City removes wiggle room from rules for pay equity - Albuquerque Journal

City removes wiggle room from rules for pay equity

Copyright © 2021 Albuquerque Journal

Paying women almost as much as men has for years given companies an edge in competing for city of Albuquerque contracts.

As long as the disparity between their male and female employees’ salaries did not exceed 7%, vendors bidding on city work qualified for a preference – or at least they did until Mayor Tim Keller’s administration reset the guidelines in January.

Keller’s administration kept the incentive program but eliminated all wiggle room, following Bernalillo County’s lead.

Now, only vendors who compensate men and women equally for comparable jobs can get the gender pay equity bonus during the city’s vendor selection process.

“The playing field won’t be level until women, and especially women of color, earn fair wages compared to their counterparts,” Keller said in a written statement in January. “Part of that means rewarding companies that walk the walk.”

But one expert is warning that the decision might backfire, undermining the program’s overarching goal of bridging a long-standing pay gap by leveraging the city’s contracting power.

Martha Burk – the consultant who designed the pay equity initiative Albuquerque rolled out in 2015 – said she worries City Hall has moved the incentive too far out of reach by adjusting the qualification from 7% to 0%. Companies working to narrow the divide between men’s and women’s salaries may not bother now, she said. Even before the change, qualifying for the bonus was a relatively rare feat.

“It will be too hard to do; I think you have to incentivize people gradually to get them from point A to point B, and this to me seems like too big a step,” Burk said.

City Councilor Diane Gibson is also concerned about the reset to 0%. Gibson and fellow Councilors Klarissa Peña and Brad Winter co-sponsored the legislation creating the preference for city vendors that were approaching gender pay parity. She said many companies had such a long way to go that accelerating the standard jeopardizes progress.

“I think it effectively just kills the whole program that we worked so very hard on,” Gibson said.

The move to 0% is the latest in the city’s yearslong work on gender pay equity.

In 2013, the City Council passed legislation requiring that outside contractors submit a pay equity reporting form with their bids or proposals to determine the deviation between men’s and women’s compensation.

Two years later – with support from then-Mayor Richard Berry – the council passed Gibson’s ordinance creating a preference for bidders with a gender pay disparity of 10% or less.

The city awarded those companies a “Pay Equity Business Certificate” worth a 5% preference. It meant a company’s price proposal was considered to be 5% less than its actual bid during the city’s vendor selection process.

$175 million spent in 2020

City contracts are big business; in fiscal year 2020, the city’s goods and services spending included $175 million through 371 competitively awarded contracts.

Burk, who modeled Albuquerque’s program on a similar system she developed for the state of New Mexico, said it put the city at the forefront of the issue nationally. She said she still fields inquiries from other cities around the country looking to try something similar.

Albuquerque’s pay equity bonus was designed so the city could reduce the allowable deviation; in 2017, the city trimmed it to 7% from the initial 10%.

Burk acknowledges that rewarding any kind of gap may seem counterintuitive. But she saw it as a necessity given the stubborn chasm between male and female salaries.

Even though New Mexico rates 15th nationally for gender pay equity, women working full time in the state receive an average of $8,789 less per year than men, according to the city’s Gender Pay Equity Initiative web page. That’s a 21% pay gap on average, although data collected through the city procurement process has shown gaps of up to 40%.

“We’d all love to see a 0% pay gap, absolutely. Nobody is a stronger advocate for pay equity than I am. … (But) I also knew if you go with too big a step too soon, they’ll say, ‘We can’t do that. Let’s just not try for this incentive,’ ” Burk said.

Even with the wiggle room, the bonus is not common.

Since 2015, only about 80 businesses have received the city’s pay equity certificates. There are 33 active certificates currently, according to a city spokeswoman.

A rewards-based approach for gradual improvement is logical, Burk said.

‘Now is exactly the time’

But Haley Kadish, who administers the city’s Gender Pay Equity Initiative, called the 7% disparity “arbitrary” and said the city’s move to 0% puts it in line with Bernalillo County and the Albuquerque Bernalillo County Water Utility Authority – two agencies that essentially piggyback on to the city’s certification system.

The county last fall was moving to amend its procurement code to match the city’s then-preference for vendors with a 7% or lower gender pay differential. The goal was to create consistency in the metro area and a universal Pay Equity Certificate that worked across the city, county and water utility, according to a county official.

But County Commissioner Charlene Pyskoty successfully pushed to limit the county’s gender pay equity preference only to vendors without any disparity. She said her “blood was boiling” at the prospect of incentivizing any level of inequity.

The commissioner said she does not share Burk’s fears about unintended consequences and wanted to push for progress.

“There should just be equal pay for equal work across the board, and I think now is exactly the time to look at this and do it,” Pyskoty said.

The city followed the county to “preserve consistency and maintain the cooperative nature of the initiative,” Kadish said.

Kadish said the city is working to advance the initiative in other ways, including transparency. By March, she said, contractor pay gap data collected through the procurement process will be publicly available for the first time online.

“Ultimately, very few vendors take advantage of the City’s pay equity preference,” Kadish said in written comments to the Journal. “The drawback of lowering the threshold from the arbitrary threshold of 7% to 0% will result in fewer vendors being certified. However, the City weighed the options and decided to move forward in partnership with the County and Water Authority.”

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