Closing the Gender Pay Gap: Steps Towards Equality

Join us as we explore effective strategies to eliminate the gender pay gap for all.

What will you be doing in 2119? According to the American Association of University Women, that's when the gender pay gap might finally close—unless we act now.

Currently, white women earn 79 cents for every dollar earned by white men, while black women earn just 63 cents, and Latina women only 54 cents. Recently observed, Latina Equal Pay Day on November 20 underscores the staggering loss: Latina women could miss out on nearly $1 million over their careers, averaging about $26,000 each year.

This week's expert guest, Katica Roy, sheds light on how we can collectively accelerate change to close this gap sooner. As a gender economist and CEO of Pipeline, she focuses on using data to identify economic disparities and suggests practical steps we can take to level the playing field.

Katica shares intriguing—and frustrating—statistics about women's pay discrepancies and outlines how businesses can drive change. Her research, covering 4,000 companies across 29 countries, reveals that a 10% increase in gender equity correlates with a 1% to 2% revenue boost for companies. She encourages viewing gender equity not just as a social issue but as a significant economic opportunity.

In addition, she offers personal insights on negotiating pay, particularly for women of color and non-binary individuals, while also addressing the detrimental effects of the pink tax. "When discussing the gender pay gap, we often focus on money entering women's wallets, but the pink tax means more money is leaving our pockets for basic items," she explains. Women typically pay an average of 7% more than men for items like razors and shampoo.

In the Mailbag segment, Jean addresses inquiries about managing debt in relationships, handling old retirement accounts, and asset allocation for those in the FIRE movement. In Thrive, Jean provides tips on managing expenses associated with college campus visits, emphasizing cost-effective strategies.

Transcript

Jean Chatzky: (00:06)
Welcome to the podcast. Today, we're tackling the gender pay gap. Are you satisfied with your salary? Do you feel valued at work? These questions drive our discussions on bridging the gap. The more we talk about these issues openly, the better we can address them together. I'm excited to welcome Katica Roy, a gender economist and CEO of Pipeline.

Katica Roy: (01:50)
Thanks for having me.

Jean Chatzky: (01:52)
What does a gender economist do?

Katica Roy: (01:56)
I analyze the economy through a gender lens, examining participation rates and educational achievements among women, and uncovering how the economy functions for everyone.

Jean Chatzky: (02:25)
So it focuses on women's economic participation?

Katica Roy: (02:29)
And men, too.

Katica Roy: (02:30)
By analyzing data, we can assess whether the economy supports everyone and work towards equity for all.

Jean Chatzky: (02:43)
What inspired you to pursue this field?

Katica Roy: (02:47)
It began with a radio show discussion about negotiation and pay. I realized we must frame gender equity as an economic issue, not just a social one.

Jean Chatzky: (03:50)
What do you think about the prediction from the American Association of University Women about the gap closing in 2119?

Katica Roy: (04:00)
It's an accurate assessment.

Jean Chatzky: (04:01)
Why is it taking so long?

Katica Roy: (04:16)
That's a critical question.

Jean Chatzky: (04:18)
Research indicates women are gaining more financial power, so why the disparity?

Katica Roy: (04:50)
Political representation is crucial. We need more women in Congress to drive policies that empower women.

Jean Chatzky: (05:13)
What happens when women influence policy?

Katica Roy: (05:46)
Increased representation leads to protective measures like the Family Medical Leave Act and the Paycheck Fairness Act.

Jean Chatzky: (07:33)
How does your company help organizations foster fairness?

Katica Roy: (07:43)
We partner with companies to analyze their data and help reduce bias in hiring, pay, performance, and promotions.

Jean Chatzky: (08:44)
Can you give examples of what you analyze?

Katica Roy: (08:50)
We review performance appraisals to identify bias in language and provide corrective recommendations.

Jean Chatzky: (09:25)
What are the costs of gender pay inequity?

Katica Roy: (09:33)
Companies miss out on increased revenue; our study found a 1%-2% revenue increase for every 10% improvement in gender equity.

Jean Chatzky: (10:06)
How can companies address pay gaps?

Katica Roy: (10:14)
Start by evaluating performance metrics before determining pay. Pay is a symptom, not the root cause.

Jean Chatzky: (10:45)
Men and women face different evaluations in the workplace.

Katica Roy: (11:07)
Yes, often women are assessed on their past performance while men are evaluated based on potential.

Jean Chatzky: (11:23)
What can women do to advocate for themselves?

Katica Roy: (11:36)
It's crucial to document your achievements and understand your value to the company.

Jean Chatzky: (11:38)
What if you work at a smaller company without HR?

Katica Roy: (12:47)
Advocate for pay transparency and support other women in your workplace.

Jean Chatzky: (12:48)
That's vital. What else can individuals do?

Katica Roy: (13:02)
Recognize the systemic inequalities and prepare to navigate them.

Jean Chatzky: (13:20)
What advice do you have for those entering the workforce?

Katica Roy: (13:22)
Understand that evaluations may not be equitable; be proactive about showcasing your potential.

Jean Chatzky: (13:35)
Can you provide actionable tips?

Katica Roy: (13:36)
Document your successes and relate them to the company's goals.

Jean Chatzky: (13:47)
Isn't that still focused on past performance?

Katica Roy: (13:50)
It can be, but relate it to future contributions to the company.

Jean Chatzky: (13:59)
What else should women consider when negotiating?

Katica Roy: (14:11)
Focus on collaboration rather than competition during negotiations.

Jean Chatzky: (14:25)
What about racial inequities that compound this issue?

Katica Roy: (14:32)
Absolutely. Women of color face even greater disparities in pay and opportunity.

Jean Chatzky: (14:46)
How can we approach the topic of transparency in salaries?

Katica Roy: (14:52)
Transparency fosters equity and helps to demystify wage differences.

Jean Chatzky: (15:23)
What's your stance on sharing salary information?

Katica Roy: (15:29)
I advocate for it as it can lead to collective action for equitable pay.

Jean Chatzky: (16:51)
What about inclusivity for non-binary individuals?

Katica Roy: (16:56)
Recognition is growing, and we are beginning to see more inclusive policies.

Jean Chatzky: (17:32)
How do these changes affect salary fairness?

Katica Roy: (17:37)
Data on non-binary individuals is still limited, but we know there are disparities based on gender identity.

Jean Chatzky: (18:12)
What's your take on salary transparency?

Katica Roy: (18:29)
Transparency can help reduce pay gaps and encourage equitable practices.

Jean Chatzky: (18:32)
What's the impact of tariffs and the pink tax?

Katica Roy: (25:41)
The pink tax leads to women paying more for everyday items, while tariffs disproportionately affect women due to higher clothing costs.

Jean Chatzky: (26:49)
Is there a solution?

Katica Roy: (27:16)
We can lobby for legislative changes to reduce gender-based tariff calculations.

Jean Chatzky: (27:30)
What about student loans?

Katica Roy: (27:33)
Women disproportionately hold student loans due to lower lifetime earnings.

Jean Chatzky: (27:47)
Is this about the amount borrowed?

Katica Roy: (27:51)
It also relates to savings for education, as families often save less for daughters than sons.

Jean Chatzky: (28:05)
Thanks for shedding light on these issues, Katica. We appreciate your insights!

Jean Chatzky: (29:31)
We'll be back next week with more insights into making financial progress.

Jean Chatzky: (29:40)
Thank you for listening!

Kathryn Tuggle: (29:51)
Thanks for joining us!

Jean Chatzky: (29:52)
We'll see you next time!

Kathryn Tuggle: (30:02)
Looking forward to it!