Secret deodorant’s donation to the U.S. women’s soccer team’s fight for equal pay is winning praise, but the brand’s parent company has its own pay gap issues.
Procter & Gamble PG, +0.04% donated $529,000 to the women’s team players’ association and threw its support behind the team’s battle for pay equity in a full-page New York Times ad. The women’s team earns 18 cents on the dollar compared with the men’s team and has sued the U.S. Soccer Federation, alleging pay discrimination.
“We urge the U.S. Soccer Federation to be a beacon of strength and end gender pay inequality once and for all, for all players,” Secret’s ad said. “And we urge you, our fellow fans, friends, supporters, organizations and brands: join our team and help close the gender pay gap.”
P&C reported that its Procter & Gamble UK division pays female workers 28.5% less than men in median hourly wages.
But in the United Kingdom, where companies with more than 250 employees are now required by law to disclose their gender pay gaps, Procter & Gamble reported that its “Procter & Gamble UK” division pays female employees 28.5% less than men in median hourly wages.
The company has two other divisions in the U.K. At its manufacturing and warehousing division, women make 3.4% more than men in median hourly wages. But at the third unit, which does research and development, finance and other duties, women’s median hourly range is 17.7% lower than men’s.
Two kinds of pay gaps
In the U.S., the national gender pay gap is generally considered to be 20%, meaning a woman typically makes 80 cents for every dollar a man makes.
Companies are often interested in tracking their equal pay gap — the one between men and women in the same roles — because if there is one, it’s an obvious sign of outright gender discrimination, said economist Jay Shambaugh, director of The Hamilton Project at The Brookings Institution, a center-left Washington, D.C. think tank.
The U.S. women’s soccer team pay battle, for example, is about an equal pay gap because it’s comparing the work they do directly to their counterparts on the men’s team.
Why measuring the gender pay gap is important, too
“I understand why firms point at the equal pay gap because it’s the thing they most directly control,” Shambaugh said. “The second question though becomes, if there’s a gender gap, is that the responsibility of the firm, or is it a whole range of things that exist in society?”
Many factors create the gender pay gap, including women being more likely to hold lower-paying jobs, women not advancing or being promoted, and women taking time off from work to have and raise children.
Gender pay gaps are important to monitor too, Shambaugh said. Shining a spotlight on gender pay gap data can put pressure on firms and make them think about whether they’re doing enough to promote women, or to recruit them into better-paid jobs at the start of their careers, Shambaugh said.
“If the Googles GOOG, -0.63% GOOGL, -0.58% of the world are encouraging women to become programmers, that might make a difference,” Shambaugh said. “You could say the same about a big company like P&G.”
Procter & Gamble say its gender pay gap is more complicated
The two main drivers of P&G’s pay gap are the number of men and women in the company’s highest paid and lowest paid jobs, and “the choices those employees make” about when they receive their pay and bonuses, when they sell stock options, and whether they give up part of their salary in exchange for a benefit like child care, said Procter & Gamble spokesman Damon Jones.
At Procter & Gamble U.K. for example, women occupy 72.3% of the lowest paid jobs and 51.8% of the highest paid jobs.
Overall, the median pay gap across all three U.K. divisions is 5.8%, Jones added. But those numbers only tell part of the story, and don’t represent a full picture of the company’s gender equity track record, Jones told MarketWatch.
At Procter & Gamble U.K., women occupy 72.3% of the lowest paid jobs and 51.8% of the highest paid jobs.
“Fair pay practices and an equitable workplace are core P&G beliefs and essential to our long-term success,” Jones said. The company conducts pay equity audits on an ongoing basis to make sure its pay system is working as intended, he said.
The most recent audit of Procter & Gamble’s U.S. workforce in 2017, showed no “appreciable” pay gap between male and female employees “with similar roles and performance,” he said. The company has about 97,000 employees worldwide.
On other metrics, Procter & Gamble’s gender equity is more balanced, if not equal. Its board of directors is 40% women; 40% of the company’s executives are women, and 47% of its managers are women, Jones said.
Among the world’s biggest companies, women held 17.3% of board seats in 2017, up from 15.8% in 2016, according to the latest data from Catalyst, a nonprofit that advocates for women in the workplace. Across Fortune 500 companies in the U.S., 39.8% of managers were women in 2017, Catalyst found.
P&G earned a ‘D’ on one gender equality score card
But one analysis found Procter & Gamble lacking. The company earned a “D” grade for gender equality on a 2019 score card by the Netherlands-based research nonprofit Equileap. The Equileap report looked at the 100 largest U.S. public companies and judged them on a range of criteria including their health-care plans, parental-leave policies and the diversity of their suppliers. P&G ranked 55th out the 100 companies.
‘What’s really going to change the world for all women is when companies start to be transparent about their own pay gap.’
among its entire workforce.
“It’s absolutely fantastic that they’ve stepped up and shown leadership in this way and made a donation to the women’s team,” Equileap CEO Diana van Maasdijk told MarketWatch. “At the same time, what’s really going to change the world for all women is when companies start to be transparent about their own pay gap and start ensuring that the pay gap is lowered.”
Jones, the P&G spokesman, said there are many such scorecards, and the company can’t provide comprehensive information for all of them. That was the case with Equileap, resulting in a lower score, he said.