Sunlight, it’s said, is the best disinfectant. When injustice is publicized and becomes well-known, change can happen for the better. Pay inequity, unfortunately, stands as an exception to this aphorism. Despite increasing focus, the racial and gender pay gap persists. We are committed to keep shining a light on this glaring issue until it’s resolved.
Take the problem of gender pay inequity. By different measures, women are still paid less than men, This inequity exists even when assessing relative pay for comparable jobs. But a more illuminating way to look at the injustice is via the so-called uncontrolled pay gap, which shows that the median pay of women is 83 cents for each dollar earned by men. This metric is so powerful because it reveals the extent to which society denies women access to better-paying jobs.
In the aftermath of the Dobbs decision, which reversed Roe vs. Wade, these inequalities are even more staggering: Women bear the cost of companies slashing parental leave benefits at what could not be a worse time. Hulu, for example, slashed its paid extended leave from twenty weeks to eight. These policies disproportionately harm women who are unable to access care themselves due to location and socioeconomic status.
The statistics on racial pay inequality are even more sobering. Black workers, for example, only earn 64 cents for each dollar earned by white workers. And when intersectionality is considered, the inequities grow even more: Latina women, according to a Department of Labor report, only make 57 cents for every dollar paid to white, non-Hispanic men.
Pay inequity is morally wrong. Equal work should merit equal pay, regardless of gender or race and neither race nor gender should dictate access to higher paying jobs. But pay equity is not only a moral necessity, but an economic one. The Economic Gains from Equity study in 2021 has estimated, for example, that income inequity cost the U.S. economy $22.9 trillion over the past 30 years.
The pay gap also harms corporate performance, so it really ought to be top of mind for investors. In 2018, the consulting giant McKinsey found that companies with the greatest gender balance in their executive ranks were 21% more likely to outperform those with less gender equality. Meanwhile, companies with racial diversity were 33% more likely to outperform less diverse firms.
As change-minded investors, we will continue to campaign for the gender and racial pay gaps to close, and for women to have reproductive support in the workplace. In addition to speaking out about this important topic, we will support laws that mandate pay transparency, and prevent companies from retaliating against employees who disclose what they earn.
Finally—and perhaps most importantly—we won’t let up when it comes to asking companies to disclose median pay statistics for employees and calling attention to policies that disproportionately affect women in the workforce. Many companies like to hide this information, preferring instead to only publish data on how much women and visible minorities are paid compared to men for the same job. That’s only a part of the story—and not the most telling part. It’s only with median pay data that we can truly see who is given opportunity to succeed and rise through the ranks, and who is being held down.