business news in context, analysis with attitude

by Kevin Coupe

There have been a couple of stories this week about how Starbucks, which claimed last year that it had achieved 100 percent pay equity for all people, regardless of gender or race, now has signed onto the Employers for Pay Equity Consortium, which supports a set of “Pay Equity Principles” designed to address pay equity issues in a wide variety of industries and companies.

Starbucks isn’t alone in this. There are a couple of dozen companies involved, including Accenture, Chobani, Deloitte, Gap, Ikea, Lyft and PepsiCo. (Starbucks just seems to have the most aggressive press agents. Good for them. They got my attention.)

What the press release got me to do was do a little research on the issue, and I ended up finding a recent Harvard Business Review piece about pay discrepancies and government-mandated transparency, which was based on what it called the “the first empirical study on the impact of mandatory wage transparency.”

This study concluded that wage transparency can “in fact narrow the gender wage gap. It also can: Increase the number of women being hired, indicating that the supply pool of female employees increases as gender pay transparency improves … Increase the number of female employees being promoted from the bottom of the hierarchy to more senior positions … Lower companies’ overall wage bills, largely by slowing down the growth of male wages.”

Now, I’m not sure that people who have suffered from wage discrimination because of gender exactly hoped that resolving the problem would mean “slowing down the growth of male wages,” as opposed to say, increasing female wages.

It also was interesting that when doing the study, HBR found that while wage transparency caused some reduction in productivity - presumably because some folks weren’t happy about this particular shift in corporate culture - that was more than compensated for by the reduction in wage costs. Again, probably not what people in the system were hoping for … they’d probably be disappointed by the productivity decrease as well as the decrease in wages.

Now, let’s be clear - not all of these conclusions may necessarily be applicable to the US. The study, after all, was done in Denmark. But HBR seems persuaded that the “research suggests that governments’ efforts to address these disparities through transparency can be effective — and beneficial to firms as well as to their female employees.”

I must be honest here. For the most part, it is hard for me to accept that in 2019, any company would knowingly sanction lower wages for women. I get that some companies probably are victims of antiquated corporate cultures that devalued women’s contributions, but there has been so much attention to this issue that it is hard to believe that any CEO has not done a deep dive into his or her company’s pay policies to make sure that everything is equitable.

Employees - of any gender- should accept no less.

Of course, it no longer is just about traditional definitions, and not just about pay discrimination.

The Human Rights Campaign Foundation is out with its Corporate Equality Index, which looks at the best places in the US to work if you are a member of the LGBTQ community. At this time, there are more than 180 US businesses that are signatories on HRC’s Business Coalition for the Equality Act; these signatories , according to the Campaign, support “federal legislation that would provide the same basic protections to LGBTQ people as are provided to other protected groups under federal law. Coalition member companies represent nearly every industry, employ over 8.9 million people in the U.S., command over $4 trillion in revenue and have operations in all 50 states.”

That’s not just mainstream. It’s also Main Street.

The campaign points out that it is an ongoing and often controversial effort: “As hundreds anti-LGBTQ bills proliferated across the states over the last several years of legislative sessions, businesses spoke out and rebuked attempts to undermine LGBTQ civil rights at record rates from state-to-state. These corporate leaders are speaking out not just on principle but also because anti-LGBTQ bills that attempt to curb access to public services for transgender people, or deny basic services to LGBTQ families, or preempt local non-discrimination ordinances ultimately put their employees and their families, as well as their customers, at risk.”

Again, it is a shame - in fact, a tragedy - that all companies and business leaders are not where they ought to be. But it is Eye-Opening, in all these cases, the degree to which some companies are embracing the moment to level the playing field and empower employees to be their best selves.
KC's View: