Why Can't Employers Ask About Previous Salaries and How It Affects Gender Equality

In the United States, asking about an applicant's previous salary is forbidden under certain circumstances. This practice, known as salary history, has been considered a significant contributing factor to the wage gap. This article explores why this practice has been restricted and its potential impact on gender equality.

Why is Asking About Salary History Prohibited?

The primary reason behind prohibiting the inquiry of an applicant's salary history is to ensure that the compensation offered is based on a fair and objective assessment of the role rather than past earnings. Historically, an individual's current or previous salary has been a key determinant in setting their new salary. Employers may have aimed to offer a salary that was slightly higher than the applicant's current or previous earnings, but not too much more. This strategy often led to a cycle where women, who tend to earn less than men on average, faced challenges in receiving equitable compensation.

Gender Pay Gap and Salary History

In the context of the gender pay gap, salary history has been one of the factors that has influenced this disparity. It is presumed that an individual's wage is lower if they are a woman, due to factors such as sexism or discrimination. This has led to attempts to prohibit the use of previous wages in making salary offers, in the hope of providing more equitable compensation.

Theoretical Benefits and Real-World Implications

Advocates of prohibiting salary history argue that it would help break the cycle of undervaluing female employees. Without knowing a candidate's past earnings, employers would have to evaluate the individual's worth based on their skills, experience, and the job requirements, ensuring a fairer starting point. However, in practice, many businesses have already adopted this approach, and the impact of such legislation is questionable.

Critiques and Real-World Evidence

While the intention behind the law is commendable, the reality is that discrimination against women in wages has been prohibited since the 1960s. Very few complaints related to gender pay discrimination have been brought to the Equal Employment Opportunity Commission (EEOC), and these have often not been upheld. This suggests that, at least in the majority of cases, the gender pay gap is not as primarily due to direct discrimination but more related to career choices, work hours, and family responsibilities.

Future Outlook and Analysis

The effectiveness of laws prohibiting salary history remains to be seen over the next decade. Academic and economic studies have concluded that there is little evidence of widespread discrimination against women in wages. The gender wage gap is often attributed to factors such as career choices and work hours, rather than direct discrimination. While such legislation aims to address gender equality, the underlying causes of the wage gap may lie in other domains, making the impact of prohibiting salary history limited.

Conclusion

The prohibition of asking about previous salaries is a step towards ensuring fairer compensation practices, particularly in the context of gender equality. However, its practical impact remains to be seen, and it is essential to consider the broader factors contributing to the wage gap when addressing these issues.