National Equal Pay Day – Celebrating Workplace Flexibility

Have you ever had a job where you found out weeks, months, or even years after starting that you were being paid less than your coworkers? Did it hurt to learn that, despite doing the same job, you were taking home thousands of dollars less per year?

That’s what one-half of the American population has felt for a very long time. According to the National Committee of Pay Equity, women have to work a year, two months, and fifteen days to make what the average man earns in a single year. It’s time for things to change and that time is now.

As a socially conscious financial technology company, we wanted to recognize all the hard-working Americans deserving of pay equality today. How is it 2022 and women are still earning 84 cents for every dollar earned by a man? The numbers drop when we look at Latina, Native American, and Black women. These groups earn just 55, 60, and 63 cents respectively for every dollar white, non-Hispanic men make. Why?

To learn more, read on and let’s get to the bottom of this unequal pay gap.

Getting to the bottom of the gap

A 2016 episode of Freakonomics Radio called, “The True Story of the Gender Pay Gap” shared some incredible insights that we’d like to highlight for the remainder of this post. In the episode, host Stephen J. Dubner interviews Anne Marie Slaughter, a notable public-policy scholar and author of “Unfinished Business”. When Dubner asks Slaughter why she believes the pay gap continues to exist year after year, she shares the following:

“If you take women who don’t have caregiving obligations, they’re almost equal with men [financially]. [They earn] somewhere in the 95 percent range [of what men make]. But when women then have children [or elderly parents]… they need to work differently. They need to work flexibly, and often go part-time. They get less-good assignments because their bosses think that they’re not going to want to work long hours, [do work that makes them travel, or do work that makes them stay up all night]. If you’re working part-time, you don’t get the same raises and if you’re working flexibly, your boss typically thinks that you’re not that committed to your career, so you don’t get promoted.”

In other words, the pay gap widens when an employer misreads a female employee’s need for flexibility (to care for someone else) as underperformance at work. Women themselves will choose career paths that may not pay as much, but allow for more flexibility. Pay gap researchers call this type of work flexibility, “temporal flexibility”.

While men and society as a whole are slowly distributing caregiving duties away from women, the data says that the unpaid work of familial caregiving still largely falls on women’s shoulders. In an article in Vox about the mixed blessings of working from home, Rani Molla writes, “Women need more flexible work arrangements, because women have more to do.”

What does the pay gap look like in industries where shifts and other types of flexible scheduling is commonplace?

Dubner goes on to interview Harvard University professor of economics, Claudia Goldin, about her groundbreaking pay gap research. When looking at census data of workers who made more than $60,000 a year, Goldin found that the industries with the largest pay gaps were in the corporate and financial sectors. In contrast, the industries with the smallest degree of pay gap were in technology, science, and health.

If you think about the types of jobs within these industries, Goldin’s findings make a lot of sense. Many technologies and science jobs can be completed from anywhere, anytime. The healthcare industry operates on a shift system that offers substantial levels of temporal flexibility. On the flipside, a lawyer or investment banker might require childcare in order to work long hours in an office or to travel for work. While many exceptions to the previous statements exist, the data shows a direct correlation between temporal flexibility and a thriving female workforce.

In a lecture given to the American Economics Association in 2015 titled, “A Grand Gender Convergence: Its Last Chapter”, Goldin writes,

“The solution does not (necessarily) have to involve government intervention and it need not make men more responsible in the home (although that wouldn’t hurt). But it must involve changes in the labor market, in particular how jobs are structured and remunerated to enhance temporal flexibility. The gender gap in pay would be considerably reduced and might vanish altogether if firms did not have an incentive to disproportionately reward individuals who labored long hours and worked particular hours. Such change has taken off in various sectors, such as technology, science and health, but is less apparent in the corporate, financial and legal worlds.”

A strong female workforce needs flexible scheduling

Options for many women can feel limited, especially when skyrocketing costs of childcare are factored in. The idea of temporal flexibility would explain why so many women left the workforce when the Covid-19 lockdowns removed third-party care providers as options for families.

As women continue to seek out jobs that offer both high pay and temporal flexibility, today’s competitive hiring market might be a catalyst for change. Employers competing for talent are offering shorter workweeks, paid family leave, and earned wage access to attract workers.

While we know that it’s impossible for all industries to offer temporal flexibility, many companies are updating their approach to meet the moment. Companies who still reward arbitrary employee attendance hours over performance should study how temporal flexibility lead to the billion-dollar success of Bumble.

Accommodating and promoting female employees might also give companies a unique edge in the market. When employers value the commitment and creativity it takes to perform caretaking roles many women and men play, it can change everything.

Payactiv invented Earned Wage Access (EWA) to help alleviate some of the unnecessary financial stress that people experience living paycheck-to-paycheck. This financial stress is still disproportionately affecting women more than men. EWA can help bridge that gap between paychecks to help pay for unexpected childcare, transportation, medical expenses, or whatever life throws your way.

If your employer offers Payactiv, you can access your earned wages between paychecks. In the market for a job with more flexibility? Check out our new in-app job boards to find a job that offers Payactiv EWA. In the meantime, anyone can download the Payactiv app and start using the free budgeting and planning tools, bill pay, and exclusive discounts for everyday things like gas and Rx medicine.

At Payactiv, we’re working to create more financial flexibility for millions of employees living paycheck to paycheck. That’s why we support temporal flexibility, flexibility of pay, and access to better financial services in order to build a resilient workforce.

Happy Equal Pay Day from Payactiv!