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The cost to close Google’s pay gap was surprisingly cheap. The question is, why is this correction necessary?

March 16, 2018

Google revealed yesterday that it cost only $270,000 to close the gender and race pay gap among 89 percent of its workers for 2017.

Breaking it down: Internal analysis found only 228 employees had statistically significant pay gaps. This means Google claims it had to spend only about $1,200 per worker affected  by the gap to make things equal.

But: Google has been analyzing its pay gap since 2012. In 2017, the company outlined how it calculates each employee’s salary. The last factor before wages are final is an adjustment based on gender.

A widening gap: Last year, Google reported that it found no pay gap for 2016 and that no modification was needed. (This was around the same time the US Labor Department accused Google of “extreme” gender pay discrimination.) That information makes this year’s $270,000 change even more of a curiosity.

The missing 11 percent: Google did not include 11 percent of its employees in the analysis because the small size or imbalanced nature of the job groups meant the data lacked “statistical rigor.” When this missing group includes higher-ups like vice presidents, it’s easy to suspect there might be more to this story.

At least they’re not the worst offenders? As a comparison, Salesforce has to spend $3 million each year to eliminate its pay gap. And it is likely that financial firms Goldman Sachs and HSBC will need to spend a lot more than Google to close their pay gaps of 55.5 percent and 59 percent, respectively.

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