Warren Will Deny Federal Contracts to Companies With Poor Diversity and Equal Pay Policies

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Elizabeth Warren Will Deny Federal Contracts to Companies With Poor Diversity and Equal Pay Policies

Senator Elizabeth Warren has announced a plan to lower the wage gap, particularly for women of color. What Is In The Plan? As part of her initiative, Warren would deny government contracts to companies with a history of unequal pay or not prioritizing diversity and raise the federal minimum wage to $15 an hour, among other changes.

Why Is This Important? Activist shareholders have been highlighting the issue of gender wage inequality for years. Earlier this year, Natasha Lamb, a managing partner at Arjuna Capital, examined the difference between the “equal pay gap” which is what women are paid versus their male peers, and “median pay gap,” which is the income chasm that results from women not having as many high-paying leadership positions compared to the men in their respective fields.

Many major companies have a wide median gap. What Can Shareholders Do About This? As Lamb pointed out, the best first step is for companies to admit they have a problem. Arjuna Capital urged 22 companies, including Citigroup, JPMorgan, Wells Fargo and Bank of America, "to publish their gender pay gaps on an equal-pay basis."

Cool. Problem solved, right? Er, not exactly. As is the case for all shareholder proposals, Arjuna Capital’s call for action is a “suggestion.” In addition to most of the major banks, she filed proposals with Amazon—who is currently vying with Microsoft for a $10B contract with the Pentagon—Intel, Facebook, Google and Mastercard to also disclose pay gaps. None of the companies passed the resolutions at their 2019 meetings, though Citigroup volunteered the gap information and vowed to narrow it.

https://finance.yahoo.com/news/elizabeth-warren-deny-federal-contracts-222241531.html