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Layoffs narrow gender pay gap, but equity battle continues

The gender pay equity gap improved a little in the second quarter, but the results stem from recent layoffs, especially among women in hospitality and retail industries.

In the second quarter of 2020, women made 84% of what men made, a narrowing of the wage gap that hasn't been seen since 1979, according to U.S. labor data. But the news is far from good for women.

The decline in the gender wage gap is the result of job losses, especially among women, said Elise Gould, a senior economist at the Economic Policy Institute in Washington D.C. She sees it as an anomaly and the result of the pandemic's labor market impact.

Until the most recent labor data, the pay gap ranged from 80% to 82% in recent years.

"Women lost more jobs, particularly lower-wage jobs," Gould said. Women occupy a lot of jobs in hospitality and retail. "The earnings of those left behind will be higher," she said.

Gender pay equity is an ongoing battle with lawmakers and in courts. It's an international issue as well, and one that may be creating a need for analytical HR tools.

The French Gender Equality Index is a new law adopted in late 2018 requiring firms to achieve gender pay equity. Firms have to show progress over time. The law allows a penalty of up to 1% of an employer's annual payroll for firms that don't improve.

Women lost more jobs, particularly lower-wage jobs.
Elise GouldSenior economist, Economic Policy Institute

The law tracks not only workforce demographics and wage data, but metrics such as promotions and age groups to see if there is a problem with diversity by age, among other data points, said Euclides Marin, director of solution engineering at Nakisa Inc., a maker of organizational design and lease accounting products in Montreal.

The Nakisa Hanelly insight analytics platform can import data collected by HR systems from a variety of vendors to provide these workforce details. But it is also adding functionality specific to the French market so that companies can meet the law's reporting requirements. That functionality is due to be released in the next several months.

The French law has no comparison in the U.S., said Roberta Guise, founder and president of FemResources Inc., a San Francisco-based nonprofit that wants to establish gender equality in the tech workforce.

The closest the U.S. comes is the Equal Pay Act, which Congress approved in 1963. But that law included loopholes in favor of employers, such as the ability to ask for salary history, Guise said.

Salary history keeps pay low

Asking about salary history "alone sets women back from their first day on the job -- their earnings will lag those of male counterparts for the balance of their careers," Guise said.

Salary history bans have been adopted in more than a dozen states, including California and New York.

In the U.S., gender pay equity is also an issue in courts.

Google, for instance, is being accused in a lawsuit by four former female employees of underpaying women for similar work. It also accuses the firm of promoting women more slowly.

The plaintiffs filed on July 21 for class action status in San Francisco Superior Court, claiming more than 10,800 women may be potential members of the suit.

Google "paid women in the same positions (called job codes) as men, on average, approximately $1,894 less per year in base salary, bonus, and stock than those similarly-situated men," the lawsuit contended. 

Google disputes the lawsuit. "Every year, we run a rigorous pay equity analysis to make sure salaries, bonuses and equity awards are fair," Eileen Naughton, vice president of people operations at Google, said in a statement. "If we find any differences in proposed pay, including between men and women, we make upward adjustments. Last year, we made upward adjustments for 2% of employees, across every demographic category, totaling $5.1 million."

"The claims in this lawsuit are unfounded and we plan to defend our policies and practices," Naughton said.

Meanwhile, the federal government is collecting data on pay, race, ethnicity and gender from any firm with more than 100 employees to uncover pay discrimination. That data collection, which was proposed during former President Barack Obama's term in office, is due to be completed Sept. 30. President Donald Trump's administration tried to block the data collection effort but failed in court.

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