We are 99 days into 2018, and today marks the day the average woman has earned what it only took a man until December 31st to earn. At the current rate, the gender pay gap is not expected to close until 2059. Depending on the studies you read, economists and think tanks issue lots of proclamations about the reason the pay gap exists. From the mommy penalty to unconscious bias, it can be difficult to find consensus on the root cause. One thing most economists can agree on is that it is in the economic best interest of our country to to actively address inequities in pay.
According to a 2017 study by the Institute for Women’s Policy, “the United States economy would have produced additional income of $512.6 billion if women received equal pay; this represents 2.8 percent of 2016 gross domestic product (GDP).” Not only that, but the poverty rate for all working women would be cut in half. Pay parity represents 16 times what the federal and state governments spent on families in need in 2015. That means if women earned the same as men, the government would pay out less and families would have much more, a win/win for everyone.
There are many things we can do to close the pay gap, starting with transparency in pay rates and a ban on using prior earnings as a negotiating point for salary. A partnership between the Equal Employment Opportunity Commission and the US Department of Labor issued a rule to take effect in September of 2017 requiring companies with 100 employees to start disclosing how much people are paid when they report on gender, race and ethnicity. In June of 2017, Trump reversed that rule. Despite being introduced in every congress since 1997, the Paycheck Fairness Act has yet to pass. Women can negotiate with the best of the boys and will still suffer the gender pay gap as long as there is a lack of transparency in what employers are actually paying their people.
