This story is part of our Salary Series, where we take a deep dive into the world of pay: how it's set, how it's changing and what's next. Read the rest of the series.
Despite all the advocacy and legislation aimed at addressing it, the gender and racial pay gap in the U.S. persists.
What if we tried to address the gap from a different angle? That’s the premise of a new marketing campaign by HR compliance software company Trusaic, which recently launched what it claims is the world’s first Pay Gap Store.
The concept is simple: What you pay depends on your gender and race. Prices for items in the store are calculated using U.S. census data collected from the 2019 American Community Survey. Trusaic took the difference between the average wage earned by the selected class and the average wage of the highest-paid class, dividing that figure by the highest paid class’ wages. The resulting percentage is what people call the pay gap.
At the Pay Gap Store, that percentage is the discount applied to the items for sale, which include T-shirts, tote bags and mugs. The highest earners — Asian men — pay the most, and the lowest-paid — Hispanic women — pay the least. A T-shirt that would cost an Asian man $34.99 at the store would cost a Hispanic woman $17.14, representing the 51% pay gap between those two groups.
Profits from the Pay Gap Store will be donated to a relevant charity fighting for equal pay, which the company is currently deciding on. Some candidates include the National Women’s Law Center as well as Equal Rights Advocates, which has an Equal Pay Today campaign.
A caveat here is that, legally, Trusaic isn’t allowed to charge people differently based on race and gender, which is why there's a bold disclaimer at the bottom of the site: “Our Pay Gap Store SUGGESTS what a fair price is for you, based on your answers to our questions about your gender and race/ethnicity, but in the end, it’s up to you — and your conscience — whether you pay the higher price suggested for you or the lowest price available, which you can still choose if you prefer.”
This kind of choose-what-you-pay setup is relatively rare in ecommerce, with the most notable example being popular direct-to-consumer brand Everlane, whose annual “Choose What You Pay” sale is part of the retailer’s whole radical supply chain transparency edict.
Matt Gotchy is Trusaic’s VP of Marketing, and he spoke to Protocol about the Pay Gap Store. He compared the idea behind the store to carbon offsets, but rather than offsetting carbon, you’re offsetting the pay gap through your purchase.
Gotchy is not under any illusions. He’s aware that selling merch on an online store is not going to move the needle in any meaningful way when it comes to pay equity. Trusaic hasn’t spent much time or effort marketing the store, with one big recent order consisting of $200 worth of shirts for “several different race and gender combinations.”
True change, in his view, would require legislation, which Trusaic has worked with lobbyists to promote on Capitol Hill. It's a big fan of California’s SB 973, a new state law that requires private employers with 100 or more employees to file an annual report with the EEOC that breaks down pay data by job category, race, sex and ethnicity, as well as Illinois’ SB 1480, which is similar. While the U.S. is inching toward state-by-state decisions on pay transparency, the U.K. has had gender pay-gap reporting requirements for all companies over 250 in headcount since 2017.
As a regulatory-compliance software company, Trusaic has gathered a lot of pay-gap reporting data on its own, including a 2021 analysis of 500 companies in the state of California, which identified a $46 billion annual gender pay gap and $61 billion race/ethnicity annual pay gap for workers across the state.
For companies that are willing (or compelled by law) to put in the work and uncover pay gaps, Gotchy suggested starting with a pay-equity audit. Here’s how to conduct one, according to experts that spoke to Protocol.
“Be proactive,” he said, pointing to safe harbors that certain states have for companies that conduct audits. These would allow damages in the case of employee lawsuits to be more limited than they would be if these companies hadn’t conducted the audits in the first place.
Ultimately, the two instances pay inequity is created occur when people get hired and when they get promoted, Gotchy said, and addressing both sources “makes a real difference in people’s lives.”