Economy

Philadelphia takes salary history off the negotiating table. Could it help close the gender wage gap?

Path to progress

A new Philadelphia law bars employers from asking job applicants to provide their salary history, a move equal pay advocates say could help close the wage gap that often begins as soon as women graduate from college.

Protesters gather for the Women's March on Philadelphia on Jan. 21, 2017. Just two days later, the city passed a law that prevents employers from asking for job applicants' salary histories, hoping to pull working women out from lower salary trends.
Jacqueline Larma/AP
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Dismissing legal threats from business giants within its city limits, Philadelphia passed a law Monday that intends to shrink the gender wage gap by barring companies from asking prospective employees for their salary history.

The new law, signed by Democratic Mayor Jim Kenney just two days after hundreds of thousands marched across the country calling for women's rights, bans employers from requesting information about workers’ past pay. Supporters hope it will result in women and men with comparable experience receiving similar paychecks. The Philadelphia legislation mirrors a Massachusetts state statute signed into law last summer.

Despite decades of efforts to equalize pay rates, women's wages have lagged behind those of men. That pattern stems from both ingrained discrimination, and a tendency for women to select jobs with more flexible hours, such as teaching and nursing – which often correspond to lower pay – as they continue to shoulder the majority of household and childcare duties for their families.

Legislation such as the 1963 Equal Pay Act and the Lilly Ledbetter Fair Pay Act of 2009 has sought to protect women from pay discrimination. But after years of fighting for equal pay for equal work, remaining gaps highlight the continuing need for cultural and professional shifts, as well as legal ones, in order to affect lasting change in pay equity.

Philadelphia's new law “does help this basic problem of the first job then echoing through a career in terms of inequality,” Judith Levine, a professor in the Sociology Department at Temple University in Philadelphia and author of the 2013 book, "Ain't No Trust: How Bosses, Boyfriends, and Bureaucrats Fail Low-Income Mothers and Why It Matters," tells The Christian Science Monitor in a phone interview.

“It doesn’t address a lot of other causes of gender wage inequality,” she adds. “One of the biggest causes is sex segregation and the fact that women tend to do different work than men. To the degree that women are doing different work and that work is paid less, asking individuals about their salary history or not asking them isn’t going to change that, necessarily.”

On average, American women made nearly 80 cents on every dollar that men earned as of 2015, with women of color’s paychecks falling even farther behind. Before the Equal Pay Act passed, women nationwide made around 61 cents on every dollar.

If pay equity progress continues at its current pace, women will not earn the same amount as men until 2059, according to projections from the Institute for Women’s Policy Research.

While parts of that gap stem from women taking time off to raise children, engaging in salary negotiations less frequently, or finding work in fields that see lower profits, research shows the division begins as soon as men and women leave college. A study conducted last year by the Economic Policy Institute found that recent female graduates make an average of $4.36 less hourly than their male counterparts, adding up to roughly $9,000 less each year.

Philadelphia's measure received unanimous support in the City Council, while Massachusetts' law garnered sweeping bipartisan approval. But some in the business community have aired concerns with the law, arguing that it places the government intrusively between companies and their potential workers.

Comcast, which anchors its corporate headquarters in the city, has threatened to sue Philadelphia for violating the First Amendment and limiting the scope of its questions. The city’s Chamber of Commerce has also spoken out, saying that businesses will see the measure as an extra “hassle” in setting up shop there.

“When I was hired, how was [Comcast CEO] Brian Roberts going to figure out what to pay me?” David Cohen, the executive vice president of Comcast, told the Philadelphia Inquirer earlier this month. “It's not like my job existed. It's not like there is a salary scale or a standard compensation package for an executive vice president with that portfolio of responsibilities. A critical data point in that negotiation was what was I making.”

The city has dismissed such concerns. As New Jersey, New York, Pittsburgh, and Washington, D.C., have all introduced or begun to float similar legislative ideas, Comcast is likely to become just one of many large businesses coping with the new regulations.  

“I know that Comcast and the business community are committed to ending wage discrimination, and I’m hopeful that moving forward we can have a better partnership on this and other issues of concern to business owners and their employees,” Mayor Kenney told the Associated Press. “This doesn’t need to be an either/or argument – what is good for the people of Philadelphia is good for business, too.”

In Massachusetts, the Boston Chamber of Commerce eventually backed the statewide legislation.

“I don’t really understand why this is bad for business,” Hannah Riley Bowles, a public policy senior lecturer at Harvard University and director of Women & Power, the Harvard Kennedy School's executive program for women leaders from the public, private, and nonprofit sectors, tells the Monitor. “Having the information that somebody was paid less in the past – it’s an irrelevant anchor. It’s not actually relevant to the negotiation. And I do think [the law] could be beneficial to people who worry that they’ve been anchored at lower wages.”

While these initiatives are brewing in the nation’s progressive-leaning Northeast cities, they likely have the power to influence change nationally, Dr. Levine says. The laws are simple and straightforward, and advocates will likely argue that business backlash to them is sexist, or that past salary information is not needed for new hires.

Dr. Bowles says the law could help those who have taken a few years off of work and have outdated salaries listed as their past pay rate. As traditional families structures shift and more fathers fill roles as stay-at-home dads, the legislation could benefit them upon returning to work, as well.

“It’s not a silver bullet,” she says, noting that, “I think it’s constructive. I think it can be beneficial for men.”

It can also remove barriers that hold young workers back, Bowles adds. Those who choose underpaid but formative internships straight out of college, rather than entry-level salaried jobs, will have lower wage histories to report, but could have a wealth of experience and qualifications to bring to employers.

Still, for working women and employers, completely eradicating the pay gap will depend in part on their personal and professional choices. As more women foray into male-dominated fields and leadership positions, the gap will shrink; simultaneously, men and employers can help accommodate working mothers.

“I think we really need [legislation and societal changes] happening simultaneously,” Levine says. “These legislative changes can be very powerful. But without changes in attitudes and culture, there are limits to what they can do. But of course there’s a relationship between the two; as the laws change, the attitudes change. And as the attitudes change, the laws change.”

This report contains material from the Associated Press.

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