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How to Get Companies to Stop Lowballing Women

A new proposal to ban salary histories is one small step toward ending a systemic problem.

Oli Scarff/Getty Images

Being asked to provide a salary history is often the scariest part of the hiring process. Do you put down your actual salary? Do you lie in the hopes of getting more money? But policy-makers have started to see this not just as an inconvenience, but something that perpetuates inequality in the workplace.

Legislators in Massachusetts this summer banned salary histories in an attempt to reduce structural biases that result in higher pay for white men. The policy has since been proposed in the country’s largest city, New York, and will soon be introduced in the country’s capital. California and Colorado have also considered it.

The idea is simple. Employers would not be allowed to ask a job candidate what he or she previously earned until after a job or salary offer is made. Since women and minorities tend to earn comparatively lower pay, when employers make offers based on past salary, any discrimination or unfair wage depression gets passed on like an infection. Banning salary histories would cleanse the process, forcing employers to come up with an offer based on what they think a particular candidate or position is worth.

It’s a new enough concept that it’s impossible to know with any certainty what effect it will have. But its quick ascent has already started a debate. In The Washington Post, Catherine Rampell recently argued that such a policy will do nothing to help women and people of color, and may even end up doing more harm than good. But the truth is that while such a policy isn’t a panacea for longstanding prejudices, it does have the potential to minimize discrimination in the workplace.

A core part of Rampell’s argument is that similar efforts to keep employers from seeking other information have produced questionable results. Perhaps the most notable are so-called “ban the box” laws that bar a company from asking about a prospective employee’s criminal history until after an offer is made. Such laws are meant to prevent employers from unfairly shutting out past offenders from the job market even if they’re qualified for a job.

And those policies are working. Numerous analyses have found that, in places where these laws have been implemented, far more people with criminal records have been hired than before.

But two recent studies cited by Rampell throw a bit of cold water on the idea. While ban the box does eliminate discrimination against people with records—contra Rampell’s assertion that it “doesn’t actually help ex-offenders get jobs”—it may backfire by reducing job opportunities for men of color, since it leads employers to racially profile them and assume they have records in the absence of concrete information.

One study found that banning the box decreased the chances of getting hired for young black and Hispanic men who don’t have a college degree. That’s troublesome, and may indicate that some employers who can’t know for sure which applicants have criminal histories simply assume all young, undereducated men of color do. But it’s also not the full story. The study found that ban the box policies increased employment for black men between the ages of 35 and 64 and black women with college degrees, which together make up a larger share of the overall black population.

The other study, which submitted fake resumes to job openings in New York and New Jersey, found that employers had indeed been discriminating against people with criminal records, and that the discrimination was eliminated by ban the box laws. It also found, however, that white applicants saw a big increase in callbacks after the laws went into effect, widening the gap with black applicants. That’s largely thanks to white applicants with a record getting a better shot at a callback than before—so the law is doing what it should be doing, for one group at least. Mostly, what it found is that New Jersey employers appear to be particularly racist.

Which gets to the larger question: Can these kinds of laws combat huge, systemic problems like racism and sexism? The answer is obviously no. Ban the box keeps employers from unfairly judging someone by his criminal record, but it can’t keep an employer from being racist. Similarly, a ban on salary histories will keep employers from cementing past pay discrimination, but it won’t keep them from undervaluing women and people of color all on their own.

Indeed, the gender wage gap, the most studied and controversial of pay differentials, exists at least in part because women are just not valued as highly. Women fresh out of college in their first jobs make less than men even when they have the same credentials—major, university, grades. They will go on to make less in virtually every job they choose. In fact, if a swell of women enters a particular occupation, the pay drops. Some of the difference in pay between the genders is due to women ending up in lower-paying jobs or taking time out of their careers to care for family—but not all of it.

You could argue this is because women don’t negotiate as well as men for their starting salaries, so it’s their fault if employers keep giving them low offers. But that doesn’t account for the fact that women often do ask for more money—they are just penalized when they do, since it violates gender norms.

If a woman who gets paid less in her first job continues to have her pay based on previous earnings in every subsequent job, how can she ever outrun it?

It’s true that banning salary histories is not a silver bullet. As Rampell points out, employers may still lowball women and people of color even without a salary history to go on. Eliminating the gender wage gap is an enormous project, one that would require not just policies aimed at transparency, such as banning employers from telling workers they can’t discuss pay between themselves, and strict penalties to discourage unequal pay. It would also take a slew of proactive steps.

One might be the other part of Massachusetts’s new law, which got far less coverage in the press: mandating equal pay for comparable work, not just identical work. The idea was actually tried in the ’70s and ’80s: State governments reviewed their own pay scales to see whether women who were basically performing the same kind of work as men in different jobs were being paid less (think of housekeepers making less than car cleaners). They found the answer was yes, so they increased those women’s pay—and in the process reduced the gender wage gap by nearly 20 percent. A national policy could have brought it down by over a quarter.

It will also take measures that level the playing field for women at work who are still saddled with most of the labor at home. Paid family leave and affordable, consistent child care, for example, both boost women’s wages.

These are all big and politically unlikely priorities, however. Banning salary histories is a much smaller, more quickly achievable ask.

Rampell’s final concern is that job applicants will suffer if employers drag their feet in the hiring process because they have to come up with a salary offer on their own. It will certainly take some adjusting on the part of employers. But relying on the shortcut of past compensation to determine the true value of a job or candidate is not a defensible choice—it’s lazy. If companies want an easy out, they can do what others have started doing and just take salary negotiations out of the process altogether.

Getting rid of salary histories is not going to end unfair pay. But it can eliminate one particular barrier to equal compensation facing women and people of color—and there’s just no good reason to keep it in place.