Should cities offer free salary negotiation classes to close the ‘wage gap’?

Boston is doing it, and the city says it’s money well spent.

This fall, Boston began offering free two-hour salary negotiation classes for women who work in the city. The $1.5 million program, which will continue for five years, is funded through corporate and foundation dollars.

The classes are supposed to teach women strategies that can give them the confidence — and know-how — to negotiate their salaries. The program walks participants through how to come up with a salary number, how to talk about their contributions to the company and even what to do when the negotiation fails. The Washington Post describes the classes more.

The wage gap

The goal of the salary negotiation program is to help close the “wage gap,” a reported difference between earnings for men and women.

This is a hotly debated topic.

Women make about 79 cents for every dollar men do, according to U.S. Census data on the median annual earnings for people who work full time. In Pennsylvania, the number is about the same.

These numbers are somewhat simplistic, though — in part because they don’t account for education, industry or occupation.

But research has also shown that a wage gap persists even when those factors are excluded.

It seems there could be an appetite for similar programs in Pennsylvania cities. Governor Tom Wolf talked about the wage gap during his 2014 campaign, saying that “as the father of two daughters, I’m especially sensitive to the fact that women are paid only 77 cents for every dollar a man makes when they do the same work.” (That’s not exactly right, as we’ve noted, because that figure doesn’t take occupation or other factors into account).

In Pittsburgh, the Seventy-Four Percent Project, part of the Bayer Center for Nonprofit Management at Robert Morris University, advocates for pay equity in the nonprofit sector. 

There was even a pop-up shop in Pittsburgh, called 76<100, that decided to charge women less to reflect the wage gap.

Why Boston offers the program

Megan Costello, executive director of Boston’s Office of Women’s Advancement, which runs the salary negotiation program, acknowledges that there are a lot of factors that go into pay disparities. She says her office is working with companies, who have agreed to anonymously report employee salaries so the city can conduct research on the problem.

But Costello also points out, as we’ve noted above, that even when controlling for other factors, there is still a pay gap. With that in mind, she says, offering these courses is not just the right thing for the city to do; “it’s also the economically smart thing to do.” More than half of Boston’s population is female. The city also has a higher proportion of college-educated women between the ages of 25 and 64 than any other metro area, according to 2010 U.S. Census data. “Retaining those women is good for our families, our neighborhoods and every single person in the city of Boston,” Costello said. 

The classes are just one component of the office’s strategy to close the wage gap. The other: counsel companies. Costello and her colleagues have been working with firms in the city on how to retain female talent. Pay equity is one part of that.

Why should companies cooperate? They, too, should consider the women who graduate from Boston’s universities as an asset, Costello says. “If they as a company want to make more money, they have to attract 100 percent of the talent,” she said. “If they’re excluding [more than] 50 percent of the population, that’s their economic loss.”

Research has linked gender diversity in a company’s senior management team with superior financial performance, and gender diversity on the board of directors with higher stockmarket returns.