Black Women’s Equal Pay Day took place on Aug. 3. The day marks how much longer the average Black, full-time working woman must work to earn what the average white man earns in a year’s time. In other words, Black women’s Equal Pay Day signifies that a black woman must work an extra eight months to earn what a white man does in 12 months. 

This day of recognition brings to light another sobering reality of America in 2021: the wage gap will generally cost a Black woman nearly $1 million dollars over the course of her career.

While the gender pay gap affects people of all races, it’s compounded for women of color, who experience gender and racial discrimination. According to ACS census data, Black women make $0.63 to every dollar non-Hispanic white men make. This is even wider than the overall gender pay gap, which stands at $0.82 and only examines comparisons on the basis of gender.

A report released by the National Women’s Law Center (NWLC) finds women in America face significant barriers to employment, health, and overall well-being. If action is not taken to rectify gender and racial pay gaps, the impacts could ricochet for generations to come.

Below we’ve outlined NWLC’s findings and what employers should note about the role they can play in advancing racial/gender equality and pay equity.

What did the NWLC report find?

The NWLC report puts the pay gap into practical terms with a grave example: “Assuming a Black woman and her white, non-Hispanic male counterpart both begin work at age 20, the wage gap means a Black woman would have to work until she is 83 years old to be paid what a white, non-Hispanic man has been paid by age 60.2.” 

This unjust reality has serious implications for Black women in all realms of life. According to the report, Black women are not projected to reach equal pay until the year 2130. The report also finds that COVID-19 has disproportionately affected Black women, who have worked on the front lines of the pandemic, but face higher levels of unemployment and economic insecurity.

The unemployment rate for Black women peaked at 16.6% in May 2020, and although it has since improved, is still higher when compared to other races. The pandemic has also worsened economic insecurity, particularly for Black mothers, who are more likely than mothers of other races or ethnicities to be the primary household provider for their families.

In addition to calls to expand access to health coverage, affordable childcare, and paid family and medical leave, the report proposes a variety of legislative solutions to close the wage gap and improve the quality of life for Black women, including:

  • Support policies that expand and strengthen federal and state unemployment insurance programs
  • Bolster equal pay laws
  • Increase the wages of women in low-paid jobs by raising the minimum wage
  • Protect workers’ ability to join unions and collectively bargain

Some of these solutions are already underway. Equal pay laws, for example, are developing in states across the country and worldwide. Illinois, with its SB 1480, California’s SB 973, and New Jersey’s Diane B. Allen Equal Pay Act are some of the states leading the way in pay data reporting requirements. Requiring employers to take action to annually report on employee earnings is a proven process for identifying and correcting pay disparities.

Employers outside of these jurisdictions can still play a critical role in closing the gender and racial pay gap.

An opportunity to close the gap

NWLC’s findings underscore the dire need for progress when it comes to advancing pay equity and fairness for Black women in this country. Organizations not currently required to submit annual employee compensation information as required by state laws are encouraged to become part of the solution by undergoing a pay equity audit. You can get started by downloading our white paper, Designing a Successful Pay Equity Policy for Your Organization.

Employer action in this area is not only for the common good – shareholders and prospective employees are increasingly gauging organizations’ commitment to diversity, equity, and inclusion (DEI) when it comes to deciding where to invest or work. Soon, solid evidence of DEI efforts will be required of organizations, as DEI pledges to commitment will not be good enough — actionable reporting will be necessary for demonstrating real progress. Being proactive will prove to be mutually beneficial for employers and employees alike.

Employers have an array of pay equity solutions available to address racial and gender pay gaps. Starting off with a proactive pay equity audit is a good first step to identify where gaps may exist so they can be remedied.

If your organization needs assistance achieving its DEI goals, contact us to learn about our ongoing monthly DEI platform and consultative solution, PayParity.