I was asked about my past wages in a job interview. So what’s the problem?
You might know this feeling. You’re interviewing for a job you really want. Everything is going great. In fact, you are killing it. And then the employer asks you to disclose your salary history, and your heart sinks.
Maybe you’re looking for a new job because you feel you aren’t being paid enough in your current job. Maybe you’re switching industries, so your current salary shouldn’t be comparable. Maybe you just feel it’s none of their business. In any case, the knowledge that a potential employer will factor past wages into a salary offer can be very unwelcome news. It feels like an unfair way to judge your worth.
And it’s not just a feeling. Questions about salary history are a major factor in the wage gap — the difference in the average earnings of men and women. If you’re a woman of color, those questions can be a double whammy, because many women of color face a much wider wage gap than white women.
Why are these questions a problem?
The wage gap is real, and it starts early. A study by the American Association of University Women (AAUW) found that just one year out of college, a woman earns about 7 percent less than a man who had the same major, is working the same number of hours, in the same field, with the same occupation.
So now imagine a man who earns $50,000 and a woman who earns $46,500 (7 percent less) applying for new jobs. Each is offered 10 percent more than their current salary — $55,000 for the man, and $51,150 for the woman. The wage gap between the man and the woman has now increased from $3,500/year to $3,850/year. And with each raise and each new job, that gap will continue to widen.
Over a career, those differences add up to hundreds of thousands of dollars in lost earnings for women. The National Women’s Law Center (NWLC) estimates that a 20-year-old woman starting her career today will lose $418,800 over a 40-year career to the wage gap. If she’s black, that number jumps to $840,040. If she’s Native, it’s $934,240. And if she’s Latina, she’ll lose more than $1 million! That’s money she could use to put food on the table, to get further education, to buy a house, to put her kids through college, to save for the future.
Even after a woman retires, that wage disparity will haunt her. Because she earned less over her career, her Social Security checks are smaller. She probably wasn’t able to put as much in her 401(k). Her life insurance and disability benefits, which are often based on earnings, are likely smaller, too.
But it doesn’t even stop at retirement. It can follow her children and grandchildren as well. Because of the pay gap, women have a lesser ability than men to turn wages into financial assets, leading to a huge wealth gap. A person’s wealth signifies the value of all the assets that person owns — including their homes, cars, investments, bank accounts, and more. In 2016, when looking at accumulated wealth, single women owned just 32 cents on average for every dollar owned by men, and women of color owned far less than that.
In fact, single black and Latina women own less than ONE CENT to a single white man’s dollar. When women are unable to build wealth, their safety net is thin. One medical bill, one car breakdown, one lost paycheck can devastate their whole family. And that lack of stability is passed down to their children. Because of the wealth gap, women are less likely to be able to send their kids to the colleges of their choice, to leave an inheritance, to give their kids the loan they need to start a business, or support them while they take an unpaid internship. All these things lead to disadvantages that can plague families for generations.
And often, women are victims of wage discrimination without ever knowing it. Because salary is such a taboo topic, a woman may be earning less than the men in comparable roles in her company, and she may never find out. That makes it hard for her to stand up for herself and fight for what she deserves.
So let’s go back to those salary history questions during job interviews.
You can see how they can perpetuate discrimination that women have already experienced.
The Equal Employment Opportunity Commission (EEOC) recognizes that basing future salaries on current earnings can result in bias if that is the only factor that a wage disparity is based on. The EEOC Compliance Manual states that,
“Prior salary cannot, by itself, justify a compensation disparity. This is because prior salaries of job candidates can reflect sex-based compensation discrimination. Thus, permitting prior salary alone as a justification for a compensation disparity “would swallow up the rule and inequality in compensation among genders would be perpetuated.’”
But employers ask the question anyway.
The questions often come even before candidates get to the job interview — when filling out online job application forms or during initial phone screens. And in a survey of more than 15,000 people who were currently evaluating job offers, 43 percent had been asked about their salary history at some point during the interview process itself.
That’s nearly half! And that’s just looking at one job interview in that person’s career — most of us interview for multiple jobs over the course of our lifetimes, increasing the likelihood that we’ll face this question at some point (or at many points) in our working lives. And each time we do, the result could be added disparity between men and women.
This is likely one of the reasons that the wage gap between men and women widens over time. As women get further into their careers, they are paid less in comparison to their male counterparts. There are a number of factors at play here, but salary history questions play a role, because those questions make it impossible for women who have ever been underpaid to catch up. That initial ding follows them, and gets amplified, through the course of the rest of their career.
And here’s the kicker.
Many people will tell you we don’t need a legislative solution — that women should just refuse to answer the question when it’s posed. Or that they should negotiate harder for a fair salary.
But that doesn’t work. In fact, there is a brutal double standard at work. When men refuse to answer salary history questions, they actually end up with salaries that are 1.2 percent higher in the end. Perhaps because they are seen as strong negotiators, or as more confident. But women who refuse to answer the question are punished with pay that is 1.8 percent lower. Is that because these women are seen as pushy? Or — that term used to describe many strong women — abrasive?
The upshot? When we allow employers to ask candidates for salary history, it puts women in a double bind — if they answer, they risk carrying previous wage discrimination into their new job. But if they don’t answer, then they’re penalized with lower pay, too. Women can’t win when these questions are in play!
So, what’s the solution?
The best way to address this problem is by passing laws that ban salary history questions during the hiring process. Across the country, states and cities — including California, Delaware, Oregon, Massachusetts, San Francisco, Philadelphia, New York City, and Puerto Rico — have started to do just that.
In Illinois, where Women Employed is located, we were able to pass a No Salary History bill in 2017 and in 2018, but our former governor vetoed the measure both times. But we are persistent! We worked No Salary History again in 2019, again we passed the bill, and this time our new governor, J.B. Pritzker, has signed it into law! The new law will go into effect on September 29, 2019.
And in the meantime, we’re also working with employers to encourage them to voluntarily move away from these questions.
The fact is that we shouldn’t be basing salaries on past wages in the first place. Your salary should be based on your skills, your experience, and the requirements of the job. Period. And with the advent of services like PayScale, Glassdoor, and Salary.com, which can help employers determine a fair salary based on the position and industry standards, there’s no longer any excuse to do otherwise.
“But the budget is tight,” businesses say. “We need to save where we can!”
Even though it may seem like a bargain to lowball an employee’s wages, that’s often a short-term victory for the employer. When people feel like they are not paid what they are worth, they are far more likely to underperform at work, or to leave altogether. And that means added costs in the long term.
“But what about people who want to disclose their salary to help in their salary negotiations?”
Nobody is stopping them! If a job candidate wants to voluntarily disclose their current or past wages as a bargaining chip, they are free to do so even if a No Salary History law is in place. These laws prevent the employer from asking — they don’t prevent the candidate from offering.
And actually, most job candidates would welcome an end to salary history questions. One survey found that 53 percent of people — and 60 percent of women — believe employers should not ask about their current or past salary during the hiring process.
Another change people would welcome? More transparency from employers about pay ranges during the hiring process. In fact, 98 percent say they’d like to see pay ranges in job listings. Publicizing that information up front would not only help candidates determine the value of applying to the job, it could also help to reduce pay bias by taking away some of the individual discretion and arbitrariness from salary offers.
So now that we know all this, what can we do to end this practice?
Call your elected officials — both state and federal — and tell them why this issue matters to you. If you can talk about a time when you felt salary history questions impacted your future earnings, share it! Ask them to support a salary history ban in your area!
If you feel comfortable, talk to your own employer or HR department and encourage them to end this practice at your company.
Then get involved with Women Employed’s Action Network — we worked successfully to end this practice in Illinois, and we’re advocating for other laws at the state, local, and national level to advance gender equity. We’ll send you periodic emails with easy actions you can take on this and other issues important to working women.
Together, we are powerful!
p.s. What can you do if you’re asked for your salary history during the hiring process? Click here for some tips and resources »
Written by Judy Miyashita, Senior Communications Associate