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“Men are so often paid and compensated on the potential that they show, not necessarily what they’ve done… And women are so often paid on what they’ve actually done…” Megan Rapinoe, U.S. Women’s Soccer Team,  NPR Interview.

As issues of gender and racial inequality took center stage in 2020, leaders in leagues such as the NFL, NBA, and NWSL made headlines for their stances in support of movements pushing for a more just and equitable society. Names once known solely to sports fans soon became commonplace, with Rapinoe, James, and Kapernick speaking out in leagues owned predominantly by white men, with players overwhelmingly representing racial minorities

While protesting issues of racial injustice gathered steam in other American leagues, the World Cup Champion U.S. Women’s Soccer Team’s fight for pay equity shone a spotlight on the far-reaching problems of the U.S. gender wage gap. The U.S. Women’s Soccer Team (USWNT) earns just 89% of the men’s team’s compensation. This glaring disparity in compensation takes into account various pay negotiation structures, bonuses, and records of achievement; most notably, the U.S. Men’s Soccer Team failed to even qualify for the World Cup in 2018, in what was called “The Worst Loss In The history of U.S. Soccer.”

The USWNT filed a lawsuit alleging a Title VII violation against FIFA in March of 2019: a pay discrimination claim rejected by Judge R. Gary Klausner in May of this year. The USWNT agreed to settle a portion of their lawsuit recently, with part of the settlement addressing various disparities in the quality of hotel accommodations, venue selection, staffing, and travel. Still, the USWNT is intent on achieving pay parity: “There are tremendous obstacles to change [and] we know that it takes bravery and courage and perseverance to stand up to them,” said Molly Levinson, spokesperson for the players.

With support in the court of public opinion and a high-profile voice in Megan Rapinoe, the USWNT’s very public fight for equal compensation is far from over. More importantly, though, it showcases the emerging need for corporate responsibility – especially when it comes to pay equity issues –as an undeniable factor governing public perception, employee morale, and the bottom line. 

The Future of Pay Equity is Public Transparency

“A little public shame never hurt anybody.” – Megan Rapinoe

 In a connected age, public shaming has proven to be a go-to strategy for corporate accountability, spreading recently from the democratic pages of Twitter to the regulatory strategies of OSHA. Still, from an organizational viewpoint, bad PR is a costly means of compliance and negotiation. The sale of bad tranche securities contributing to the 2007-2008 housing bubble crash (and subsequent financial crisis) led financial giants Fannie Mae and Freddie Mac to be delisted from the New York Stock Exchange. Volkswagen’s stock plummeted in 2015 after it was revealed to be fraudulently reporting emission numbers. Recently, film sets that interfered with Covid testing in Los Angeles were swiftly shut due to public pressure, with the city opening a hotline to report businesses violating Covid-19 guidelines

 Experts are beginning to recognize that this type of corporate short-termism is a costly problem, and when it encourages regulatory non-compliance and pay inequity, the result is an erosion of public trust and investor goodwill. Conversely, transparency in pay data reporting and equity initiatives encourages public perceptions of social responsibility, and is an increasingly important factor for recruiting top talent

 Pay Equity is Inevitable

In the last few years, high-profile changes to the pay parity landscape like the passage of SB 973 in California, The Massachusetts Equal Pay Act, The Canadian Pay Equity Act, and an incoming US President with an agenda targeting pay inequality has helped support the gender wage gap as germane to the national conversation — an unavoidable factor in every labor sector from frontline workers to Hollywood stars. At the same time, gender wage gap deniers are more likely to be profiled in Psychology Today than Forbes or Fortune 500. The damages filed against FIFA by the USWNT would reportedly be enough to bankrupt the league if awarded, showing that avoiding pay equity issues might help boost quarterly earnings — but almost always result in later penalties. Proactive compliance is the best insurance policy in an era where regulatory referees are prone to issue a red card: and public opinion mirrors the French crowd cheering after the Women’s World Cup Victory in 2019 “Equal pay, equal pay!”

Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.