Seattle-based PayScale leads on wage gap research

Photo courtesy PayScale

Founded in 2002, wage analytics company PayScale boasts the world’s largest salary profile database, used to aid individuals and companies in understanding compensation at their organizations. PayScale’s data is also the source for comprehensive research on issues such as the wage gap facing women and people of color.  

PayScale’s focus is on crowdsourced data—individuals fill out a survey with information on their job title, salary, past positions, level of education, and more. Since its founding, the company has grown to over 400 employees spread across several offices, including the roughly 300 employees housed in its Seattle headquarters.   

“We feel very lucky to be in Seattle,” says Lydia Frank, PayScale’s Vice President of Content Strategy. “It has been great for us from a talent perspective, and also I think Seattle is a place where a lot of these issues around compensation, like minimum wage, CEO-to-worker pay ratios, pay inequities, are talked about a lot. It’s a good place to be for us for business.” 

PayScale’s large crowdsourced data set provides a unique opportunity for research. Frank is proud of PayScale’s work on gender equity, explaining, “When we started to do research on the wage gap, there was a pretty common objection to there even being a wage gap. We’re a data company, we can answer this question with data. There’s tens of millions of people who have filled out the survey—there can be no doubt that we have a big enough sample.”  

What does that sample show? First, PayScale has addressed the myth that the wage gap disappears when you account for the fact that women are underrepresented in leadership roles and in high-paying fields such as tech. PayScale’s data does show that the wage gap shrinks significantly when controlled for “equal pay for equal work” within similar job titles and industries. But even when controlling for factors besides gender, they found that the wage gap persists, and it grows larger as women progress further in their careers.  

It’s also a bigger problem in certain industries: “oil and gas for example, when you control for everything you could possibly control for and it’s literally women and men with the exact same job, the percentage difference was over 7%,” according to one of PayScales’ analyses.  

PayScale provides companies with a gender pay gap analysis feature, so that companies can easily identify pay discrepancies within their organization. PayScale uses this tool to analyze pay equity within their own company and shares the data with its employees. They also recently began partnering with 100% Talent, a regional effort to eliminate the wage gap in Seattle and King County.

Solving the wage gap issue is complicated, says Frank. “It’s solving the leaky pipeline in STEM. It’s solving women not getting promoted to director and VP and C-Suite positions at the same rate as men, and that’s not an overnight problem.” But she is still optimistic, saying, “I’m proud that we can use our data for good in that way, to help dig in on the problem and help companies and individuals understand it better, so we can get to solutions.”  

Women of Color and the Fight for Equal Pay

The gender wage gap is an economic and equity issue. Data shows that women are systematically paid less than men. Unfortunately, pay discrimination is common, and an indicator of systematic imbalances in the United States. However, many fail to address the nuances of the gender wage gap. The dialogue is commonly centered around pay discrimination in relation to white women, but this often overlooks the unique challenges facing women of color. The gender wage gap is an important discussion to have, and it’s crucial to address that women of color are paid significantly less than their white female and male counterparts. Latina, Native American and Black women are among the lowest paid people in our country. This isn’t a result of individual discrimination, but rather a larger institutional form of discrimination that exists.

Individual discrimination would imply an isolated incident, the result of one openly bigoted person. This isn’t the case for issues like the wage gap. The gender wage gap is the result of discrimination in hiring and promotions, sexual harassment, and bias against mothers. The same widespread discrimination pertains to race; people of color don’t have access to equal opportunity to be hired or promoted. This is a form of institutional discrimination, and it’s incredibly prevalent in our workforce.

For women of color, the wage gap isn’t just a gender equity issue – it’s a race issue. The wage gap needs to be addressed through an intersectional lens. Women of color are challenged with racism and misogyny at an institutional level, leading to lower wages. White women working full time receive 70 cents to every dollar a white man makes. Meanwhile, Latina women working full time receive 54 cents, Native women working full time receive 57 cents and Black women working full time receive 63 cents; these women would have to work up to twice as much as their white male counterparts to receive equal pay.

All industries have this problem, Seattle tech companies included. Catalyze Seattle conducted a study measuring the wage gaps within Seattle startups. The study found that Seattle startups have a gender wage gap of 10%, and a racial wage gap of 15%. Employees who identified as people of color earned approximately $90,130 – while the white respondents made $106,000 on average. If women and people of color are being paid less, it’s not difficult to deduce that women of color are being paid significantly less than their white male counterparts in Seattle.

When discussing ways to improve the wage gap, equity should be at the center of the conversation. There is a common misconception that equality and equity are interchangeable terms, but they aren’t. Equality is rooted in sameness, while equity is rooted in fairness. Equality is giving everybody the same help, without addressing their advantages and disadvantages. If sprinters racing on an oval track all began at the same place, the runners closest to the center of the oval would have the unfair advantage of running a smaller distance. This is equality. Because that would be unfair, the runners begin the race based on how close they are to the oval. This is equity. Equity aims to give marginalized people the same access to wealth and opportunity as their more advantaged counterparts.

There has been progress in recent years to close the gap. The software company Salesforce spent 3 million to close the wage gap in their company. After initiating a companywide review of salaries, and analyzing “unexplainable differences,” the company gave 6% of their employees a raise. This didn’t financially hurt the company in any way. By addressing the issue and aiding disadvantaged employees, Salesforce has taken a step in the right direction. Companies such as Apple and Facebook have taken similar steps in closing their wage gaps. Employers should be encouraged to address the issue and engage in equitable practices. For women, people of color and especially women of color to feel like valued employees – the gap needs to be closed.