PayScale’s vice president on the results: “We’re not seeing a difference in who’s asking, but we’re seeing a difference in who is receiving” raises.
People of color are significantly less likely than white men to receive a raise after asking for one, despite the fact that no single gender or racial group is more likely to ask for a raise than any other.
That’s one finding of a report from PayScale, a firm that tracks and studies compensation data. The report showed that women of color were 19 percent less likely to have received a raise than a white man, and that men of color were 25 percent less likely.
Based on the study’s 160,000 respondents from November 2017 to April 2018, Lydia Frank, vice president at PayScale, said “we’re not seeing a difference in who’s asking, but we’re seeing a difference in who is receiving.”
“With these results, it’s very obvious that unconscious or overt bias is playing a role here,” Frank said.
The report also found that men and women had different reasons for why they did not ask for raises in the past. Men were more likely than women to say they hadn’t requested a raise because they either had received one without asking or because they were already content with their salary. That’s compared to women who were more likely than men – by 9 percentage points – to say they hadn’t asked for a raise because they are uncomfortable negotiating salary.
The report found that the most common reason given to employees for why they did not receive a raise was budgetary constraints, at 49 percent. Yet one third of workers said that when they were denied a raise, no rationale was given at all.
Valerie Wilson, director of the economic policy institute’s program on race, ethnicity and the economy, said the report challenges criticisms that people who don’t receive raises aren’t aggressive enough in negotiating a pay raise.
“It bolsters the fact that pay gaps are real, they’re not imagined and they’re not the fault of the people who are unpaid,” Wilson said.
The report found that when workers aren’t given explanations for being denied a raise, or when they don’t believe the reasons given, they are less satisfied at their current jobs and are more likely to quit.
Still, Wilson noted that the consequences of being denied a raise can linger for an entire career by hindering workers’ ability to change between jobs or move up into a job that pays more.
Women and people of color suffer disproportionately from pay gaps starting with their first salaries, said Kimberly Churches, chief executive of the American Association of University Women. From those first jobs, white men are often given larger salaries and responsibilities because “we feel in our society that these are men’s roles.”
“When you start out with your very first job earning less than a man, and then a man is given a pay raise, you can see how this compounds over time,” Churches said.
Churches added that Hispanic women were paid 54 percent of what white men were paid, according to U.S. Census Bureau data from 2016. Black women earned 63 percent of white men’s earnings.
A fundamental way for companies to address pay gaps is to boost transparency around employee salaries, Frank said. That includes concrete policies that show all employees what everyone else makes, or that mandates that companies share market data used to determine salaries. (A new law in Washington state modifies the state’s Equal Pay Act by making it unacceptable for employers to retaliate against employees for asking about their wages or the salary of other employees.)
Churches added that companies should also allow employees to talk about their salaries with one another, and that companies should publish the findings of regular pay audits.
Still, at the core of the issue, Churches, Frank and Wilson agreed, rests the toxic and historical consequences of bias and discrimination toward women and minorities.
“There are many ways to state it or phrase it, but that is discrimination,” Wilson said. “That’s clearly what’s going on, and this is a reality of the American labor market.”