Why the pay gap persists
A new Government Accountability Office report, highlighted at a Congressional hearing this morning, finds that female managers earned just 81 cents for every dollar earned by their male counterparts in 2007, compared to 79 cents in 2000. Women make up just 40 percent of this country's managerial ranks, little changed from the 39 percent ratio in 2000. And working mothers with children under the age of 18 account for an astonishingly low 14 percent of all managers, a number that hasn't changed since 2000.
Countless attempts have been made to explain the persistence of the wage and gender gap in management, which has hovered at around 80 cents on the dollar for so long that the number has become conventional wisdom. It's discrimination, women's groups say. It's education, others argue. Women don't negotiate well for raises, some say. Or, my personal favorite, they simply aren't tough enough to reach the highest levels of corporate power.
The GAO report does not make an effort to explain or analyze its findings, which largely reveal that despite relative economic health (the new numbers are for 2007, remember), little has changed. But it does, for the first time, take an in-depth look at the impact of motherhood on the pay discrepancies of male and female managers, which offers revealing clues for the primary reason this perennial leadership issue remains.
Let's take a look at the common explanations one by one. Discrimination surely plays a role, and it's one that shouldn't be discounted. But years of diversity training and equal-opportunity policies have barely moved the needle on the pay-gap issue. So while discrimination's still alive and well in many offices, it's only one reason, and likely a small one at this point, for why the gap persists.
Education is finally out as a rationale. Last year, women earned more PhDs than men for the first time. For every two men who graduate from college or receive a graduate degree, three women do, this story in Time reports. That's the inverse of the ratio in place when the baby boomer generation headed to college. The GAO found similar improvements: among women aged 25 to 64 in the labor force, the proportion with a college degree roughly tripled from 1970 to 2008, it reports.
And yes, it's true that few women have reached the highest levels of corporate power: the numbers become far grimmer when you examine just the executive ranks of managers. In 2009, just 13.5 percent of executive officers in corporations were women, according to the nonprofit Catalyst. That same year, only 6.3 percent of the top earners in business were women. And an amazingly low 2.6 percent of CEOs among the country's 500 largest corporations are women. In raw numbers, that means just 13 women have reached this high echelon of corporate power.
But while some women may not negotiate well, and others may shun the hot seat, I'd argue the main reason few reach that top rung of the corporate ladder is instead that the extraordinary demands on executives' time, or even on senior managers' time, are not compatible with raising a family. In a corporate world that demands 24/7 hours and far-flung globetrotting, many women--and increasingly, men--decide the sacrifice is not worth it.
The struggle to balance work and family is apparent in the GAO's numbers--remember it found that just 14 percent of all managers are women with children under the age of 18. And it helps decipher the pay gap, too. Working-mother managers make just 79 cents on the dollar, compared to their male peers, lower than the 82 cents that non-mother female managers receive. Recent studies have shown that-- thanks largely to education gains--young, single, childless women actually out-earn their male peers by a median 8 percent. After that point, female managers with children are simply more likely than men to scale back their hours or be the ones who have to miss the important client dinner, all of which can result in fewer promotions and lesser pay.
The incredible persistence of the wage gap is a complex issue, one that involves all of the above issues in some way. But I'd argue that until leaders truly adopt family-friendly policies and workplaces--much progress has been made, but more is needed--and until more is done to support working mothers with greater childcare resources, the wage gap isn't likely to budge much more.
September 28, 2010; 12:11 PM ET |
Personal Leadership Journey
Women in leadership
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