New York City Council passed legislation this month barring employers from asking job seekers how much they earned at their last jobs.
The bill represents what equal pay advocates say is a growing trend that could help shrink the gender wage gap, which hits women of color the hardest. Latinas in New York City earn 46 cents, Black women earn 55 cents, and Asian women 63 cents for every dollar paid to white men, according to a recent report. White women earn 84 cents for every dollar a white man makes.
“Being underpaid once should not condemn one to a lifetime of inequity,” said New York City Public Advocate Letitia James, who introduced the bill, which will affect 3.8 million public and private-sector workers in the city.
Last summer, Massachusetts became the first state to enact bipartisan legislation to bar employers from asking about salary history. Hiring managers must base their offer on the prospective employee’s value to the company.
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“These are things that don’t just affect one job; it keeps women’s wages down over their entire lifetime,” said state Sen. Pat Jehlen (D-Somerville), one of the Massachusetts bill’s co-sponsors, in the New York Times.
Puerto Rico and Philadelphia followed suit last month, prohibiting questions about salary history. Pittsburgh, San Francisco, the District of Columbia, and 20 states are now floating similar measures, according to the National Women’s Law Center. New York State, New York City, and New Orleans have barred questions about salary history in government jobs through executive orders.
“This has become a fast-moving trend across the country,” said Maya Raghu, director of workplace equality and senior counsel with the National Women’s Law Center. “People saw that this type of provision could be successful.”
Women make up nearly half of the workforce, and half of households with children younger than 18 have a woman as the breadwinner. Yet women make an average of 78 cents for every dollar men earn, according the the U.S. Department of Labor. Nearly 60 percent of working women would get a pay hike if they earned the same as men with similar work hours and education, according to a report released this month by the Institute for Women’s Policy Research.
In nearly every occupation, women’s median earnings trail men’s median pay, even in professions where the mix of men and women is relatively equal. The job with the worst gender wage gap is financial advisor, where women’s weekly earnings were only 55.6 percent of men’s.
Over a 40-year career, the wage gap typically costs Black women $840,040 in lost earnings, Native women $934,240, and Latinas more than $1 million compared to white men, according to the National Women’s Law Center.
Equal-pay advocates explain that the wage gap gets baked in over a lifetime because a worker’s salary and raises are typically based on a percentage of their compensation. Female workers, whose earnings trail their male counterparts as early as one year out of college, face a challenge in catching up to men’s earnings. Older workers, too, may get passed over by employers because their prior salaries are considered too high.
“I think that it’s something that people have experienced, so they understand the impact [salary history] can have,” Raghu told Rewire.
The federal Paycheck Fairness Act, which U.S. Sen. Patty Murray (D-WA) re-introduced this month, included a new provision barring questions about salary history, Raghu told Rewire. The bill prohibits employers from retaliating against workers for discussing salaries with colleagues.
Federal law prohibits gender pay discrimination for the same or similar work. But the law can be difficult to enforce without greater transparency around what men and women with similar education and experience earn in the same occupations, explained Ariane Hegewisch, employment and earnings program director with the Institute for Women’s Policy Research.
“We have discrimination in the labor market, right, we know that,” Hegewisch told Rewire. “Straight out of college, you already have a five percent wage gap. If you always just give a percentage [salary] increase, the gap between the person who starts at a lower level and a higher level just grows and grows and grows.”
She said barring salary questions should make pay more “performance based and rational.” But employers, she added, need to be more transparent about pay. She said line managers and supervisors need to explain in clear terms to workers the performance necessary to earn raises and promotions.
“If you can’t prepare, it’s a big black box, and it often leaves out women,” she said.