Whether it’s the result of political pressure or wanting to stay ahead of progressive trends, a number of larger companies are conducting internal audits to investigate whether they could be accused of having a so-called pay gap between men and women.
Google conducts such an audit every year, and this
year produced a surprising result. According to The New
York Times, Google’s analysis found that more men than women were
As a result, Google will award $9.7 million out of a compensation
fund, the majority of it going to men. The fund was established to remedy
compensation gaps revealed by the annual study.
The study’s results conflict sharply with analysis
conducted by the Labor Department, which is currently investigating the tech
giant. Janet Herold, regional solicitor for the Labor Department, said
her department’s analysis at this point indicates discrimination against women,
and that this discrimination is “quite extreme.”
The Labor Department is also suing
Google to force it to hand over data that Google believes reveals confidential
information and violated employees’ privacy.
Google is also facing an employee-led
effort that claims the company significantly underpays women
compared to men.
So who’s right? Google, its employees, or the
Well, it depends on how you measure pay between
Across the U.S., broad-based pay comparisons show that
women make 20 cents less on the dollar than
men. But after accounting for important factors such as one’s education, hours
spent at work, occupation, and experience, the gap drops to between 3 and 5 cents. And even that
doesn’t account for harder-to-measure factors.
The government has little insight into the day-to-day
operations of Google and has to rely on limited and abstract data, such as job
title, pay, gender, and race. This means government reports are less likely to
paint an accurate picture of employee pay according to work performed.
And how about the employee-led effort? It only included
self-reported pay data from 2 percent of Google’s global workforce and was
divided across six broad pay levels.
Clearly, the government’s analysis, as well as the
employee-led effort, are lacking. They essentially assume that all employees
with the same job title perform identical jobs, when in fact that is not the
Google is not a 1950 assembly line where all employees clock in at 9 a.m., produce 50 widgets, and then clock out at 5 p.m. It is a diverse and complex company in which job titles may say little about the work an employee does.
While the government and employee-led studies are
limited, Google itself performed a more detailed analysis. After all, the
company knows a thing or two about analyzing data.
Google presumably included important factors in its
analysis that affect pay, such as years of experience, education, hours, and
some measure of performance.
Even so, this did not create a true apples-to-apples
Nor could it. In today’s day and age, with more
flexible job schedules, highly diversified job functions (even within a given
title), and broad compensation packages, very few jobs are truly
The problem with top-down government controls that
attempt to equalize pay across gender or race is that those policies could end
up hurting the people they intend to help.
For starters, policies like the Paycheck
Fairness Act threaten to take away decades of gains women have made
in the labor market by eliminating more flexible arrangements, and instead
jobs, schedules, and compensation packages that may not actually fit
women’s needs and desires.
Moreover, expensive lawsuits encouraged by such
legislation would likely cause employers to discriminate against women in the
hiring process—thus protecting themselves against potential gender-based
At the end of the day, most workers—men and women
alike—want to be paid based on what they produce. That’s not possible with
government-imposed pay scales.
Instead of telling companies how
much to pay their workers, and limiting the types of jobs available to women
(and men), lawmakers should work to reduce barriers and burdens for job
creators and support women in the choices they make for themselves.
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