One City Takes a Giant Step for Equal Pay

By: Martha Burk
Money Editor, Ms. magazine; national gender pay equity consultant, Director, Corporate Accountability Project, National Council of Women’s Organizations

Too often when Albuquerque, New Mexico, makes headlines, it’s bad news — a police department under scrutiny by the Justice Department, or a seemingly unsolvable homeless problem. But recently the city made news for something good — especially good for women. Initiated by Mayor Richard Berry, the Albuquerque City Council unanimously passed a strong gender pay equity initiative that is the first of its kind in the nation (full disclosure — the mayor’s task force was headed by yours truly).

We all know by now that the gender pay gap between women and men is 22 percent nationwide for full-time, year round work. According to the Institute for Women’s Policy Research in Washington, on average women earn less than men in virtually every single occupation for which there is sufficient earnings data to calculate an earnings ratio. What’s more, the gap is not closing — it’s been that way for over a decade. Begging and shaming employers hasn’t helped, and the Supreme Court has all but eliminated legal remedies.

So Albuquerque decided to do something different. Contractors will now be required to 2014-04-01-yourvoicesmallest3.JPGsubmit data on what they pay women and what they pay men by job classification as a condition of bidding for taxpayer dollars. Nobody’s salary on a bulletin board, but statistics that show percentage pay gaps for a given job category. And the data will be public.

If contractors hit specified benchmarks, initially a discrepancy of 10% or less, they’ll be rewarded with extra credit on the bid. Well, you might ask, why allow even 10%? Shouldn’t the pay gap between women and men doing the same work be zero? Of course it should, unless there are other factors such as time on the job or extra certification that come into play. So all other things being equal, zero is the goal.

But the plain truth is, most employers are so far from parity a zero tolerance policy would just discourage them from even trying to fix pay gaps. We know it’s not unusual for companies to have gaps in the 30-40 percent range — so an allowable variance of 10% or less is actually a high bar in the early stages of implementation. With pay gaps so stubborn female workers have grown gray waiting, it’s clear that fixing the problem won’t be instant.

And that’s the point — fixing the problem. If employers can be incentivized to hit a target of 10% this year, the requirement can be revisited next year, until they eventually approach that magic number zero. When competitors see they’re losing out by shortchanging women — or men, the ordinance applies to both — they ought to be motivated to catch up. If they can’t, or don’t want to try, then they don’t deserve our tax dollars.

Besides, there are obvious benefits to employers. Research clearly shows that better pay results in less employee turnover, and further shows that replacing an employee very often costs more than a raise in compensation. When employers are viewed as treating workers fairly, the public is more likely to view them favorably and do business with them. And don’t forget that federal law prohibits discrimination in pay based on sex or race. A public reporting requirement will motivate employers to review their own compensation practices, and remedy any potential problems before they become serious enough for legal action.

It would be easy to say “sure, but Albuquerque is a small town, and this couldn’t be done in much larger cities with hundreds of contractors.” Not true. Albuquerque is comparable in size to Miami, Atlanta, Denver, Baltimore, Milwaukee, Kansas City, and Omaha. Larger cities such as Boston are instituting some voluntary measures to close the gender pay gap, and the topic is under serious discussion in New York, Phoenix, San Francisco, and elsewhere.

Let’s hope it’s the start of a trend. It’s not only about time. It’s about real money in the pockets of families.