The High Cost of Low Transparency

April 8, 2013This year, Equal Pay Day is Tuesday, April 9th—99 days into 2013 and women’s earnings are just equaling men’s 2012 earnings. What’s wrong with this picture? Everything. Shouldn’t every day be Equal Pay Day?

The Equal Pay Act of 1963 made it illegal for employers in the United States to pay women and men different wages for the same type of work. Yet:

  • Women earned only 80.9 percent of what men earned in 2012.
  • NPR reported in February 2013 that the biggest gap is faced by women insurance sales agents, who earn only 62.5 cents for every dollar their male peers earn. The smallest gap is for women pharmacists, who make 99.6 cents on the male dollar.
  • According to the Bureau of Labor Statistics, African-American women earn 68 cents and Hispanic women earn only 59 cents for every dollar white, non-Hispanic men earn. So gender pay equity would also address pay inequities specific to women of color.

Why, fifty years after the landmark Equal Pay Act, does the gender pay gap persist?

One significant reason is a lack of transparency. Few employees have access to their employers’ pay scales. It’s hard to demand equal pay if you don’t know what your (male) coworkers are earning.

As Victoria Budson, Executive Director of the Women and Public Policy Program at the Harvard Kennedy School of Government, told The Boston Globe in December 2012, “The less transparency in the process and the less clarity, the larger the pay disparity.”

How do we bring transparency to the process?

One solution is the Paycheck Fairness Act, currently under consideration in Congress, which, among other provisions, would increase transparency by requiring employers to prove that pay disparity is related to job performance and penalizing employers who retaliate against workers for sharing salary information.

Another is to take matters into your own hands by consulting free online salary databases like and, to get a better idea of what others in your field and position are earning. Armed with information, you can knowledgeably discuss compensation with co-workers and HR and ask for an analysis of compensation at your company by position, level, gender, and race/ethnicity. Catalyst research finds that, across the board, high potential women are paid less than their male peers from day one, and the gap never closes. Smart companies rectify such problems as soon as they come to light.

When women are paid less just because they are women, the implication is that they are worth less. This implicit assumption leads in turn to gender gaps in opportunity and leadership. It’s a vicious cycle. A little transparency could go a long way towards breaking this cycle.

What’s the price of the gender pay gap? Over the span of a 40-year career, women in the United States have been estimated to lose an average of $431,000 to pay inequities. That’s a lot of money—money that could be spent on groceries, housing, clothing, cars, healthcare, education, and everything else that powers our economy. Equal pay for women would propel economic growth as well as family well-being.

If every day were Equal Pay Day, we’d all benefit—women, families, communities, and economies. What’s wrong with that picture? Nothing.

The views expressed herein are solely those of the guest blogger and do not necessarily reflect those of Catalyst. Catalyst does not endorse any political candidates. The post and the comments are presented only for the purpose of informing the public.