Two recent news pieces illuminated the need for the U.S. labor market to reach parity in terms of pay, permanently eliminating gaps that continue to exist along gender and racial lines. First, a recent report indicated that women now make up about 50% of the workforce. This reality should be reflected not only in pay, but also in positions of power within different institutions, which is still a challenge. The other news item was an accusation by New York State Attorney Andrew Cuomo that a contractor paid his construction workers based on a racial pay scale. Although they all performed the same work, Cuomo charged that White workers were paid $25 an hour, African Americans $18 an hour and Latino workers $15 an hour.
Businesses who demonstrate more gender and racial equity tend to be more productive, since they are able to incorporate the thoughts and opinions of a variety of persons. In a globalized world, such a diversity of perspectives can benefit the business bottom line.
Unfortunately, many employers have still not overcome their sexist and/or racial biases. The reality is that women earn 77 cents to the dollar compared to men, and when comparing women of color to white men, the gap widens. According to the Shriver Report, a report edited by former newswoman and current First Lady of California Maria Shriver, much of the gap is not accounted for by the fact that men and women work in different jobs. It is evident that such differences are the result of entrenched beliefs that women and persons of color do not merit the same pay as their white male counterparts, despite performing the same work. Such intractable views are a detriment to the financial health of many companies, and to the overall success of U.S. labor market. In order to change this pay gap and bring equity to positions of power within organizations, business leaders should consider the following:
1) Good morale= better productivity- soon women will outnumber men in the workforce, and their production will be a vital part of business growth. Further, a racially diverse workforce is already a reality for the U.S. employment landscape. Gender and racial pay inequity contributes to poor morale, which can influence the level of productivity of your workforce. The assumed savings gained from pay disparity can be offset by higher productivity from workers who are compensated fairly.
2) Risk of brain drain and poor retention- the loss of talented women and persons of color due to pay and promotion inequality can be a significant setback for a company, particularly one who is seeking to either grow or maintain market share.
Constant turnover is another costly factor, since new employees would need to be trained and transitioned into the culture of the company. Therefore, implementing pay and career advancement equity would ultimately lead to long term cost savings.
3) Need for flexible work schedules- although the care workload has becoming a bit more evenly distributed among men and women, women still are expected to handle the bulk of child care duties, which results in the need for more flexible work schedules. Such creative work schedules can benefit not only women but all workers, but it is important that managers utilize innovative strategies to meet the needs of both the company and its employees. If an employee can complete his or her work from home or within a workweek that is 35 hours but not necessarily 9-5, such opportunities should be explored.
It will take a collective effort to change this gender and racial inequity but it is a vital goal which will lead to the U.S. enabling its workers to reach their full potential and to reap the true fruits of their labor.
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