Can employer asking a prospective employee about their salary history perpetuate the gender pay gap? Lawmakers across the country are starting to say, “Yes.” Bills have been introduced in 25 states and the District of Columbia that would prohibit employers from asking interviewees about their current pay during the interview process. Proponents of these measures say that when employers have this information, they can use it as justification to offer new hires lower-than-desired compensation packages. For women and people of color who are already earning less, this can perpetuate discrimination.
Women currently earn about eighty cents for every a dollar a man earns. While some of this difference may be attributable to differences in their careers – women tend to be better educated, but work in lower-paying professions and spend more time out of the workforce to care for family – a sizeable portion of the gap is directly attributable to gender discrimination.
A study from the American Academy of University Women highlights how the early the wage gap starts, even when men and women have the same educational backgrounds and experiences. One year after college graduation, researchers found men earned an average of $42,918 while women earned $35,296. And this gap isn’t fully attributable to field of study. Men who majored in business earned an average of $45,000 right after graduation, while women who did earned $38,000.
When men and women start of on unequal footing, pay based on previous salary can further perpetuate this gap. Let’s take our two business majors for example, calling them Sally and Ted, and track their pay over their careers.
In their first jobs, Sally is making $38,000 and Ted is making $45,000. They are both happy with their salaries for the first three years after graduation, and then decide it’s time to make a change. While interviewing, they are asked about their current pay and answer honestly. They both get the jobs and are each offered 20 percent more than what they are currently being paid. Now Sally is making $45,600, and Ted is making $54,000. Now instead of making $7,000 more than Sally, he is making $8,400 more.
Over the next ten years, Sally and Ted climb the ranks at their companies and receive a five percent raise each year. Sally is now making $74,277 and Ted is making $87,960 – nearly $14,000 more than Sally. A seemingly small difference in pay in their first jobs is now twice as large midway through their careers. Lawmakers hope to address this growing disparity at least in part through banning previous employers from asking about salary history.
While there has been a flurry of support for such bills in state legislatures, some critics say it is yet to be determined if they will reduce the pay gap in actuality. Massachusetts and California became the first states to pass such legislation last year, and New York City followed suit. It will be several years before the effects of these bills can be measured to see if they can address the wage gap in actuality and not just in theory.
But for mothers, such legislation may have an added bonus.
Working mothers earn just 71 cents for every dollar that working fathers earn. With a larger gap than working women without children have to contend with, working mothers who are looking to switch jobs may be even more penalized if they are paid based on previous earnings.
For women who have taken time out of the workforce to care for children, questions about salary history can create an added challenge when returning to work. After a significant period of time away, a mother quoting her previous salary may not receive an inflation-adjusted increase. For example, if she was earning $40,000 a year in 2007 when she quit her job to stay-at-home, ten years later in 2017 that salary would be the equivalent of over $47,000.
Women who stay-at-home also often spend a significant amount of time contributing to their communities and honing skills through volunteer work. Many hiring experts view volunteer experience as valuable as paid work, especially if the applicant had a significant role, like planning large events or acting as an organization’s president. These additional skills a mother may have developed while staying at home would not be reflected in previous salary history.
So what can you do if an employer asks about your salary history? Experts recommend using the favorite trick of politicians – answering the question you wish you were asked, not the one that you were. Strategies to avoid answering the question include telling the interviewer your current employer considers that information confidential, or that you only discuss such information with your accountant. If you do end up disclosing your previous pay, emphasize that you are looking for an increase in both responsibility and compensation.
While it may be sometime before we know if banning employers from disclosing salary history can help close the wage gap, proponents of these bills are hopeful that they can help reduce the compounding impact of gender discrimination early in one’s careers. For working mothers, such protections might prove to be especially beneficial.