Dive Brief:

• Starbucks says it has closed all gender- and race-based pay gaps in the U.S., GeekWire reports. The coffee retailer vows to eliminate pay disparities for its entire workforce, which includes more than 238,000 employees worldwide. 
• The average pay gap between women and men performing the same work is 20%, with women earning 80 cents for every dollar men earn. For nonwhite women, the gap is even wider. Starbucks says it will calculate pay equity principals and share the results so that other companies can eliminate wage disparities among their employees.
• A study on the economy of Seattle, where Starbucks is headquartered, found that the average pay gap is 22%, says GeekWire. The gap is much wider among highly educated workers; women holding graduate degrees earn 66 cents for every dollar men with graduate degrees earn.

Dive Insight:

Starbucks, like Salesforce, Adobe, CitiGroup and JPMorgan, took bold, decisive action to eliminate pay inequities for women and minorities — partly driven by the moves of activist investors. Just under a year ago, Arjuna Capital withdrew its shareholder proposal to Starbucks after Starbucks agreed to examine their gender pay gap and released data regarding that gap. But the coffee maker is far from alone in seeing such pressure.

For employers to truly eliminate pay gaps, the effort will require expert use of data analytics and implementation of inclusive recruitment and promotion policies. Pay disparity also exists between white men and men of color; the disparity between black and white men is greater than that between men and women, generally. African-American men earn 70 cents for every dollar white men earn doing the same job, according to research from the San Francisco Federal Reserve, and women of color tend to see massive pay gaps, as well.

Companies that don't address pay inequities may continue to be dragged through the courts thanks to a number of states adopting pay equity laws, some with much broader takes on which jobs can be compared for equity purposes. The headache will only continue, experts say, so employers should get their houses in order now — especially now that salary history bans are also beginning to sweep the states.