The Boston Women’s Workforce Council Finds a 30% Decline in the Boston Gender Wage Gap

By Chloe Wojtanik, Hariri Institute for Computing

Alongside Boston University’s Hariri Institute, the Boston Women’s Workforce Council (BWWC) unveiled their 2023 Gender and Racial Wage Gap Data Results this month. Excitingly, the BWWC found that the gender wage gap in Greater Boston has declined by 30% – from 30¢ to 21¢. This is the first measured progress since the BWWC started reporting in 2016.

The BWWC fosters a strong public-private partnership between the Boston Mayor, Michelle Wu, and Greater Boston employers dedicated to eliminating gender and racial wage gaps. Through its relationship with organizations  in the Greater Boston area, the BWWC measures wage gaps by analyzing and reporting on data that they receive right off the payroll systems of these employers.

“Other national organizations that set National Equal Pay Days do the math very similar to the way we do it, but they do it using census data,” says Kim Borman, the BWWC’s Executive Director. “Census data is self-reported by an employee who typically relies on memory for dates of raises or bonuses. The BWWC data is much more accurate because it comes right off the employer’s payroll system.”

The BWWC’s biannual wage gap reports are the first of its kind in the nation. They are the only group in the United States with employer members willing to hand over their payroll data directly to them for research purposes. Borman gave credit to the Hariri Institute’s Software & Application Innovation Lab (SAIL) for helping form and sustain these trusting relationships.

“Employers give us their data because BU has built a data collection platform with security-backed software that ensures against hacking and keeps the information secure,” Borman said. 

The Software & Application Innovation Lab (SAIL) at the Hariri Institute developed the platform using a cryptographic technique called Multi-Party Computation, or MPC, to collect and analyze private wage information. With MPC, employers enter their payroll data, which is then divided into many different pieces and masked with other random numbers. 

The BWWC refers to its members as “100% Talent Compact Signers.” Once these companies sign the Compact, they are committed to examining their employee data to assess whether or not  gender and/or racial wage gaps exist, contributing their employee data confidentiality to the BWWC’s biennial wage gap measurement, and participating in quarterly briefing sessions including the annual Effective Practices Conference. Over 250 Boston-area employers have signed the 100% Talent Compact and they all share the common goal of fostering the best environment for working women in Boston. 

From 2021 to 2023, the BWWC saw a 6% increase in employee records collected – leading to 10,000 more data sets being used for this year’s report. This increase in records collected now means that the BWWC covers 17% of the Greater Boston demographic in their wage gap research. 

In this year’s research, the BWWC found that there has been a 6% increase in women’s salaries from 2021 to 2023, closing the gender wage gap to 21¢. The same increase was not found in men’s salaries over the same time period. The BWWC attributes this increase in salaries to two factors, the first being women’s advancement into highly paid senior positions. Women in the C-Suite, or the executive-level managers within a company, rose by 3% this year. In addition, women in the level right below C-Suite, first/mid-level officials, saw a 2% increase this year as well. The second factor was the intentionality paid to the issue since the pandemic. Many of the policies put in place due to COVID like schedule flexibility and hybrid work could be helping retain women which is needed for eventual promotion.

While this 30% decline in the gender wage gap is significant, it looks only at base compensation, or most often known as an hourly rate, monthly income, or annual salary. When looking at total compensation, which includes both base compensation and performance pay, the gender wage gap increased to 30¢. The BWWC’s research proved that on average, men earned over 3x the amount of performance pay as women.

“More women in these higher-paying roles reduced the gender wage gap, but a lack of equity in performance pay has contributed to maintaining it,” said the BWWC in their 2023 Gender and Racial Wage Gap Data Results.

“What the BWWC is asking companies to do is to become more objective and have actual criteria people are supposed to meet for performance pay,” said Borman. 

The BWWC analyzes wage gaps beyond just gender, and emphasizes that a prevalent wage gap also exists when you look at the payroll data based on race/ethnicity. White workers earned more in 2023 than non-white workers, with a 27¢ wage gap in base compensation – a 3¢ increase from the 2021 measurement. Looking at total compensation, the racial wage gap increased to 31¢ in 2023 – up from 28¢ in 2021. 

“Non-white workers must be given the opportunity to move up to management positions and get them into roles that not only offer higher level salaries, but also performance pay.  It’s easier said than done, but we can see in our numbers that these changes need to be made to close the racial/ethnic gap,” said Borman. 

Looking to the future to see how companies can continue to close the wage gaps, Borman said that companies can’t make a difference by just looking at their payroll data once a year. Companies need to make a commitment to looking at their data often to continuously make changes to try and eliminate these gaps. 

To view the complete 2023 BWWC Wage Gap Report, visit thebwwc.org.