What the Wage Gap Means for Latinas
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The wage gap between Latinas and everyone else is the greatest. The community suffered from high mortality rates and negative business consequences during the COVID-19 pandemic. If companies commit to salary reviews and pay transparency, equal pay can arrive faster.?
By Ciarra Maraj
Latinas are the lowest earners in the country. From workers in the service industry to STEM, Latinas earn less than their counterparts and lose $1 million each during their careers.?
Overall, working Latinas receive 51% less pay than their white male counterparts and 31% less than white women. The earning ratio between white men and Latinas rose a mere four percent between 1988 and 2019, according to the American Association of University Women (AAUW). The median salary for white men in 2021 was $61,740 compared to $39,511 for Latinas.?
Why is achieving financial mobility and closing the wage gap difficult??
“Because the workforce was built for white men,” said Jasmine Escalera, a career and confidence coach for women of color. “...And I think systemic racism and sexism and all of the isms exist in every single infrastructure and structure within this country. And so I just think that this will, in general, not be completely obliterated until we really look at the systemic issues that this country has around race and around gender and around equity.”?
Women do not negotiate as often as men and are in “pink” collar roles thought to deserve lower salaries, but are underpaid even in the same job. Pay transparency will help close the stubborn wage gap. Laws requiring salary ranges in job postings will go into effect on Nov. 1 in New York City and Jan. 1, 2023, in California.
The COVID-19 Pandemic Worsened The Wage Gap
Wage gaps joined the list of pressing systemic issues during the pandemic.?
Latinos had a higher COVID risk because 53% worked in-person jobs. Though the numbers are incomplete, as of Oct. 5, 2022, over 150,000 working-age Latinos across the U.S. died from COVID-19. Mortality and unemployment rates increased as the wage gap widened.?
Before the pandemic, the unemployment rate was 4.8%, and by the third quarter of 2020, the jobless rate peaked at 12.5%, AAUW reports. As of September 2022, the Latina unemployment rate was 3.6%.?
Eliminating salary disparities can increase income by 35% and bring over 1.1 million Latinos into the middle class, a McKinsey and Company study found . Equal pay would increase the economy and morale of those underpaid. The question remains: if delivering equal pay solves socioeconomic issues, why is it not happening??
“Well, it's because there are false perceptions that exist in our communities and their perceptions based on maybe how they were raised by their own parents or maybe the bosses that they were mentored by,” said Ramiro Cavazos , president of The United States Hispanic Chamber of Commerce. “That mindset was integrated into their own mindset. We mentors make the difference in our society. Our parents make a big difference. How you're raised, how you're trained affects your outcome as a human being.
“… And I believe that's why organizations like ours, we need to preach, rather than talk to people, we need to let them know. And, the beauty of this is the data backs up the facts…equal pay is actually a very important and essential thing to grow the economy and your workforce. It's not a ‘would like to have,’ it's a need to have.”
Some CEOs may not see the value in paying everyone a fair rate. Cavazos said that is a shortsighted view.?
“The folks that don't pay equal wages, they think, ‘Well, I'm gonna spend money that I shouldn't spend to make someone have equal pay with someone else,’” Cavazos said. “What they don't realize is that difference is in the positive, [it] would be an investment in their company's own future, in their workforce future and the future of the U.S. economy. In turn, those same people you're paying more would be better customers for your own company because they would have more disposable income. So it's a better economic cycle overall.”
Be Empowered to Take Action
Growing up in scarcity can create negative thoughts about money and how much you think you deserve. Escalera suggests examining your relationship with money by asking yourself: “How do I perceive money, and what limiting beliefs need to be released?”?
“I think that as women of color, as women, as Latinas, we don't think the max, it's just not normal for us to,” Escalera said. “We think about what we need to survive and we have to be more cognizant and conscientious of adding more money in there so that over the long term we are making truly what we deserve.”?
Cynthia Pong , a negotiation coach for women of color, echoes the importance of your mindset because having a lack of confidence shows.???
“The first negotiation really is with yourself,” Pong said.
Once your mindset is in check, research how much your industry pays. Use Glassdoor or salary.com. Consult others in the field; this is why pay transparency is a step forward, it starts the conversation.?
But Escalera has an alternative tip:
“Ask the white man,” she said.?
“I learned about salary negotiation actually, from an amazing white male ally who when I was talking about money, was just flabbergasted that I had not negotiated,” Escalera added.?
Never take the first offer when negotiating. Counteroffers do not assure an initial offer will be rescinded.?
“I think it's also important that as Latinas, as women of color, as women, we also are very cognizant of the pay gap, and we also add the tax in,” Escalera said. “So it is OK for you to add in more because you know that there is a pay gap where you are making close to 50% less. So that's something that I also always like to talk to my clients about is, don't put a cap on yourself.”?
Take your time with money decisions.?
“I wouldn't negotiate on the spot,” Pong said. “You always want time to think. So thank them for the offer. Be super enthusiastic about the offer and the role and the organization and stuff, and then let them know that you'll get back to them. You don't have to give them a deadline on yourself.”?
Negotiating is not a one-and-done process, Pong added.?
As you move up, your salary should too.?
“What are you bringing to the table that is different than another candidate? And we all have that dopeness within us,” Escalera said. “We all have those great things that we can contribute to a job. So you have to be very connected to your skills, your strengths, your almost kind of like unique attributes.”?
Companies need to do their part to meet in the middle. Competitive salary means a wage above the market rate, not specific to co-workers. Conduct salary reviews and make commitments to posting salaries on job descriptions highlighting wages of certain positions, Escalera said.?
“I think that would be massive because it would help us really to not have to put the onerous [task] on us to do all of this work,” Escalera said, “To try to figure out what people are making and then what we should make. If companies really did do this, this would be a game-changer.”?
Avoid using equity as an excuse not to pay Latina women what they deserve.?
“I'm so tired of hearing from clients that they asked for a raise, advocating for a higher part of the salary band — which they deserve based on their work, contributions, expertise — and being told they can't get that [because] of equity," Pong said. “Because the others in that same role are only being paid $X. Equality is not equity. Just because the other folks doing the same role are capped at a certain amount doesn't necessarily mean that should limit a high-performing WOC's earning potential. We will never close generational wealth gaps if WOCs continue to be held back in these ways.”
Representation is required for a genuine effort to enact change. Two Latinas are CEOs of Fortune 500 companies. Promote your underrepresented talent and empower them to apply for higher positions even if they do not check all the “boxes.”??
“If you put people in these positions that are younger, that have different views and understand the importance of equal pay for our community, and then also gender balance, it'll accelerate that change in my opinion,” Cavazos said. “So, ‘A rising tide will lift all boats’ is a great saying to really summarize the fact that the more of us that are in positions of power but decision-making roles where we make payroll decisions, hiring decisions, the quicker will have equal pay.”
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What the wage gap means for Latinas?