From the beginning of our credit union in 1935, we’ve been dedicated to helping women. In 2007, when financials were predominantly focused on men, we began focusing on women and their financial wellness. We recognized the financial challenges women face – lower wages than men, greater caregiving responsibilities and longer lives to name a few.
With these factors in place, women need to be even better than men at managing money, and that is where we could make a difference as a leader in financial education and empowerment. For years we have helped women along their journey to avoid poverty in retirement by building wealth and reducing stress supported by Summit products, services, education, and outreach designed to meet their needs.
When women succeed and have equal economic power, everyone benefits. Families, communities, businesses and economies thrive. So, we are taking on being a part of the solution for pay inequities for women, which create a wealth gap between genders and a higher poverty level for women in retirement.
It’s easy to think the issue of pay equity is too big or too difficult for us to influence. But let’s break it down. Pay inequity shows up in two distinct ways:
UNFAIR PAY FOR SIMILAR WORK: Believe it or not, most companies, Summit included, do well with this. Check out our dashboard. But there are ongoing factors contributing to this inequity that we can address:
- Avoid salary negotiation whenever possible. Men are more likely to negotiate for a higher salary than women, putting women behind from day one.
- While you can ask salary expectations to see if there would be a fit, we should not ask current salary. This only perpetuates inequities that may already exist and gives hiring companies the opportunity to lowball applicants. With women generally negotiating less than men, all else being equal, increasing a candidate’s current pay by 10% may start from a lower base and perpetuate the problem. This can be a problem for men too if they are starting from a lower base. Paying fairly needs to be for everyone, not just women. Be clear about what the job pays up front.
- Keep an eye on compa-ratio, a formula used by companies that look at equal pay. See our dashboard for more information about compa-ratio.
UNDERREPRESENTATION: Women are less likely to obtain high-paying positions in high-paying fields. This is the main reason women make $0.83 for every dollar a man makes. What are the contributing factors of underrepresentation?
- Many fields traditionally dominated by women, like caregiving, are undervalued and underpaid. We can reevaluate the value of that work and pay a higher wage for it, and we can encourage women to enter high-paying fields with education, scholarships, and other support.
- Representation of women in higher levels in companies is also a challenge. There are far fewer women CEOs and higher-level management.
- There’s a phenomenon I call the “Child Tax” that penalizes women and men for taking time off to raise and care for children or other dependents. The longer someone is away from the workforce, the more difficult reentry can be. Those taking time out of the workforce may have had a manager role when they left and not able to regain that level back in. Allowing for and even recruiting women looking to return to work is an important next step including recognizing their experience prior to taking time from the workforce.
We can help to close the gaps that exist. I’m excited for this next step in our journey toward Equity in Money™ for women.
Kim M. Sponem
President and CEO, Summit Credit Union