Pay equity: Challenges and the movement for change

In 2023, women in the U.S. earned about 22% less than men, while the global gap was 20%, according to the UN. An October 2022 survey by the Pew Research Center found that half of U.S. adults believe a primary reason for this wage gap is that employers treat women differently.

High-profile cases fighting for equal pay such as the U.S. Women’s National Soccer Team’s battle show that pay equity issues persist between men and women at every level. 

In 2019, the women’s team filed a lawsuit under the Equal Pay Act against their employer, the U.S. Soccer Federation, citing pay inequity despite their performance record far surpassing that of the men’s team. The women’s team has won four World Cups overall, while the men’s team has never even come close to achieving this. 

This case, which led to a $24 million settlement, emphasized the need for fair pay across all job titles and industries.

The gender pay gap is an important focus of the women’s rights movement. Learn about its complexities, the fight for change, and how you can help make a difference.

What does pay equity mean?

Pay equity is the concept that employees performing substantially similar work, regardless of gender, race, or national origin, receive equal pay. 

In the U.S., several laws have been introduced since 1963 to try to stop pay inequality.

Pay equity laws

Pay equity laws aim to ensure that employees are compensated fairly, regardless of their gender, race, national origin, or other protected characteristics. 

To protect equitable pay, the U.S. has several foundational laws, including the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964. These federal laws are reinforced by state-level pay equity laws, such as the California Equal Pay Act and California Fair Pay Act, which impose some of the strictest requirements for equal pay in the nation. 

State laws like these mandate that employers provide equal pay for “substantially similar” work, taking into account job requirements, responsibilities, and skills, rather than relying solely on job titles.

Equal pay act

The Equal Pay Act (EPA), enacted as part of the Fair Labor Standards Act (FLSA) in 1963, was one of the earliest legislative efforts to combat wage discrimination based on sex. The law states that men and women working for the same employer must receive equal pay for substantially equal work, provided that job performance requirements, working conditions, and responsibilities are comparable. 

The EPA does allow for certain pay differences when they are based on what the U.S. Equal Opportunity Commission calls “affirmative defenses.” Those include seniority, merit, or production-related factors, provided they are job-related and consistent with business necessity, and any factor other than sex.

The EPA has been instrumental in driving greater wage parity, but significant wage gaps persist across many industries due to limitations in enforcement and reliance on factors like salary history, which often perpetuate existing disparities. 

As a result, many states have strengthened pay equity laws to close these gaps. For instance, the California Equal Pay Act extends protections by requiring pay equity across different work locations for the same employer and prohibiting setting pay according to salary history.

Pay equity analysis

A pay equity analysis, often referred to as a pay equity audit, is a proactive tool for employers to identify and correct wage disparities within their organizations. By reviewing employee compensation data, including pay structures and pay ranges, employers can detect pay inequities tied to gender, race, or other protected characteristics.

Conducting a pay equity analysis not only helps ensure compliance with federal and state pay equity laws but also promotes a fair and transparent compensation environment. 

Groups most affected by pay inequity

Pay inequity in the U.S. impacts various demographic groups differently, with Black and Hispanic women facing some of the largest wage disparities.

Black women earn approximately 63 cents and Hispanic women 57 cents for every dollar earned by white, non-Hispanic men. 

The gender wage gap varies widely by occupation. Fields like food services, writing, counseling, pharmacy, and social work show some of the smallest disparities, where women earn 97-99% of what men make. 

However, in sectors such as financial services sales, financial management, and financial advising, the gap is significantly larger, with women earning between 61-66% of their male colleagues’ earnings. 

The COVID-19 pandemic exacerbated these inequities, especially for women in industries like retail, hospitality, and healthcare, where job losses were severe and recovery rates slower than in other sectors. 

The pandemic showed the importance of implementing fair pay structures, as well as salary history bans and transparent pay ranges, to prevent exacerbating wage discrimination and achieve pay equity.

Importance of achieving pay equity

Achieving pay equity is crucial for promoting economic security, reducing poverty rates among women, and fostering workforce diversity. 

According to a Harvard Business Review study, organizations with equitable pay practices experience higher employee engagement, reduced turnover, and increased productivity, which are all critical for maintaining a competitive workforce. 

Pay equity is not only a matter of fairness but also essential for sustainable economic growth. Reducing the gender pay gap and enforcing transparent compensation policies can contribute to a more inclusive economy, benefiting employees and employers alike.

In the U.S., Hispanic women suffer the widest gender pay gap. Photography by UN Women/Ryan Brown on Flickr

Despite federal laws such as the Equal Pay Act and Title VII of the Civil Rights Act aiming to ensure equal pay for substantially similar work, the gender pay gap persists. Women in the U.S. earn only 82 cents for every dollar men earn, with minimal progress over the last two decades. 

Although women now outpace men in college degrees — with graduation rates of 60% for men and 67% for women — pay inequities in employee compensation remain prevalent across sectors. 

The wage gaps reflect deeper structural inequities within compensation practices that rely on historical salary history, outdated pay ranges, and insufficient pay equity policies. Women in high-earning professions also experience pay discrimination. 

For example, female physicians make significantly less than male physicians. A study showed that “female doctors earn significantly less than men, often tens of thousands of dollars less annually, despite similar demographic and work-related profiles”. 

Wage gaps limit women’s ability to build wealth, save for retirement, and secure fair pay throughout their careers. To address these pay equity issues, state and local governments have introduced salary history bans, requiring employers to focus on job-related qualifications rather than past compensation data, aiming to reduce wage discrimination and promote equal pay. 

Ensuring compliance with these equitable pay laws through routine pay equity audits and equal pay analysis is essential in achieving pay equity.

The pay equity movement

The pay equity movement is gaining traction as more workers demand equitable pay and fair compensation practices. 

In 2022, Google famously agreed on a $118 million payout to about 15,500 female staff to settle a lawsuit over gender discrimination in pay. The lawsuit was first brought in by female employees in 2017 who alleged they were being paid less than their male counterparts.

Organizations like Equal Pay Today and AAUW advocate for fair labor standards and pay transparency. They provide legal counsel resources for wage discrimination cases and supporting laws that ensure compensation based on “bona fide factors” such as job-related skills and industry standards.

Online petitions supporting equal pay

Many petitions on Change.org reflect growing demands for equal pay for equal work, stronger compensation policies, and prohibiting employers from relying on prior pay to set new pay scales. 

In January 2017, New York City Public Advocate Letitia James started a petition that led to the introduction of pay equity legislation. 

Following the support of 4,800 signatures, New York City Council voted to pass legislation that prohibits prospective employers from requesting salary history from job applicants. 

In the UK, a woman who experienced the gender pay gap at her job started a petition for women’s legal “right to know” if they are being paid less than their male colleagues. It gathered over 63,000 signatures. Her campaign, also supported by The Fawcett Society — the UK’s leading charity campaigning for women’s rights — led to a Parliament-presented bill on wider gender pay gap reporting.

These efforts, when supported by state and local governments, are vital in addressing pay inequities and demanding corrective action to promote equal employment opportunity for all workers.

Join the fight for equal pay

Achieving pay equity requires collective action, both at the individual and policy level, to support equal pay and fair compensation. 

You can help address the wage gap by advocating for pay transparency and endorsing petitions aimed at expanding pay equity policies and practices.

Starting your own petitions is an easy way to get involved in the fight for women’s rights to address gender inequality issues like pay equity. Make your voice heard and even get laws changed for a world where unequal pay and pay discrimination are a thing of the past.