It’s true that 2022 has been a banner year for change in the workplace. With so many states enacting new laws requiring organizations to prove they harbor fair pay practices, it’s clear that we’re on the path to finally closing the pay gap.
Despite the utmost progress though, the World Economic Forum still predicts that at the current pace it will take another 132 years to achieve complete pay equity. That’s down only four years from its 2021 prediction.
It’s no secret that disparities between men and women still plague the workplace. And they grow exponentially when factors beyond gender are included. Race/ethnicity, age, sexual orientation, and even location all play a role in the magnitude of the pay gap. In this piece, we take a look at the different pay gaps and provide recommendations on how organizations can solve them this decade.
Stats paint a stark depiction
Pay gaps based on gender, race, ethnicity, sexual orientation, and age are pervasive. The overall pay gap between men and women, as of the beginning of this year, is 17.6%. In other words, women on average earn 82.4 cents on every dollar a man earns.
Below we dive into the pay gaps between women and men while accounting for race/ethnicity. Based on data reported by the Bureau of Labor Statistics:
Race/ethnicity pay gap
White women earn 17.7% less than their male counterparts
Black women earn 11.9% less than their male counterparts
Asian women earn 21.0% less than their male counterparts
It’s not reported on as often, but it’s still a huge issue in the workforce. Age discrimination is all too common. Below are some pay statistics for 2022.
Age pay gap
Men 35-44 years old were the highest median weekly earners, followed by men 45-54 and then 55-64
Women 35-44 years old were also the highest median weekly earners, followed by women 45-54
Women 16-24 earned 7.2% less than their male counterparts while women 55+ earned 22.7% less than their male counterparts
LBGTQ pay gap
A recent study conducted by the Human Rights Campaign found that Full-time LGBTQ+ workers earned about 10% less than typical workers as reported by the Bureau of Labor Statistics.
Other pay gap findings
Over the course of 2022, various studies have identified interesting findings relating to the pay gap, including:
The Equal Pay Act of 1963, and Title VII of the Civil Rights Act of 1964 sought to ensure equality in the workplace, including compensation. Over 60 years later, we still see significant wage disparities.
Laws like California’s SB 1162 will help curb pay discrimination in the workplace because they require employers to submit pay information on their employees, including details such as gender, race/ethnicity, job title, and median earnings. This type of reporting will help the state’s Civil Rights Department identify wage patterns and subsequent instances of pay discrimination.
Furthermore, this type of annual reporting will force employers to revisit their compensation practices more regularly and verify that they aren’t harboring pay discrimination. Pay data reporting is a proven method for ending discriminatory pay practices. A recent third-party study of the Equal Employment Opportunity Commission’s EEO-1 Component 2 pay data reporting collection confirmed this, as well as our own independent study.
Employers can take measures into their own hands to proactively address pay inequities before having to report them to government agencies.
Trusaic’s PayParity software analyzes worker compensation at the interaction of gender, race/ethnicity, age, and disability, giving compensation leaders the tools they need to eliminate pay disparities within their organization.
To learn how PayParity can help your organization address pay gaps and resolve pay disparities, book a demo with one of our pay equity experts below.
To see how the pay gap impacts an individual’s buying power, visit the Big Mac Pay Gap Index below:
Conducting a pay equity audit is a key component to ensuring equitable compensation within your organization. Just as important as the analysis is how you communicate findings and progress with various stakeholders. Download The Pay Equity Communications Planner to learn best practices for discussing compensation, both internally and externally.