How the pandemic is affecting women’s progress to pay equity

Today, the United States marks Equal Pay Day, and for 2021, the day carries added significance given the pandemic’s disproportionate impact on women in the workforce.

Lexy Martin

According to various estimates, the COVID-19 health crisis has cost more women their jobs, as up to 3 million female employees to date have dropped out of the labor force during the pandemic, compared with 1.8 million men. Yet, according to Lexy Martin, head of research at people analytics firm Visier, women were seeing gains in pay equity before the pandemic.

Related: Why elevating equity is the challenge of the decade for HR

In fact, to understand whether progress has been made in closing the gender pay gap—and whether that progress will continue—Visier has released new data on pay equity. Key findings include:

  • Overall, the gender pay gap for women closed by six cents between 2017 and 2020, from $0.77 to $0.83 for every $1 their male counterparts earn.
  • While the wage gap closed across all ages, it improved the most for younger women. In 2017, women ages 25-30 earned $0.79 for every $1 men made—but that figure increased to $0.86 in 2020. Even so, women are still paid 17 cents less per dollar than men on average, and the pandemic-induced recession is threatening to hurt the gradual gains that women have made.
  • The highest pay equity levels for women come for those ages 35-40, where Visier’s data found that female employees make nearly $0.90 to every $1 their male colleagues earn. This finding is consistent with recent Visier data on female managers, which found this age bracket has seen the most progress on women in managerial positions.
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“The gender pay gap narrowing by six cents between 2017 and 2020 is significant progress, considering that our 2017 data found that women under age 40 earned an average of 79 cents for every dollar earned by men,” Martin says, adding that if this rate of change continues at the same pace, pay equity could be achieved by 2029, narrowly beating the goal set by the Equal Pay International Coalition (EPIC) of achieving pay equity by 2030.

“From my experience and vantage point within the field of HR, the trend of increasing pay in general for all employees, but especially for women—and young women in particular—is growing,” she says.

Martin notes that often this is part of a minimum viable pay initiative for early-stage workers, explaining that it’s easier to close the wage gap at the early earnings stage than it is for higher earnings stages. The progress also the result of organizations increasingly focusing on promoting women, at least at lower levels of management, which ultimately will lead to women increasingly breaking the glass ceiling into executive leadership positions. The past year, however, has hurt women in the workforce for a couple of key reasons.

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“Not only are women overrepresented in industries hardest hit by the COVID-19 pandemic, (but) they have also carried the burden of overwhelming responsibilities on the home front,” she says, citing a Gallup analysis that found significantly more out-of-work mothers than out-of-work fathers say they stopped working due to childcare demands stemming from school closures.

Martin offers ideas for how employers can take a more proactive role in supporting gender equity as organizations move into pandemic recovery mode.

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“To get to a state of equal pay in America, simply replicating past efforts won’t get us there, especially in the shadow of the COVID-19 crisis,” she says. Rather, Martin says, to close the wage gap, organizations need to improve equity of representation, particularly in leadership roles, and improve diversity, equity and inclusion (DEI) more holistically.

“Workplace technology, including people analytics tools, can shine a light on unconscious bias and disparities across employee lifecycle processes,” Martin says, “and more granularly across geographies or job roles, to identify where pay gaps and other inequalities lie— such that leaders can then take specific, corrective actions to remedy pay disparities.”

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