In 2017, Oregon passed a law that was aimed at reducing wage disparities for employees performing the same work. Historically, women and people of color have earned lower wages than their white or male co-workers. Years later, a report from the Oregon Audits Division found that wage gaps in government positions still remain. Ian Green is an audit manager for the division. Jennifer Freyd is a professor emerit of psychology at the University of Oregon and is the founder of the nonprofit, Center for Institutional Courage. They join us with details of the report and how persistent pay disparities affect employees.
Note: The following transcript was created by a computer and edited by a volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. In 2017, Oregon lawmakers passed a bill to address persistent wage gaps between women and People of Color who work in state government and their male and white counterparts who do the same or similar jobs. But six years later, according to a recent report from the Oregon Secretary of State’s office, those gaps still exist. Ian Green is an audit manager with the Oregon Secretary of State’s Audits Division. He joins us now with the details. Welcome back to the show.
Ian Green: Thank you for having me.
Miller: I want to start with the background here. What was the purpose of this pay equity bill in 2017?
Green: So the pay equity bill was really to address wage gaps, not only in state government, but among all employers with the exclusion of the federal government here in Oregon. It did a number of changes. One, it changed the practice of basing compensation based on prior salary history. Compensation under the pay equity legislation must be attributed to various factors such as the seniority system, a merit system, the quantity or quality of production, locations, travel, education training and experience.
Miller: And why was it that removing the qualification or the reason for a difference in pay, at removing previous salary from what you could consider, why was that seen as important?
Green: One of the factors that economists and various people that have studied this issue have found is that white men in particular have had advantageous salary histories and opportunities as they’ve sought employment. So those perpetuated further into their careers. When women came into the workforce and were looking for jobs, they were then offered lower salaries. And those persisted throughout their careers and those wage gaps then persisted. So by changing salary from based on prior salary history to these allowable factors, the thought is that it would address that issue over time.
Miller: OK. And what about existing pay equity issues? What did the law require of employers going forward as a way to address existing inequities?
Green: One of the things that the law also did is allow employees to sue their employer if they believe that pay inequities existed. If an employer did a pay equity analysis and adjusted and raised compensation to address any identified inequities, they were provided legal protections. So employers are encouraged, although not required, to perform that analysis every three years, given that legal protection.
Miller: The whole purpose of this law as we’ve been talking about was to close wage gaps, in particular for women and People of Color doing the same or similar work as men or white people. And yet you found that white employees received the largest pay adjustments in 2019 and in 2022, while People of Color received the smallest. It seems like the exact opposite outcome of the intent of the law. How do you explain that?
Green: There’s a couple possible explanations there. One explanation is that individuals may not have participated in the process, they may have opted out of the process. So if an employee did not provide their education and experience history as part of that pay equity analysis, then they would never be identified for a wage gap and a subsequent pay equity raise. And they might not have participated because in the past, they were discouraged from seeking raises from their employers and they thought that this process might result in the same outcome.
Miller: In other words, a kind of mistrust of the system based on previous experience leading them perhaps to opt out of a process that in fact could have helped them this time.
Green: Exactly. So that’s one explanation. Another possible explanation and we saw this in the seniority data that we analyzed, female and BIPOC, Employees of Color, who work for the state, have less seniority in state government. And that explains some of the existing wage gaps as allowed by those allowable factors. And part of that is that because women do a disproportionate share of housework and child care and they leave and exit the workforce for a period of time. And that labor is unpaid and it’s not accounted for, and when they go back and enter the workforce, they don’t have any way to be recognized for that value that they contribute to society.
Miller: In other words, it’s larger… it’s outside of the specific sphere of employment and pay. It’s a societally structural issue of who gets more burdened with outside of work, work. But that ends up being reflected in pay in, in a way that is legal.
Green: Exactly.
Miller: Does this report suggest a better way forward? I mean, other ways that employers could effectively address wage gaps?
Green: What we recommended in the report is further study of this issue. We looked only at the executive branch in state government, because we were recreating the methodology that was found in a 2015 study, that helped to influence the pay equity legislation in 2017. You’d also want to consider how private employers implemented pay equity, as well as local governments before you make any radical changes to the law. But further studies should prompt action and change because these persistent wage gaps are concerning. They don’t appear as you mentioned earlier to meeting the legislature’s intent behind passing this legislation.
Miller: Is there reliable data about the private sector? I mean, the sense I get is that your position in the audits division where you have access to all kinds of data about state government and the executive branch of various agencies, it gives you a pretty good perch to take your magnifying glass and look at wage data. Could you do anything similar with the private sector?
Green: That’s really outside the scope and the purview of our office. We do have access to a wealth of information, but I don’t know if we can necessarily perform the exact same study and analysis on private sector employment data, unless those employers provided that information to our office.
Miller: Do you have a sense for how Oregon is doing compared to other states?
Green: Yeah. So the U.S. census has various pay equity measures and Oregon ranks fairly well compared to other states. I don’t have the number off the top of my head, but I believe it was around 35 out of the 50 states, with the kind of the smaller end of the wage gaps. Washington to our north, ranked near the top with some of the largest wage gaps. So we’re better than average, but we’re not the best in the country.
Miller: Were there any bright spots in this report?
Green: Yeah, one of the real bright spots we saw was the state has made tremendous progress on meeting its goal of having a diverse and representative workforce. Since 2007, the state has hired about 4,000 Employees of Color. And, although some demographic groups are still underrepresented relative to the overall population, this is an area that the state should really be proud of its accomplishments it’s made in the last 15 years, and it should continue to make some efforts to close those existing gaps.
Miller: Ian, thanks very much.
Green: Thank you, Dave. I really appreciate it.
Miller: Ian Green is an audit manager with the Oregon Secretary of State’s Division.
For another perspective on this issue, we’re joined by Jennifer Freyd. She is a professor emerit of psychology at the University of Oregon. In 2021, Freyd came to a $450,000 settlement with the university that followed a four year legal fight based on her allegations of discrimination, after discovering that she was being paid thousands of dollars less than her male colleagues. Freyd is now the founder of the nonprofit, Center for Institutional Courage. Jennifer Freyd, welcome back to Think Out Loud.
Jennifer Freyd: Thank you.
Miller: What was going through your mind when you have heard about this new report looking into the persistent wage gaps in state government?
Freyd: Well, two things. One, I’m just so glad that the state is looking into this issue, that really heartens me. And second of all, of course, I’m disappointed that the situation has not improved despite what I believe are truly good intentions. And I wasn’t super surprised by that but, but disappointed. I would have hoped that there had been more improvement over the last four or five years.
Miller: What do you see as the underlying reasons for these persistent pay gaps?
Freyd: I think researchers who’ve looked into this consistently find there’s more than one factor here and it would be much easier for us all to think about this and talk about it if we could just boil it down to one problem. But there are many issues, many factors that are involved. One that I think doesn’t get talked about enough is what can be sometimes called unconscious bias. Let me tell you about a kind of study that has been performed many times now. In this study researchers create a fictional resume, and they put at the top of the resume a name that appears to be obviously male or a name that appears to be obviously female. And then they send the resume out to employers. And the particular resume that a given participant in this research gets is either the female name or the male name and it’s randomly chosen which one the person gets.
And there’ll be some series of questions like, would you hire this person, if so at what rank, and how much would you want to pay this person? And the result is, over decades, in studies such as this - and there are many of them, dozens and dozens now - is that there is a discrepancy between the response for the male name and the female name. And what’s so striking is that the resumes are otherwise identical. The people that are filling, doing this and, I should say the discrepancy is in the favor of higher pay, higher rank, more preference for the male candidate. The people that are doing this, I doubt very many of them hold consciously discriminatory beliefs, but nonetheless it shows up in this way. So if you think about that and think about all the opportunities for that kind of bias to slip into decision making, it’s really not surprising that even when you try to fix the other known factors, there is still a discrepancy in pay.
Miller: It seems like one way to address that unconscious bias is to remove the human subjectivity from it. Certainly in terms of how you decide how much someone’s going to be paid. Is that possible?
Freyd: Well, yes. You’re absolutely right. Research also suggests that the more objective you can become in your criteria, the less of this problem of bias. So, if it’s very subjective, just like, do you want to hire this person, how much should you pay them? You’re going to get the biggest bias if you give people a checklist, where they answer a series of questions regarding the person’s experience and how it compares to the job requirements and so on. And ask them to then base their decision on that checklist, you help diminish quite a bit of that bias. So, you’re absolutely right.
But the other thing that’s so important is to be constantly checking for pay discrepancies, in actuality. Because I think what we saw from this recent report is that even with good intentions and implementing some really good procedures, there are still those discrepancies. And it’s possible that the only way to really fix it is to systematically keep adjusting people’s pay, even if they don’t request that their pay be adjusted. Because certainly my experience as an employee of the University of Oregon over decades was that for most of my career, when I would bring a pay discrepancy to the people at the university with power over the budget, they would fix it pretty well, at that moment. Five years later, there it was again. And I don’t think anyone intended to discriminate against me, at least for most of that time. But these other processes would slip in. And so, if every year there is a comparison and every year people’s salaries are adjusted, that really helps reduce, if not stop, these discrepancies.
Miller: We don’t have the time now to go over all the minutiae of your own legal saga that lasted for four years and involved the district court and then a court of appeals, and then eventually, as I noted briefly in my intro, led to a settlement with the University of Oregon. But it’s been a couple years now and just looking back with that hindsight I’m curious what most stands out to you? What has most stayed with you from that time?
Freyd: It was really hard. I mean, I love the University of Oregon and I have so many wonderful colleagues there and it was very hard to be in a kind of conflict, and it was only with little bits of the University, but it was still hard and I was so glad recently [that] there was a retirement event for me and it was very warm and wonderful. So, that helped heal some of that wound.
I think the thing that really strikes me is, again, I don’t think people intended to cause harm, but I do think there was an unwillingness to really approach it with an open mind, because people get defensive, And once there’s a discrepancy, it’s very easy to rationalize it. And I saw that happening over and over, this rationalization that I, to this day, and part of the reason I formed a nonprofit to study Institutional Courage, is to understand how to help institutions respond in a more constructive, positive way, than sinking into a kind of defensive stance. And so I saw it happen and that’s kind of sad but I have hope for the future that we can fix this problem. I do think it’s within our reach to fix this problem.
Miller: What effects do you think your settlement, just as, as one individual employee at the university, what effect do you think it’s had beyond your own life, whether it’s legal precedent from the Court of appeals or something else?
Freyd: I know it’s been used as legal precedent, it’s been cited in other lawsuits and briefs, and I’m glad to see it can be used in that way. I hope specifically for Oregon that it inspires a better approach. I felt like I had to file this lawsuit ultimately because my situation wasn’t being fixed, and if somebody… there I was, very senior, eminent, if somebody in my position - and white, if somebody in my position was facing these tens of thousands of dollars in pay discrepancy, which has a huge material impact on one’s life, if I was facing it and I didn’t do anything about it, who would? So as unpleasant as a lawsuit was, I felt I had to do it to help future generations, from my students and colleagues to my own daughter, who’s going to become an assistant professor at the University of Washington in the fall.
Miller: Congrats.
Freyd: And I hope it’s had that effect, there’s really no way to know for sure.
Miller: There’s another way to think about this which, and I don’t mean to take the focus away from individuals who over the course of a year or 30 years, losing thousands of dollars a year, it’s an immense financial hit. But there’s another potential harm here for the actual, for the employer. What do you think that employers stand to lose, paradoxically, if they perpetuate these pay gaps?
Freyd: That’s such a wonderful question. And one of the things I’ve studied in my own laboratory, for a long time now, I call institutional betrayal. And I’ve really focused on institutional betrayal and how institutions respond to sexual violence. So it’s a little bit different. But what we have found is that when institutions mess up - when they fail to prevent things, when they respond poorly, when they’ve occurred - it not only hurts the individuals who are caught up in the system, but it does hurt the institutions. It leads to loss of talent because people disengage and leave, more absenteeism. It supports a kind of internal corruption, when the institution can get away with not doing the right thing. And conversely, we’ve studied what I call institutional courage, which is kind of like the opposite. And we have found that it does help employers, that when employers display courage, it leads to greater employee engagement and retention. It’s odd, isn’t it? It’s odd that this thing that can really help, people are resistant to doing. And I believe we need to understand where that resistance comes from and figure out ways to overcome it, because everybody benefits. And how many times do you have a situation where everyone benefits by a change? But really everyone benefits by moving from institutional betrayal to institutional courage.
Miller: Jennifer Freyd, thanks for your time today.
Freyd: Thank you.
Miller: Jennifer Freyd is a professor emerit of psychology at the University of Oregon and the founder of the nonprofit, Center for Institutional Courage.
Contact “Think Out Loud®”
If you’d like to comment on any of the topics in this show, or suggest a topic of your own, please get in touch with us on Facebook or Twitter, send an email to thinkoutloud@opb.org, or you can leave a voicemail for us at 503-293-1983. The call-in phone number during the noon hour is 888-665-5865.