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The Bottom Line
Fair and equitable compensation should be a top priority for companies if they want to reach their full business potential. Pay equity improves employee engagement, morale and performance; increases employee retention and reduces turnover; and attracts new talent – all so companies can remain competitive in a tight domestic labor market and an ever-expanding global market.
It’s never been more important for companies to conduct a pay equity analysis, then put a strategy in place that honestly confronts wage disparities and improves pay equity. This can be achieved through new job offers, merit pay increases, and promotions.
Despite the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964 – which require equal pay for equal work – the U.S. Census Bureau reports there was an 83.6 percent difference between the median weekly wages of women and the median weekly wages of men in 2023 ($1,005 to $1,202). However, it’s important we fully understand how these numbers are calculated because the method used cause them to be distorted.
The 83.6 percent pay difference is determined by dividing the average annual pay for women who work all year, full-time by the average annual pay of men who work all year, full-time. However, the Census Bureau considers working 35 or more hours a week to be “full time.”
The U.S. Department of Labor reports that among full-time workers, men were more likely than women to work more than 40 hours per week. The proportion of men (21 percent) who worked 41 or more hours per week in 2023 was almost double that of women (12 percent).
The number gets even more distorted by the fact that, in its calculations, the Census Bureau assumes that elementary and secondary teachers work 52 weeks a year when they typically work 38 weeks a year. Obviously, dividing by 52 rather than 38 greatly reduces their average weekly earnings. This affects the numbers significantly when you consider 77 percent of the 4,007,908 teachers in the United States are women.