It is well known that a pay gap for Black, Indigenous, and People of Color (BIPOC) and women exists in the United States. While many attempts have aimed to reduce these inequities, such as getting more women and BIPOC into higher education and affirmative action in hiring processes, the wage gap still prevails. This begs the question— what could be some of the factors that are determining lower pay for BIPOC individuals?
One study set out to better understand how race effects salary negotiations. In this study, participants assumed the role of an employer in the midst of a hiring process and were given one of two identical resumes with either a photo of a Black or white male on the top. First, the study measured participants’ racial biases and whether they thought the Black or white job seeker would negotiate their salary. Next, the participants were randomly assigned a negotiation partner—represented by either a Black or white avatar—and negotiated salary. The findings showed that more racially biased job evaluators expected Black job seekers to be less likely to negotiate than White job seekers. This led to significant differences in how participants approached the negotiation. When Black job seekers negotiated more, job evaluators were less willing to make concessions and, ultimately, assigned Black job seekers significantly lower starting salaries than White job seekers.
What does this mean? The authors suggest that if Black employees enter the company at a lower salary, not only can this feed the racial wealth disparity throughout their career, but “other unfavorable outcomes are likely to emerge, such as a reduction in Black employees’ fairness perceptions, satisfaction, and eventually an increase in turnover” (Hernandez et al., 2019). One potential way to mitigate these effects is by having designated Diversity, Equity, and Inclusion professionals to help recognize and reduce bias through education and training. Finally, the researchers offer a solution of “addressing the less-recognized causes of racial pay inequality in the workplace, companies can attract a more diverse workforce and better leverage it” (Hernandez et al., 2019).
Hernandez, M., Avery, D. R., Volpone, S. D., & Kaiser, C. R. (2019). Bargaining while black: The role of race in salary negotiations. Journal of Applied Psychology, 104(4), 581–592.