International Women's Day: How fixing the wage gap for Women of Color benefits us all

The theme of this year’s International Women’s Day is #EachforEqual. It’s an individual and collective invitation to “broaden perceptions, improve situations.” Since the World Economic Forum’s Global Gender Gap Report 2020 tells us we are 99.5 years away from global gender parity - we can spare a day. (And since International Women’s Day is 109 years old, maybe we need more than one day a year? Gender parity isn’t Brigadoon.)

A recent McKinsey report on women in financial services sparks ideas about how we can bring #EachforEqual to life in the insurance industry. 

We already know the gaps in representation: women in insurance, more than 50% at entry level, only make up 20% of the SVP level and 18% of the C-Suite. But let’s look deeper. The gap is a slow slide off the chart for white women, but the drop off in representation for women of color is precipitous, and it starts immediately between entry and manager level.

Women of color “virtually disappear” at the higher levels. It’s called Intersectional Invisibility. (It's terrible to think of a human just disappearing. No wonder Black Women, for example, report an “Emotional Tax” on health and ability to thrive at work.)  It’s long overdue to acknowledge the work of these women.

The best way to do that is by addressing the pay gap. According to a 2018 report, women in insurance earn 62 cents on the dollar, “even worse than the pay gap in 1951” (NB: Brigadoon premiered in 1947!). When we look closer, the gender pay gap is widest for Black women, who “have to earn a Master’s degree to make slightly more ($56,072) than white, non-Hispanic men with just an Associate’s degree ($54,620).” This means that “over a 40 year career, a typical Black woman loses a staggering $840,040 to the wage gap.”

This specific gap should be our starting point. A deep and transparent analysis of the pay gaps in the insurance industry would provide facts we could use to shape an intelligent strategy for correcting the disparity, starting with the pay of Black women and working our way through wider categories. The benefits would be industry-wide.

As I have said before, the business case for diversity and inclusion has been made.  What kind of collective momentum would we gain if we prioritized solutions for women of color?

1)    A rising tide lifts all boats!

The data show that a diverse workforce produces better results, which generate better compensation for all. Diversity informs RFP and IPO decisions, so we know attracting, retaining and developing diverse talent is essential to our success with customers. This requires equitable pay, which also is something investors track.

2)    We can make meritocracy a reality.

We all agree that pay for performance is essential. Let’s ensure that applies to everyone (investors are watching!). Closing the pay gap means compensating those top performers who have been underpaid relative to their performance. And women are performing: Catalyst reports an array of statistics around women’s strong performance scores. Moreover, McKinsey reports that women of color express greater ambition and hold themselves to higher standards. In a Harvard Business Review study, Black female executives displayed increased resilience and strategic ingenuity in navigating career challenges. The performance is there; pay should follow.

3)    Improving workplace culture increases productivity.

Transparency in salaries and eliminating disparities, would build employees’ trust of the institution. It would also uncover overtly discriminatory practices and implicit biases. Eliminate those and we reduce risk and increase productivity. Remember that Emotional Tax I mentioned? I would love to see what my Black female colleagues – already so accomplished – could achieve without disrupted sleep patterns and with an improved sense of health and wellness at work.