As published in the Wisconsin State Journal on March 12, 2023.
Equal Pay Day on Tuesday reminds us of the increasing challenges facing our state and nation in ending pay inequality between men and women. As a community known for championing women, Greater Madison can lead the way to progress.
In Wisconsin, women earn 80 cents for every $1 earned by men, according to the Institute for Women’s Policy Research. It estimates that at the current rate, women in Wisconsin will not receive equal pay until 2067.
Nationally, women working full time earn 83 cents for every $1 earned by men, according to the most current U.S. Bureau of Labor Statistics data.
And for women of color, Black women earn an average of 64 cents for every $1 men are paid, and Hispanic women earn 57 cents for every $1 paid to men, the U.S. Department of Labor reports.
A Pew Research Center study showed that the pay gap did not significantly improve during the past 15 years, primarily because women remain significantly underrepresented in higher-paying jobs.
Women are more likely to work at lower-paying jobs in undervalued women-dominated fields. This leads to fewer women in leadership roles or on paid boards of directors.
Often, women take on roles as caretakers for elders and children, requiring them to come in and out of the paid workforce. When they come back, they can be offered lower pay and reduced responsibilities. In addition, when women enter or reenter the workforce, they tend to ask for less money than their male counterparts and, according to the Harvard Business Review, they are far less likely to negotiate an offer.
Starting at even 3% less pay in the same position as a man, women can face a large financial disadvantage over time. The problem compounds itself, creating less money for retirement and the need to work longer to make up the difference.
Throughout a 40-year career, a typical American woman loses out on $500,000 due to the pay gap. As a result, 43% of retired women now live below the poverty level, the U.S. Labor Department reports.
Women experience what McKinsey & Co. calls the “broken rung” when they climb the corporate career ladder. For every 100 American men who are promoted from entry-level roles to manager positions, only 87 women are promoted, according to its 2021 Women in Workplace study. The result is that men significantly outnumber women at the manager level, and women struggle to catch up.
These revelations and good business reasons prompt many American companies to initiate programs to encourage pay equality. The C-suite knows from study after study that a healthy organization with a variety of perspectives, experiences and leadership styles consistently outperforms competitors with homogeneous leadership teams.
Yet while women now make up about 50% of the nation’s corporate employees, only about a quarter reach the ranks of senior vice president or the C-suite. Not enough management women are in the pipeline to fill half of the top leadership openings.
Summit Credit Union launched a campaign this year called Equity in Money to accelerate women’s success in reaching pay equity by addressing their educational needs required for higher-paying jobs and their progress in building wealth for a comfortable retirement.
We also recently started tracking our pay equity progress with a pay transparency dashboard. To ensure that female job candidates do not fall behind their male colleagues, Summit is committed to:
- Avoiding salary negotiations, because women tend not to negotiate for higher starting salaries, and they fall behind in earnings from day one of employment.
- No longer asking for current salary from potential candidates to eliminate already established inequities for women and to discourage inadvertently low-balling new employees.
- Recognizing women’s work experience before they take leave for family care when we consider them for open positions.
- Working on scholarship and loan programs to support pay equity.
I encourage all leaders to think about implementing a pay equity policy and reviewing compensation levels throughout their companies to ensure fairness. I am confident that Madison’s deep roots in the cooperative movement and its consistent national rankings as a great place to live and work will lead us to a new era of pay equity as we work together and lead the nation.
