How Can We Close Racial Pay Gaps in the Workplace?

By Mariah Flores

In Brief: (1) To close workplace racial pay gaps, we all must acknowledge the stark numbers and reality of pay gaps in the U.S., including how intersectionality can help widen the gap. (2) Understand why we’re fighting to close this gap. (3) Employers and employees need to address racial pay gaps through actionable steps including pay transparency, better negotiation practices, allyship and self-advocacy.

On average in 2020, women in the United States were paid 83 cents for every dollar paid to men. Latinx women earn 54 cents, Native American women earn 57 cents, Black women earn 62 cents, AAPI women earn 90 cents, and white non-Hispanic women earn 73 cents for every dollar a white man earns (per TIME’S UP Foundation ).

The time for equitable pay within U.S. workplaces is now, as women of color suffer the most severe gender pay gap in the country. While it’s easy to put up blinders, focusing only on your own struggles, it’s imperative to recognize that racial pay gaps in the workplace affect everyone — and the economy.?

Acknowledging The Reality of Pay Gaps

The numbers clearly show that the racial pay divide in the U.S. is very much real. While the COVID-19 pandemic exacerbated the issue , this gap has persistently been a measurable and, therefore, solvable indicator of the country’s systemic sexism and racism, according to TIME’S UP Foundation.

“We're in a space where suddenly questions about equity in the workplace are coming to the forefront. And it's not that these things weren't important before, but I don't think that there was that sense of urgency from employers and maybe employees felt a bit fearful about raising this as an issue. But fast forward to now and it's a hot topic of conversation for both employers and employees.”?

— Michelle Gyimah is a pay gaps strategist who supports human resources directors in closing their pay gaps sustainably. She has a proven track record in helping organizations take tangible actions that make a difference.?

The reality for many employees of color, including men , is that their inequitable pay makes it harder for them to make ends meet . We must also acknowledge that intersectionality creates an even greater pay gap for low-wage workers and women of color — especially due to the pandemic .?

“Wages are part of building wealth, which is the foundation of financial health. If we do not address this issue, it will continue to be a barrier for women to create wealth.”?

— Leslie Gill is president at Rung for Women . Her organization is working to address the issue of the racial pay gap by inspiring women to climb the economic ladder through career advancement and building wealth.

Understand Why We’re Fighting to Close This Gap

Wage gaps affect so many professionals and the racial pay gap is no exception. Employees of color, especially women , are forced to spend years financially catching up to their white male counterparts. Closing the racial pay gap would add money into the pockets of everyone.?

In a 2020 report, Citi estimates that racial inequality has cost the U.S. economy $16 trillion since 2000, while the failure to close wage gaps has resulted in $12 trillion in lost GDP. Closing the Black racial gap alone would add a further $2.7 trillion to the economy and could potentially advance efforts toward racial equality and gender equity.

“Women are the biggest consumers and the ones making most purchasing decisions in a household, if women were to be paid fairly it would add trillions of dollars to the economy in favor of all americans. In the case of Latinas, who are at the very bottom of the pay gap of all women, earning only .57 cents for every dollar a white man earns [from 2021 data], no matter the profession, actually the more educated Latinas are the wider the pay gap is. If a white man is able to retire at 60 years old, it would take a Latina 115 years to catch up to him.”

— Beatriz Acevedo is the CEO & co-founder of SUMA Wealth , president of Acevedo Foundation and a philanthropist. She is a passionate speaker who enjoys discussions around diversity as good ROI, female leadership, and the impact of Latinos in the American economy.

So who, beyond the government, has the power to make a difference and close the racial pay gap? Employers … and colleagues, following the steps outlined below.

Actionable Steps to Address the Racial Pay Gap

Utilize pay transparency . Both employers and employees can start embracing the new “Gen-Z trend ” of sharing their salaries, whether it be with your coworkers or advertising it to prospects. Discussing salaries with your colleagues is a wonderful way to realize that, “ Wait. Am I being underpaid?” There’s a taboo surrounding talking about pay, but modern job seekers (and employees) expect to be paid equitably for their work. Forward-thinking companies embracing pay transparency can better retain, attract and hire top talent.

“Pay transparency is the fastest way to reach pay equity. Even in a country like Mexico where I started my professional career, we had published charts with what each job at every level would make in our company, the hardest working employees would get rewarded with bigger clearly defined bonuses, but everyone started with a base published salary. It was a shock for me to find out that in the U.S. there was so much secrecy around pay and how common it was for a woman to make less than a man in the same role.”

— Beatriz Acevedo

Don’t ask any employee about past pay. An increasing number of states and local governments are making it illegal for employers to request salary history information from job applicants, in an effort to end pay discrimination. Even if it’s not banned in your locality, asking about salary information does more harm than good for Black and female employees . As an employer, you gain the upperhand when it comes time to negotiate pay with underrepresented candidates, who are most likely already underpaid at their current employer.

“[A]nother thing, and we say this for gender, but for race as well, is not asking about previous salary history. If we have the stats to back up the fact that women get paid less than men, we also have the stats to back up the fact that people of color are paid less than their white counterparts. Not asking for salary history at any point in the interview process is a really key [step employers can take].”

— Michelle Gyimah

Instead, establish equal pay for equal work, a practice Rung for Women urges employers to offer, stating that “if the role has value, it should not matter who is in that role—they should be paid the same.”

Be an ally. We often focus on what an organization can do to close the racial pay gap, but oftentimes individual employees have the power to make a difference. To be an effective ally, step outside of your privilege to better advocate for your colleagues of color. White male allies specifically have a major role to play when closing the racial pay gap, given their access to certain professional spaces.?

“Why is it always up to women to do the work to get access to an equal playing field? What we need are more white male advocates to take action around issues of equality like the wage gap. I think that means we need to continue to share our stories and keep having conversations that make the folks who benefit most from a myriad of compounding privileges uncomfortable.”

— Leslie Venetz is the founder of Sales Team Builder LLC and an established TikTok content creator (@SalesTipsTok ).

Honesty and support from individual employees can lead to greater organizational change.?

“I think if more people that are practicing allyship step up to the plate and say, ‘Here's how much I'm making,’ we'll start to see the gap close. People are going to start to be a lot more honest. And even organizations … they'll have to get in the mode of being very direct and honest about [pay].”

— Netta Jenkins is the global chief diversity officer consultant at Holistic Inclusion Consulting . She is a leading voice in the diversity, equity, and inclusion (DEI) field, having been featured in Black Enterprise, Forbes, Business Insider, Blavity, CNN and more for her work.

Practice self-advocacy. If you suspect that you’re being underpaid or still in the job offer process, it’s time to head into negotiations for better pay conditions. Negotiations are not easy, but can become easy when you’re armed with confidence, practice, research and even coaching.?

“Do your homework, research what [your] role pays in the market from a comparable company, and also learn from good negotiators (if they are willing to share), what [a company’s] bonus structures look like, continuing education opportunities, flexible work schedule, etc. It’s not just about the salary but the complete package and what is important and of value to you.”

?— Beatriz Acevedo

Also, take into consideration your own accomplishments, writing them down so you can easily present them to human resources or upper management.

“Whenever one is advocating for themselves, you really want to make sure that you really take account of the work that's being done. So what is the impact of what you're doing? How does it push the business or propel the business in the right direction? How does it align with the business goals? And once you're able to really dissect that and understand that, it's much easier to articulate it when it's written down.”

— Netta Jenkins

And finally, Gyimah recognizes that pay advocacy and negotiations can be a rather emotional moment. In order to operate clearly, she recommends taking a moment to understand why you’re even advocating for yourself in the first place.

Explore more

• Why Black workers still face a promotion and wage gap that’s costing the economy trillions by Courtney Connley for CNBC
• Women are still paid 83 cents for every dollar men earn. Here’s why by Greg Iacurci for CNBC
• Quantifying America’s Gender Wage Gap by Race/Ethnicity by National Partnership for Women & Families
• The economic impact of closing the racial wealth gap by McKinsey and Company
• How a Common Interview Question Hurts Women by Claire Cain Miller for The New York Times
• Women of Color and the Wage Gap by Robin Bleiweis, Jocelyn Frye and Rose Khattar for The Center for American Progress (CAP)
• Equal Pay Counts: What Companies Can Do by Lean In
• 2022 State of the Gender Pay Gap Report by Payscale
• Black women aren’t paid fairly by Lean In
• What Is Pay Transparency? by Mariah Flores for Get Ahead by LinkedIn News
• Race and the Pay Gap by AAUW

Meet the experts?

Beatriz Acevedo is the CEO & co-founder of SUMA Wealth , president of Acevedo Foundation and a philanthropist. She is a passionate speaker who enjoys discussions around diversity as good ROI, female leadership, and the impact of Latinos in the American economy.

Leslie Gill is president at Rung for Women . Her organization is working to address the issue of the racial pay gap by inspiring women to climb the economic ladder through career advancement and building wealth.

Michelle Gyimah is a pay gaps strategist, specializing in supporting human resources directors to close their pay gaps sustainably. She has a proven track record in supporting organizations to take tangible actions that make a difference.

Netta Jenkins is the global chief diversity officer consultant at Holistic Inclusion Consulting . She is a leading voice in the diversity, equity, and inclusion (DEI) field, having been featured in Black Enterprise, Forbes, Business Insider, Blavity, CNN and more for her work.

?Leslie Venetz is the founder of Sales Team Builder LLC and an established TikTok content creator (@SalesTipsTok )

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