‘Still a dog fight’
Gender wage gap shrinks. Racial gap grows. Pay equity remains far off.
The gender wage gap in Greater Boston narrowed by 9 cents in the past two years, according to a new report by the Boston Women’s Workforce Council — shrinking for the first time since the council started studying payroll data in 2016. For every dollar men earn, women make 79 cents, up from 70 cents in 2021. “Doing that math, it was like, ‘Whoa,’ ” said Kim Borman, executive director of the council. “I did it six times to make sure.”
The drop appears to be driven by an increase in women advancing into highly paid leadership roles, Borman noted, and by a 6 percent average salary increase for women overall, while men’s average salary declined.
The math wasn’t as positive when it came to the racial wage gap, however. That pay divide increased by 3 cents since 2021, with employees of color earning 73 cents on the dollar compared with white workers.
Black and Latina women fare the worst, making less than half what white men do.
The pandemic likely played into the wage discrepancies, workplace analysts note. Federal funding enabled many women to continue working or take new jobs, and worker shortages in health care, which has a roughly 80 percent female workforce, led to strong wage increases for women. The ability to work remotely may also play into women’s abilities to take higher-paying jobs, while the new state law mandating paid family and medical leave is allowing greater flexibility to care for family members.
Meanwhile, communities of color continue to feel the impact of COVID, with increased health problems and caregiving demands hurting the ability to work. This has likely compounded the divide created by the prevalence of people of color in lower-paid jobs and a lower share getting promoted into management.
“Most times when you look at efforts that go toward DE&I . . . it’s white women and Asian women who have benefited,” said Beth Chandler, BWWC council member and executive director of YW Boston, a nonprofit that promotes equity and is one of more than 250 local employers that have signed the BWWC’s 100% Talent Compact to take action on wage gaps. “It’s Black and Latina women and Indigenous women who have not.”
White and Asian women in the Boston area earned
‘Most times when you look at efforts that go toward DE&I … it’s white women and Asian women who have benefited.’
BETH CHANDLER, BWWC council member and executive director of YW Boston
‘I don’t think most organizations are out actively discriminating against marginalized groups. But changes don’t happen on their own.’
KIM BORMAN, former chief financial officer for the City of Boston
[Employers examining their practices need to realize] ‘this is hard, intensive work.’
KIM BORMAN, executive director, Boston Women’s Workforce Council
just over $100,000 a year on average at the 103 companies analyzed in the report, while women of other races earned between $58,000 and $79,000.
Massachusetts has a number of laws dedicated to pay equity, but its 27-cent gender pay gap is the 22nd highest in the country, according to the National Partnership for Women & Families, which, unlike the BWWC report, includes part-time workers and relies on census data.
Vermont, on the other hand, has the lowest pay gap of any state, at 15 cents. The state’s small size and largely white workforce may play into this, said Cary Brown, executive director of the Vermont Commission on Women, but Brown noted that the state has passed pay equity laws, strengthened protections against sexual harassment and discrimination, and is investing in child care — “probably the single thing that most impacts women’s ability to make as much money as men,” she said.
Unlike other wage gap reports, the Boston Women’s Workforce Council uses payroll data from employers, rather than relying on census surveys. The salaries of more than 165,000 workers were analyzed to find the raw wage gap as of last December, without adjusting for type of job, experience, or education. Research shows that even when those factors are accounted for, though, men are still paid more than women.
Most of the current earnings gap is between men and women in the same occupation and largely emerges after the birth of the first child, according to research by Harvard economist Claudia Goldin, who just won the Nobel Prize for her work on the issue. Women in dual-career heterosexual couples are more likely than men to forgo demanding, higher-paying jobs to be more available at home, she found. And women who take high-level jobs end up burning the candle at both ends. Over half of women in senior management take care of most of their family’s household duties and child care, according to management consulting firm McKinsey & Co., compared to 13 percent of male senior managers.
And the wage gap gets even wider at the top. In Boston, the “performance pay” gender wage gap, including bonuses and cash incentives, is especially vast at the executive level, jumping from a 25 cent gulf in base pay to 42 cents overall.
Pay equity isn’t possible, Goldin has said, until there’s “couple’s equity.”
When it comes to advancement, the problem isn’t necessarily the glass ceiling, according to McKinsey, it’s the “broken rung” on the way there. For every 100 men promoted from entry level to manager, 87 women — and only 73 women of color — move up to management.
Employers examining their practices need to realize “this is hard, intensive work,” Borman said. Salaries should be continually analyzed and adjusted, if needed, and managers trained on how to better support employees. Everything from what job postings say and who gets interviewed to how promotions are granted must be scrutinized.
David Sweeney, former chief financial officer for the City of Boston, instituted a number of changes to bolster inclusivity when he took over in 2020 as chief executive of the nonprofit now called the Longwood Collective, a Compact signer that provides planning, transportation, and other services in the Longwood Medical and Academic Area. Open positions are posted on specialized job boards where a diverse array of candidates, from working mothers to engineers of color, will see them. Workforce diversity is tracked, compensation consultants review all salaries regularly, and every employee gets a bonus when corporate goals are met.
This has a cost, Sweeney said, and can be challenging in a tight labor market.
“I don’t think most organizations are out actively discriminating against marginalized groups,” he said. “But changes don’t happen on their own. It takes a very proactive mentality to move the needle on these things.”
The smallest gender wage gap in the BWWC study — 6 cents — is in the nonprofit sector, where the workforce is 71 percent female. But nonprofits also have a 44 cent racial wage gap, the largest of any industry studied. This racial divide stems from the fact that leaders of nonprofits tend to be white, while lower-paid employees serving clients are more often people of color, said Cambridge-based diversity consultant Su Joun.
There’s also an assumption that because nonprofits often support disadvantaged communities, they must be “naturally inclusive” and don’t examine their practices as carefully as they should.
“Nonprofit leaders assume they’re immune to biases and microaggressions because of the good work they do,” she said.
Hub International, the national insurance brokerage with 26 offices in New England, including 11 studied for the BWWC report, increased the raise pool this year by 60 percent across New England after analyzing its compensation structure. In one division, an average adjustment of 8.4 percent was made for more than half the team to alleviate wage gaps, said Mim Minichiello, chief performance and talent officer, and BWWC council member. One person got a 20 percent boost in pay.
Compensation is much more structured than in the past, Minichiello said, which is especially important in a business where pay discrepancies can be inherited through acquisitions. But it takes constant supervision.
“It’s still a dog fight,” she said.