26 Oct The Pandemic Pay Cut

The “she-cession” is shining a light on systemic workplace inequities—and addressing them could close the wage gap

By Kimberly Olson 

For years, the gender pay gap in the United States had been narrowing. Then along came the COVID-19 pandemic. 

A confluence of factors—layoffs, businesses shuttering, lack of childcare—caused women’s workforce participation to plummet to a 33-year low. Women of color have been especially impacted. Research from LeaniIn.org and SurveyMonkey reveals, for example, that 58 percent of Black women reported being laid off, furloughed, or having their hours or pay reduced in 2020, compared with 31 percent of white men. 

While men have rebounded from pandemic-related job losses, women have not, according to the most recent Bureau of Labor Statistics (BLS) data. And when women do return to work, many will take a post-hiatus pay cut.

Experts have raised the alarm about a pandemic “she-cession,” with Vice President Kamala Harris calling women’s mass departure from the working world “a national emergency.” And while the pandemic didn’t cause the wage gap, it worsened the challenges that women faced all along. 

Remote work: a double-edged sword

Studies show that women and people of color, especially, love working from home. But in a survey by management consultancy Egon Zehnder, most C-suite leaders—7 in 10—said that remote and flexible employees may be passed over for promotion into leadership due to less physical visibility than their on-site peers.  

“I would actually expect pay equity to get worse because a lot of companies have switched to hybrid work without putting in place the infrastructure needed to ensure that hybrid work doesn’t penalize those who do it,” says Joan C. Williams, a feminist legal scholar, founding director of the Center for WorkLife Law, and professor at the University of California Hastings College of the Law. “People who show up on-site get greater access to career-enhancing work. This is just going to exacerbate the problem that women have in getting fair access to career-enhancing assignments, which in turn will decrease pay equity.” 

Even pre-pandemic, research by the Center for WorkLife Law—whose database comprises 18,000 people—found a dramatic gender difference in perceived fairness of access to career-enhancing work. Among white men, generally professional workers, 85 to 90 percent usually report fair access to career-enhancing assignments. Everybody else reports sharply lower rates, with (in one data set) just 53 percent of women of color saying the same. That’s bad news indeed because addressing career inequity is key to achieving pay equity. 

Williams says managers need to pay attention to who’s getting the plum assignments. She’s also a strong advocate for measuring progress at key points where bias rears its head, such as in hiring, performance reviews, and promotion rates. 

“Advanced technology platforms can ensure that every talent decision made at your organization is free of bias,” says Katica Roy, a gender economist and founder of Denver-based Pipeline, which leverages artificial intelligence to identify and drive economic gains through gender equity. “That way, you can ‘seal in’ pay equity systemically and proactively, rather than remedying pay gaps after they open.”

Roy cautions that flexible and remote work could skew performance evaluations unless managers are trained to value remote employees equitably. Employee performance should be evaluated based on results, not on an employee’s location. 

Williams says work-from-home employees needn’t get short shrift. Her organization offers a tool kit, available at biasinterrupters.org, that employers can use to implement hybrid work arrangements in a way that doesn’t further penalize women and people of color.

The maternal wall

Williams, who authored Bias Interrupted: Creating Inclusion for Real and for Good, says that the strongest form of workplace gender bias is “the maternal wall.” “What our research shows—and other research has shown consistently for 20 years—is that when women have children, they’re back to square one in terms of proving their competence and commitment,” she says. “That shows up in fewer raises.”  

Analysis of census data by the National Women’s Law Center found that motherhood costs women about $16,000 annually in lost wages.

Meanwhile, as the pandemic arrived, working mothers were pushed to the brink. A 2020 Pew survey found that among opposite-sex couples, 74 percent of mothers reported doing more to manage their children’s activities than their spouse or partner did. This trend prompted more women than men to leave the workforce, according to the BLS, a phenomenon experts call the “COVID motherhood penalty.” 

During her career, Katica Roy twice fought to be paid equitably, and won, using the Lilly Ledbetter Fair Pay Act of 2009. She points out that gender pay inequity doesn’t just hurt women. It hurts families. 

Roy was her family’s primary breadwinner—while her husband worked from home and was the primary caregiver for the couple’s two children—yet she had fewer pay and promotion opportunities than her male colleagues. 

“If I speak up about inequitable treatment and pay, I may win additional compensation and opportunity,” she says. “However, months or even years later, I could face retaliation, which will either end my career or hinder my career prospects. Why did I have to spend my time researching my rights and risk my career to receive equitable treatment in the workplace? Moreover, mothers earn 69 cents for every dollar fathers earn. As a breadwinner mom, why are my children worth less to society than children whose fathers are the breadwinner?” 

Most Black mothers—74 percent—are family breadwinners, supporting eight million children. Black breadwinner moms have the largest gender pay gap of any cohort of women in the country, making 44 cents for every dollar earned by white breadwinner dads and 52 cents for every dollar earned by Black breadwinner dads.

Williams believes pay transparency—openly sharing company compensation practices, or even pay rates for specific positons—is important. “Increasing numbers of states are passing laws to require it because of the research showing that it can be helpful in closing wage gaps,” she says.

Companies should ask working moms (and dads) what they need in order to thrive and remain in their job. And once again, it’s important to collect data to ensure equity at every step of an employee’s life cycle.

Burnout: worse for women

During the pandemic, working women have experienced more chronic stress, exhaustion, and burnout than men, with the gap widening over time, according to research by McKinsey & Company. By 2021, one in three women considered downshifting her career or leaving the workforce.

Senior-level women—often held to higher standards than their male counterparts and more likely to be blamed for failures, according to McKinsey—were 1.5 times more likely than senior-level men to consider leaving their job or downshifting their career due to COVID-19. Nearly three in four blamed burnout. McKinsey reported that women of color are more likely than white women to face disrespectful microaggressions at work, putting them at even greater risk of burnout.

Companies can help by setting clear boundaries so employees don’t feel the need to be “always on.” McKinsey suggests reinforcing healthy work norms, such as telling employees they needn’t respond to nonurgent requests outside of traditional work hours. Creating a culture of allyship—in which allies use their social capital to advocate for women of color—can also help.

Fixing a broken foundation

One day, as Katica Roy shared her pay equity journey with a radio host, he asked if the gender pay gap could be closed in this lifetime. She answered, “Only if we make it an economic issue.”

That conversation prompted her to dig into the research, as well as conduct her own. “I spearheaded original research and found that for every 10 percent increase in gender equity, businesses can reap a 1 to 2 percent increase in revenue,” says Roy. “I see gender inequity as a massive economic opportunity.” 

She says the United States could increase its GDP by $512 billion by closing the gender pay gap—and safeguard retirees to boot. “Of the 58 percent of SNAP households [comprising people living and cooking together] headed by a single adult, 92 percent
of them are headed by women,” Roy says. “If we closed the gender pay gap, we could cut Social Security’s $13.2 trillion shortfall by 35 percent, or $4.7 trillion.”

But as well-intentioned as some diversity and equity programs may be, they can fall short. Williams emphasizes that gender and racial biases are embedded in companies’ very business systems. To address pay inequities, then, companies must consistently use evidence and metrics to reveal those structural biases. 

“I talk in Bias Interrupted about the [former] head of DEI at Clorox who tracked data and put business units in yellow, green, or red—depending on whether they’d made improvement—and reported quarterly to the CEO,” Williams says. “And you better believe there was progress.”

“We need to address the root of the problem,” Roy adds. “That means ensuring the inputs to pay—performance reviews, rates of promotion, access to resources, opportunities, span of control—are equitable. Pay is the symptom, not the disease.” DW

Kimberly Olson is Diversity Woman’s managing editor.

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“When women have children, they’re back to square one in terms of proving their competence and commitment. That shows up in fewer raises.”

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“For every 10 percent increase in gender equity, businesses can reap a 1 to 2 percent increase in revenue.”