Why Pay Equity Matters

People performing similar job functions should receive equal pay — regardless of their gender, ethnicity, or any other factor. In other words, there should be comparable worth or equal pay for jobs of equal value. 

Too often, however, that is not the case. Studies have shown that male healthcare workers are paid more than female healthcare workers — even when they have the exact same title. Male teachers are paid more than female teachers — even when they have the exact same job. This is a pattern that holds across nearly every industry and profession. 

Fairness issues aside, here are some other reasons why pay equity matters. 

Productivity and Morale Issues

If you want morale to take a nosedive, let the women in your organization find out that their male counterparts are making more money for the exact same jobs. For years, organizations have avoided this by making salary discussions taboo. Disclosing your salary to a co-worker used to be grounds for dismissal. That’s illegal today. 

Moreover, with the advent of social media, discussions about pay can now be had across a much broader spectrum — openly. Do you really want to take the chance that your female employees will discover they’re being underpaid?

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Legal Concerns

Discrimination lawsuits regarding pay issues are becoming more and more commonplace. And they’re difficult to defend against when you’ve been underpaying an entire subset of your workforce.  

What’s more, it’s a federal offense.

The Equal Pay Act requires men and women to be paid the same for equal work. And an individual filing a complaint needn’t file an EEOC charge before going to court. In other words, filing a complaint against an employer for violating the Equal Pay Act can be a pretty simple process. 

Better Employee Retention

People are more likely to stay in jobs and perform well when they feel appreciated and appropriately compensated. Companies with a reputation for fairness and equitable treatment are more attractive to today’s workers. 

Making a public commitment to equitable employee compensation and making it transparent for all to see will go a long way toward attracting top talent. Moreover, it will engender a strong degree of loyalty among the people who work for your company.

Social Benefits

Because women are paid less, they have less disposable income. This impacts the overall economy in a negative fashion. Henry Ford was famous for ensuring his workers were paid well enough to afford buying one of his cars. 

A similar attitude would serve you well too.

The gender pay gap means that women are more likely to endure poverty in retirement, after having been underpaid throughout their careers. In fact, nearly twice as many women aged 65 or over live in poverty than men of the same age. The men were paid better over the course of their careers so they could afford to invest more for their retirement. What’s more, their Social Security benefit is higher as well. 

Children raised by single moms are also more likely to live in poverty because of the pay gap. These women also have more trouble purchasing homes and sending their children to college. This drags our society down as a whole, contributing to higher dropout rates, more crime and higher incarceration rates.  

These are but a few of the many reasons pay equity matters. As you can see, perpetuating the gender pay gap is problematic from an ethical, social, and legal standpoint. It also debilitates the performance of your organization, ultimately hamstringing your profitability, ability to attract strong candidates and hold on to existing employees.