Race and Economy

How salary history bans can raise wages for female and Black workers

Meghan McCarty Carino Jul 8, 2020
Heard on: Marketplace
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Salary history bans make it illegal for an employer to ask a prospective employee about their past compensation. iStock/Getty Images
Race and Economy

How salary history bans can raise wages for female and Black workers

Meghan McCarty Carino Jul 8, 2020
Salary history bans make it illegal for an employer to ask a prospective employee about their past compensation. iStock/Getty Images
HTML EMBED:
COPY

Two years after Emily Martin graduated from law school, she began clerking for a federal judge. She started at the same time as another clerk who was just one year out of law school.

“But because he had worked for a high-paying law firm while I had worked for a low-paying public interest organization, he made significantly more money than me for the exact same job and less experience,” she said.

Martin is now Vice President for education and workplace justice at the National Women’s Law Center, advocating for laws that prevent employers from asking about previous pay.

More than 20 local governments and 19 states have passed such bans as a tool to address stubborn pay gaps for women and people of color. Women still make, on average, just 81 cents for every dollar a man makes for similar work, and the discrepancy is even bigger between white men and Black and Hispanic men and women.

New research shows evidence that the salary history laws are working.

“It kind of blew us away,” said James Bessen, the executive director of the Technology & Policy Research Initiative at Boston University School of Law. “It’s a big difference.”

His team compared the wage gains of workers changing jobs in certain counties of Massachusetts, which bans salary history questions, with workers in neighboring counties in states that allow such questions. They found all workers benefited to a degree, but women and Black workers benefited most. Women earned 8% to 9% more, and Black workers 13% to 16% more, than similar workers in neighboring states.

“What it says is that a lot of that persistent wage gap — it’s related to something about the bargaining process,” Bessen said. “I may not be at all discriminatory, my company may not be discriminatory, but I’m perpetuating discrimination.”

As many companies move to address equity in the workplace with splashy initiatives and grand pronouncements, something as small as eliminating the salary history question can make a big difference, said Katie Donovan,  who runs the consultancy Equal Pay Negotiations and helped draft the salary history ban in Massachusetts.

“It’s not a sexy program, but it has a huge impact,” she said.

Still, fewer than half of states have salary history bans. And two, Michigan and Wisconsin, have blocked local governments from enacting them at all. Applicants can always decline to answer, but that can have negative consequences too, said Wendy Pollack, founder and director of the women’s law and policy initiative at the Shriver Center on Poverty Law.

“It doesn’t eliminate the bias that’s inherent in these negotiations,” she said, citing research that shows when women and Black men refuse to provide their salary history or try to negotiate for higher pay, it’s often viewed unfavorably and they’re offered even lower salaries.

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