEI. Most Democratic and Democratic-leaning workers (78%) say focusing on DEI at work is a good thing, compared with 30% of Republicans and Republican leaners. Democrats are also far more likely than Republicans to value different aspects of diversity. And by wide margins, higher shares of Democrats than Republicans say the policies and resources related to DEI available at their workplace have had a positive impact.
• Half of workers say it’s extremely or very important to them to work somewhere that is accessible for people with physical disabilities. About three-in-ten workers (29%) say this is somewhat important to them, and 21% say it’s not too or not at all important. A majority of workers (76% among those who do not work fully remotely) say their workplace is at least somewhat accessible for people with physical disabilities.
• Many say being a man or being White is an advantage where they work. The survey asked respondents whether a person’s gender, race or ethnicity makes it easier or harder to be successful where they work. Shares ranging from 45% to 57% say these traits make it neither easier nor harder. But far more say being a man and being White makes it easier than say it makes it harder for someone to be successful. Conversely, by double-digit margins, more say being a woman, being Black or being Hispanic makes it harder than say it makes it easier to be successful where they work.