Opinion: A step toward closing gender pay gap

Over the course of a career, women in our region experience an average net loss of income of $327,953. Gender wage gaps are well documented, both locally and across the country. In 2017, the UC Economics Center found that in the Cincinnati region, women make 80 cents for every dollar earned by men, even when controlling for factors such as education and experience level.

The wage gap widens as education level increases, and it is even greater for people of color. Lost wages impact the ability to provide for your family and to save and build wealth over your lifetime.

One solution is on the horizon.

This week, Cincinnati City Council is considering an ordinance that, if passed, would prohibit employers from asking job applicants about their salary history during the application process. Of all the potential interventions the City could take to curtail gender pay inequity, the Women’s Fund believes this legislation is the most effective without being too onerous to businesses.

So how can this legislation help? Simply put: In Cincinnati, employees who have been underpaid will have an opportunity to reset and shed the historic pay inequity with their next employment opportunity.

The goal of this legislation is to focus employers on relying on an applicant’s skills and experience, rather than prior salary, when determining an offer of employment. This ordinance does not hinder employers from asking about a candidate’s salary expectations or from offering what they believe to be a fair wage for a given role.

Growing and retaining talent for our current and future workforce is a regional priority. In particular, there is strong desire to attract millennials and a diverse workforce, to whom gender and racial equity is of high importance. Supporting equity-focused laws, such as this one, demonstrates that Cincinnati is a competitive city for all talent and that we are committed to making sure wage inequities are minimized. 

This ordinance does not stand alone. Similar laws have been passed in twelve cities and states across the country. In a new study to be published in the Journal of Labor Economics, researchers concluded that these policy proposals will have the desired effect. They will help workers with lower wage histories get their foot in the door and help those workers obtain a better wage, without reducing hiring rates.  

Many employers, large and small, have already instituted voluntary policies to not request salary history during the job application process and this is recommended as a best practice by the Society for Human Resource Management. These companies rely on an applicant’s skills and experience, rather than prior salary, when determining an offer of employment.

We are fully aware that the passage and implementation of a salary history ban in Cincinnati is not without risk. These types of laws are fairly new, therefore we can’t predict all the unintended consequences. However, we have plenty of data right now that confirm the status quo is not working – especially for women and people of color. On balance, we believe that this law moves our community in the right direction to curb pay inequity.    

We commend the thoughtful process that was taken in developing this legislation. Over the past several months, stakeholders from all sides of the issue have been included, their concerns considered and amendments negotiated. We are encouraged by this cooperation and believe continued collaboration is critical to ensure employers, job applicants and the community are clearly informed and educated on this issue before it takes effect.

There is consensus in our region that we want an equitable community. Good intentions are not enough. We must take proactive measures to intentionally close disparities when we see them.

The Women’s Fund believes this ordinance is a tangible step forward in closing the gender pay gap in Cincinnati.  

Meghan Cummings is executive director of Women's Fund of the Greater Cincinnati Foundation.