Hear Me Roar: Why Gender Pay Inequity Matters

It’s taken me days to calm down enough to write this article. The topic of gender wage equity has become part of the discussion in the U.S. Presidential campaign, when the two major party candidates were asked about their views on the Fair Wage Act adopted four years ago.  In my opinion, one candidate’s response completely missed the point and the other did not go far enough.  This exchange was disappointing. Still, I didn’t get mad until I heard two self-satisfied fifty something male commentators, neither of whom I suspect have ever been asked “How can you manage your job and your family?” or “What will you do after the baby arrives?” dismiss gender wage inequity as irrelevant to the campaign.

Gender wage equity is an economic issue. When women make less money, they spend less money.  They buy fewer things that create other jobs. They save less for retirement. They accrue less in benefits like Social Security. Women are already more likely to be poor in old age, potentially resulting in greater dependence on social services. And since 47 percent of the U.S. workforce consists of women,  almost half the workforce underachieves economically. That’s why it’s an issue.

The Stubborn Facts

In the United States, women earn about 77% of every dollar a man makes. Many completely defensible factors go into determining a wage: demand and supply of skills, particular experience, education, and training. It’s reasonable to think there are legitimate reasons for the wage gap. But it’s far more difficult to understand in light of the conclusions from Francine Blau, a distinguished labor economist from Cornell University. Dr. Blau has research results that suggest that even when all human capital factors are controlled, such as the job, level of education and years of prior work experience, women still make 9% less then men. The wage gap remains stubborn. According to the Institute for Women’s Policy research, if the gender wage gap closes at the current rate, it will take until 2056 to reach gender wage parity.

Our Options

We don’t have to wait 44 years for approximately half of the workforce to be paid equitably. We don’t have to water down our expectations for women or over pay for poor performance or unprepared talent. Performance, experience and training are critical factors in determining compensation.  My point is that women who want to be in the workforce and have the ambition to succeed should have a shot at equity. Lots of thoughtful people have considered the issue and made serious recommendations. I like the ideas published by Diane Jacobs in 2010 as a result of a study including 22 large, mid size and small organizations around the globe, representing 630,000 people. Her topic was regarding getting more women in the talent pipeline, but her “Next Practice” suggestions seem relevant to the accelerating progress on the wage gap, too.

The following four practices are a combination of Jacob’s recommendations and those from other sources.  These are not easy and they won’t solve everything regarding wage inequity. But they can make a workplace fairer and fairer is what I’m going for.

1. Enlist Men As Change Agents
Men have the numbers. Approximately 84 percent of officers in U.S. companies are male. They either make the decisions or participate in the conversation when workplace policies and practices are discussed. The workplace can’t change without their engagement. Jacob’s study suggests, and I agree, it is time to skip the “women only” meetings or retreats where solutions are created then presented back to the guys at the top. Invite the men to be part of the process. Develop positive, concrete practices with them. Specifically describe the support necessary from them.  The vast majority of men want to be fair; give them a chance to show it.

2. Measure and Correct
Look at your key roles: the ones with the greatest opportunity for experience and reward. How many are held by women?  How many women are being actively prepared? Examine team or group performance-ratings over the past three years.  Any patterns? Look at compensation awards and ratios.  If there are differences, ask why. Your HR or Compensation department can help you with much of this analysis. There may be reasons for differences. There may be solutions for shortfalls. But you won’t know until you ask. Put this analysis into the annual year-end practice to avoid unintended inequities.

3. Weed Out Workplace Bias
Yes, it still exists. Some studies still show actual discrimination, such as the one that shows women having a greater likelihood of selection to a symphony if they audition behind a curtain.  But more subtle bias also sabotages women.

In her magnificent article Why Women Still Can’t Have it All, Anne-Marie Slaughter  calls out the unintended bias against working parents, especially women who “choose” to work. She describes a scenario that might seem familiar: The single employee who rises before dawn to train for a marathon is seen as goal oriented, disciplined and, an excellent manager of time. The working parent, who rises before dawn to get children up, organized and out the door is to be accommodated. Yes, some women choose to work and have children. But that often makes them more organized, determined and great at time management, not less. And, people choose to run marathons, too. When you hear bias in conversations or talent discussions, call it out.

4. Change the Culture of Face Time
Many organizations proudly tout their “flexibility” policies. Flexibility is an important aspect to attract employees in today’s mobile and wired workforce. But organizations must address the bias of face time to make it a legitimate option. So, what happens to the woman who goes home at 5:00 PM while her male colleagues stay until 8:00 PM? According to research conducted by Kimberly Elsbach and Daniel Cable, she’s more likely to get lower performance evaluations, smaller raises and fewer promotions, even if she logs on at home and works just as many hours as the guys in the office.  Flexibility may cost her money. Read the Elsbach and Cable article in the MIT Sloan Management Review for practices to put in place to change the culture as well as the policy on flextime.

When you ask one women for her opinion, you get one woman’s opinion.  Here is mine: We must encourage and support women who have the capability and ambition to reach their professional potential. We must reward them fairly so they can take care of themselves and their families now and in the future. It’s my issue. In  terms of  its economic impact, it’s our issue. And that’s why it matters.

References (And Great Reading on This Topic)

Weissman, Jordan (2012). Why Are Women Paid Less? The Atlantic. Available online at: http://www.theatlantic.com/business/archive/2012/10/why-are-women-paid-less/263776

Slaughter, Anne-Marie (2012). Why Women Still Can’t Have It All? The Atlantic. Available online at http://www.theatlantic.com/business/archive/2012/07/why-women-still-can’t-have-it-all/ 309020

Elsbach, Kimberly and Cable, Daniel (2012). Why Showing Your Face at Work Matters. MIT Sloan Management Review,  Summer 2012. Available online at: sloanreview.mit.edu/the-magazine/2012-summer/53407/why-showing-your-face-at-work-matters/

Jacobs, Diane (2010). Women In The Pipeline: Next Practice Actions. Ivey Business Journal, Nov/Dec. 201, vol. 74,no. 6., pp. 1-35. Available online at: www.iveybusinessjournal.com/topics/the-organization/women-in-the-pipeline-next-practice-actions#

8 thoughts on “Hear Me Roar: Why Gender Pay Inequity Matters

  1. Fabulously written Susan and this woman shares your view passionately. I for one feel this is a very significant issue in our national discourse and should not be so easily dismissed by anyone – man or woman. Employers are not doing enough and we as a society are not doing enough. I tire of the righteous indignation every four years and hope that this is finally the time for some concerted, consistent change.

    • Thank you, Mimi. I, too, don’t understand why an issue that effects over half of the population and almost half of the workforce is “irrelevant.” I wholeheartedly agree with Diane Jacobs that we must engage men in the issue. Appeal to their sense of basic fairness and develop solutions with them. We’ve been trying to push this rock up the hill ourselves for far too long.

  2. Terrific post. This should be picked up and discussed by the media. It is a vital issue, not just for women, but for the economy of our country. Thank you for expressing so well how many of us felt when the topic was not treated with the respect it deserved during the debate.

    • I, too, hope this topic gets further discussion. I wonder if it seems too abstract, so let me put some real numbers to it. Hypothetically, a women makes $2,500 per year less than a man with similiar experience and performance. With wage equity, she may be able to save that money for retirement. If she invested the difference in wages ($2,500) per year for 25 years at a 4% return, this woman would have $1,285,323 in retirement savings. That’s just from her contributions. It doesn’t account for higher contributions from her employer or higher social security pay outs. We are talking about life changing money, not pocket change.

  3. Thank goodness for a sane voice in all the insanity. Just this morning I explained to 15 young women and 2 young men that referring to all leaders as “he” causes unintended problems…. and got the response that “he” was an historical artifact and not a reflection of the realities of today’s workplace (by one of the two men in the room), and the young women told me that “he” and “guys” are a gender neutral term. Sigh.

    I was also pleased to see that you cited my alma matter the journal of the Ivey Business School. I’m glad to see that it is being read outside of our borders.

    My one concern is with respect to your comments about single people versus those with children. My personal experience has been that those who are childless are expected to pitch in and cover for those with children (whether male or female). The solution in my mind isn’t to pit one group against another, but to develop a deeper understanding of the roots of the wage bias against women. Is it that women don’t negotiate effectively? (There is some evidence of that). Is it that women choose “pink collar” ghettos? Is there a true bias against women? The issue seems to have more complicated roots than it first appears, and I’m not sure that legislation is going to solve the problem.

    But yes, it would be nice to hear some women on the presidential platform talking about the issue from a lived experience, rather than a group of men dismissing yet again another disparity.

    • Keep up the fight, Colleen. I enjoyed the reprint of Diane Jacob’s recommendations from Ivey.
      We see the bias against working parents differently. As someone who was childless and single in the workplace for almost 20 years, I too, wondered if I had to “pick up the slack” for others who left for family responsibilities. As I reflect back, that was a pretty arrogant assumption for me. Why did I presume that someone wasn’t contributing because they weren’t there? Why did I presume working parents needed “extra help”? Anne-Marie Slaughter’s comments are relevant to the rationalization that organizations can pay working mothers less because they are less committed, which results in lower performance reviews and compensation rewards. Note that people should not be rewarded for performance not earned, but this outcome should be based on facts, not assumptions.

      You are also correct that women can control their destiny to a great degree. But my reaction, and thus my post, is that the overall effect of wage inequity has a macroeconomic effect, which makes it an issue in our campaign. It is tragic that we need a law to enforce fairness, but that’s where we are. Voters in the U.S. can decide between a candidate who sees gender equity as a vital economic issue and one who does not. The bully pulpit held by the President of the United States provides valuable support to women standing up for equity, legislation or not.

      Good luck with your classes. Thanks for stopping by.

  4. Hi Susan,

    Thank you for your kind comments on my article and for integrating some of the recommendations into the clearly articulated themes of your blog post.

    I agree that pay equality continues to be an issue and we face the same issues here in Australia with an average 17% pay gap.

    Later in November, EOWA will release it’s Census on women in director and executive roles for the ASX500 listed companies – it is expected that the results will show the small amount of progress that has been made, has now stalled. In fact, when you look at those companies outside of the ASX 100 the results look less than promising.

    As you rightly point out we need to ‘measure and correct’ including how we select, recognise, nominate and select for promotion, and reward.

    Thanks again,
    Dianne

    • Hi Diane,

      I am so flattered that you liked this post! I am a great admirer of your thoughtful work to address issues of gender opportunity. Yes, it is a worldwide economic issue. The best we can do is to be our best to prepare for opportunities, insist on fairness and support other women. As the quote goes, “Well Behaved Women Seldom Make History.”

      I look forward to following your continued work.

      Best Regards,

      Susan

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