Susan R. Madsen: Help close the gap with a salary history ban

Asking women what they have been paid only continues the gender wage disparity

(Francisco Kjolseth | The Salt Lake Tribune) Derek Miller, President and CEO of the Salt Lake Chamber and Pat Jones, CEO of the Women's Leadership Institute, release a proposal on how to close the gender wage gap in Utah during a news conference at the Salt Lake Chamber on Friday, Nov. 30, 2018.

“So, tell me about your salary history….”

While this request may seem innocuous, and even helpful, in a job interview, it can perpetuate the pay disparity that exists for many women and people of color. At the Utah Women & Leadership Project, one of our top priorities is to understand the factors that affect the gender wage gap and work to shrink it. Banning salary history inquiries is a step in the right direction.

For decades people have used the courts and legislation to address the large gap between what men and women are paid. The Equal Pay Act of 1963 banned salary discrimination in the workplace based on gender. The good news is between 1980-2016, the gap has closed by half.

The bad news is that Utah lags behind the nation and women in this state who work full-time earn 70 cents to 74 cents for every dollar a man makes, which translates into $14,000 less annually than men. (That’s a good used car, a family trip to Hawaii, or tuition and board for a year at a state school.)

This affects women from all backgrounds, ages, and levels of educational achievement, and is more pronounced for women of color.

You may be wondering what salary inquiries have to do with any of this. Let me be clear: I don’t believe asking about compensation history is a terrible practice established to oppress women and minorities. It’s a common tool used by employers to figure out what to pay prospective employees. When asked during interviews, it can be used to determine if a prospective employee is financially out of the company’s range, or a low salary history might indicate they are not experienced enough.

However, the problem is that for women who have historically been paid less than their male peers for comparable work, and the salary history is used to perpetuate that gap. A Harvard Law Review study on Oregon legislation states that the “goal of banning employers from asking about previous salary is to prevent employers from justifying an otherwise unlawful pay disparity on the basis of prior salary.”

We all want to think of ourselves as fair, but the research shows this practice consistently hurts women, despite good intentions.

It’s common practice for many organizations to offer a certain percentage wage bump to incoming employees. So if a teacher moves from a state with a low starting salary to a state that pays more, she may only see a slight increase in her pay, and in fact make less than peers despite her experience. These inquiries disadvantage anyone who has been financially undervalued.

In banning questions about salary history, the hope is that we can break the cycle of pay disparity for women, minorities, and other groups that have been traditionally underpaid and given lower raises.

As the Utah Legislature contemplates proposals such as this, it is good to remember that Salt Lake City has had such a ban in place since March of 2018. It would not be a stretch to take such bans, whose sole purpose is to promote equity, and extend them statewide.

Salary history inquiries did not create the problem of gender wage gap, but they certainly perpetuate them. It’s time we break this unjust cycle and pass legislation that can help all employers make salary decisions that are more equitable and based on true ability, experience and potential.

Susan R. Madsen, Ed.D., is the inaugural Karen Haight Huntsman Endowed Professor of Leadership & Director, Utah Women & Leadership Project, Jon M. Huntsman School of Business, Utah State University.