Testimony: Expanding Pay Transparency to Address the Gender and Racial Pay Gap
Hilary Wilson
Thank you, Chair Williams and members of the Committee, for the opportunity to testify today. My name is Hilary Wilson and I am a senior policy analyst at the Community Service Society of New York (CSS), a leading nonprofit that has championed a more equitable city and state for over 175 years. Through research, advocacy, and direct services, CSS works to address the most pressing issues facing low-income and working New Yorkers including racial and gender-based inequities in compensation.
In 2022, we joined workers’ and women’s rights organizations in advocating to ensure that New York City’s historic salary range transparency law – Local Law 32 – maintained broad applicability to businesses with four or more employees. In my testimony today, I will focus on why, despite having made important progress, the City must now expand the scope of pay transparency by passing Intros 808-A, 984, and 984.
As you will surely hear from others testifying today, women in New York City currently make only 93 cents to every dollar earned by their male counterparts.[1] And the situation is worse for women of color: for every dollar earned by white non-Hispanic men, black women earned only 52 cents and Latina women only 47 cents. These gaps in pay contribute to gaps in savings and wealth, making women and people of color disproportionately vulnerable to unexpected economic shocks and unable to save sufficiently for retirement. In a recent CSS report, we found that women in New York City are more than twice as likely as men to have no savings set aside for a rainy day. Women are also under more financial stress and are more likely to experience employment losses due to caregiving responsibilities.
These disparities persist despite the existence of strong equal pay laws at the state and local levels, suggesting a need for additional policy interventions. Studies show that even when controlling for things like education, experience, and industry, women and people of color still earn less than their white male counterparts, suggesting that discrimination and bias continue to play a role in how employers set wages. Salary range transparency requirements and salary history bans, like those that exist in New York, remove some of this bias for job seekers and have been shown to boost the earnings of hired workers. However, despite existing employees having the legal right to discuss pay with their coworkers, information on compensation remains out of reach for many because of a persistent and pervasive culture of secrecy around pay.
Intros 808-A, 982, and 984 address this problem head on by taking the burden of uncovering pay information off of individual workers and by affirming their right to know whether they are being paid fairly. Opponents of the salary range transparency bill argued that the requirement would be onerous for smaller establishments, but we now know that compliance with the law has been nearly universal. It’s my understanding that Councilmembers Caban and Farias plan to amend their bills to require businesses with 100 employees or more to report pay data. According to our analysis at CSS, there are a total of 5,354 business establishments with more than 100 workers in New York City.[2] This represents just 2.3% of all business establishments in the city. Moreover, those businesses with operations in California, Illinois, or abroad in places like the UK or the EU are likely already reporting data on pay, as these places have their own pay data reporting laws on the books.[3] In short, businesses of this size likely already have the capacity and knowhow to collect pay data as proposed in the bill.
Robust pay transparency is not only beneficial to workers, who are better equipped to advocate for themselves and one another when armed with critical information, it is also good for business. Studies have shown that when businesses disclose salary ranges in job ads and report broader data on pay, they are able to attract the talent best suited to their needs. It is past time we closed the gender and racial pay gap – these bills will help us get there.
Notes
1. CSS analysis of U.S. Census, ACS 1 Year S2001 Earnings in the Past 12 Months (in 2023 Inflation-Adjusted Dollars).
2. CSS analysis of County Business Patterns data for 2022, as made available by the Census Bureau
3. PowHer analysis of select UK-mandated pay gap reports