How to Get Equal Pay for Equal Work

July 20, 2004 -- Recent sex-discrimination lawsuits — Boeing and Morgan Stanley settled two major cases last week — have brought the wage gap back into the spotlight.

On a national basis, women simply are not paid the same wages as men, although the disparity does seem to be shrinking. According to a recent report by the U.S. Census Bureau, women earn 77 percent of what men do, compared with 59 percent 40 years ago.

We took to the streets to find out what questions women wanted to know regarding how they can get that coveted raise and ensure they are receiving equal pay for equal work.

Question: How should I go about asking for my first salary and how do I know if I'm being paid fairly?

Mellody's Answer: The career center at your law, business or undergraduate school is an excellent starting point. The center will likely have a wealth of resources on salary comps and information on the starting salaries of previous graduates going into similar practice areas. Keep in mind geography plays a major role in salaries so do not automatically assume you deserve the high end of the range. For example, if you live in Des Moines, Iowa, you do not want to assume you will be paid the same salary as a first-year attorney in Manhattan. Additionally, there are many helpful Web sites like Salary.com and the United States Department of Labor, which allow you to enter specific information about your profession, experience and location to get a general salary range. Other sources of good information on salaries are trade associations as well as the Web sites of competitors linked under their careers tabs.

Finally, it is critical for you to use your information wisely to negotiate your starting salary. When the financial offer is made, if it does not correspond to the ranges you have seen, you want to go back to the potential employer and gently ask if they will reconcile the difference. This is a good indication to them that you have done your research. The bottom line: if you do not have your numbers in line when you go to negotiate your salary, you will lose all of your credibility. Many people want the job so badly they are very timid about raising these questions on the front end, and yet, in failing to negotiate a starting salary, an individual stands to lose more than $500,000 by age 60. Your starting salary becomes the anchor for all future compensation at that company.

Question: I just started a new job. At what point is it appropriate to ask for a raise?

Mellody's Answer: Do not even think about asking for a raise until you have been with the company for at least a year. In any industry, it takes a few months for people to learn their way around and get traction. After a year, you want to make sure you ask about your compensation during a performance review and if a review is a few months off, wait. Timing is everything. Just imagine if you are getting a stellar performance review — what better time to raise the issue of compensation? If your first evaluation is not strong, this may not be the best time to ask for a raise but instead the appropriate time to ask your boss how you can improve your performance to position yourself for a raise in the future.

Question: I don't think I'm earning a fair salary. I think I deserve more. What should I do?

Mellody's Answer: First, ask your human resources department if there are compensation guidelines which detail the possible raise and bonus scales applicable for your position. Next, ask your boss and human resources person from your company if the amount you are being paid is at the high, middle or low end of the comp scale for your peer group. If it is not at the high end, ask what you can do to get to the higher end of the comp range. Always take a non-confrontational approach when inquiring about your compensation. It is important to note that you should not ask the amount your peer group is being paid. Remember, you want to do this during a review. If for some reason you have reservations about the answer you are getting, ask for a response in writing. Additionally, if your employer will not give you a written response, you may want to become concerned. If you are stonewalled on a written response from your boss, go back to the human resources director and ask them if they would mind if you talked to a more senior person. Keep in mind, for every vice president, there is a senior vice president and for every senior vice president there is an executive vice president. Generally, there is a way to go up the executive food chain to resolve these issues.

If after going through higher channels you decide to pursue legal action against your employer, keep in mind litigation should always be the course of last resort. Remember: even though your job will be protected, there is risk to your reputation. Also, courts only hear cases when all other forms of resolution have failed.

E-mail Mellody with your personal finance questions.

Mellody Hobson, president of Ariel Capital Management (arielmutualfunds.com) in Chicago, is Good Morning America's personal finance expert. Ariel associates Matthew Yale and Aimee Daley contributedto this report.