As diversity and inclusion become more and more a topic of everyday conversation in the workplace, it becomes more important to look at the disparate realities of diverse people’s roles in organization – how they’re paid, what their work ethic is like, and how it’s affecting our organizations.
On average, women only make about 80 cents on the dollar compared to men in similar roles. Women are 50.8 % of the U.S. population and earns 58% of all degrees in the U.S. So why are they only occupying between 12% and 30% of leadership positions in education, law, medicine, and finance, just to name a few?
To start – let’s think about what happens when you’re hired for a job. First, you’ve got to fill out all of the necessary paperwork, as well as discussing your salary. According to a survey of professional graduate students by Linda Babcock, a professor of Carnegie Mellon University, found that only 7% of women attempted to negotiate their initial salary offers, while a staggering 57% of men negotiated. To continue on this let’s say that we’ve got a company who is going to hire 100 people for the same exact position, 50% men, 50% women. They’re told that their initial offer is to be 40k a year, but they will go up to 44k. Now let’s say that out of these people, the same ratio of men vs. women attempted to negotiate their salary up to 44k (so 57% men and 7% women). This means that we have 3.5 women (we’ll round up to 4) and 28.5 (29) men who negotiate. If half of all the people who attempted to negotiate their salary get what they wanted then we’ll have 14 men and 2 women making 44k. This makes the average salary for women $40,160 and the average salary for men $41,120.
With the information given in this example, there’s no wrongdoing by the employer, they want to save money as well as get the best people they can. However, this is just a lollipop-fairy tale example, and in many male-dominated industries, such as tech, women are offered between 4% and 12% less than men. This is a very concerning number, and if you break it down into race, it becomes even more so. Compared to the standard white man making a dollar, Asian women make around 86 cents, white women earn about 80 cents, black women make around 61 cents, and Latinas a disparaging 53 cents. Even if the average Latina negotiated an extra 25% salary every time they got a job (which is unheard of) they would still be making only 78 cents on the dollar.
So, what is causing this to happen, and how do we fix it? Let’s take a quick look at the history of women in the workplace, to put some of the pieces together as to how we’ve gotten to where we are.
For starters, it wasn’t until the industrial revolution that women entered the workplace. This was in a large part “thanks” to Alexander Hamilton’s suggestion in his “Report on the Subject of Manufacture’s” that women or children are an amazing resource which can be utilized for next to nothing. $3 a week for slave labor anyone? Lots of men unionized in order to defend against the threat to their declining pay and workplace status. Women were more often than not, left out of these unions, and were forced to start their own. By the 1830s the ten hour day was the standard demand from unions everywhere, but it wasn’t until 1869 that President Grant issued the National Eight Hour Law Proclamation.
Women in the workforce took a big hit during the Great Depression thanks to all-male unions arguing that they were the only ones who should be entitled to jobs. This quickly pivoted during WW2 when women began to take titles held by men who had been sent off to fight against the Nazis. This showed that yes, women indeed were capable of many of the same tasks as men. The next big boost for women in the workplace was the Civil Rights act of 1964, which outlawed discrimination based on color, race, religion, sex, or national origin. This then led to the Equal Employment Opportunity Commission, which opened even more doors for women in jobs that were once closed. Since then, the pay gap has been a persistent issue, which has gotten better over time, but that’s clearly still a topic for discussion. That being said, where do we go from here?
Well, there are some laws in different states attempting to combat this by banning questions about salary history, so that employers can’t arbitrarily give someone a number based on their history/claim they offered a lower number because of experience. California even signed a bill that made it so any publicly held company must have at least 1 woman on their board. That can be a double-edged blade, as there are many Californian women who have spoken about feelings of tokenism. That they’re only there to fill out a seat, and don’t feel as though they don’t have any actual say in the goings on in the company. There are studies that show that having a diverse board/workforce increases their effectiveness, due to the multitude of viewpoints shared on a regular basis, but if we just shoehorn in women to check a box, doesn’t that devalue the effectiveness of having a diverse board in the first place? And furthermore, doesn’t it seem logical that this could lead to more gender bias in the long run, should such a circumstance take place?
Empowering women from a young age so they’ll be confident enough to negotiate and fight for themselves is a great start for today’s climate, but what about the systemic problems that have existed for years? Often times, organizations have what is referred to as “the old boys club” which essentially refers to the fact that men often have easier time simply “schmoozing” their boss, rather than actually putting in the hard work required of most women to advance within an organization.
If getting laws passed is what you want, one of the biggest hurdles in terms of federal legislation is the fact that it has become such a bipartisan issue. 89% of left leaning women believe women face more difficulties in the workplace as men, whereas only 60% of right leaning women believe the same. The first step to getting anything done is getting everyone on board with the fact that this is a real thing that needs to be addressed.
Next is figuring out what exactly needs to be done. The option that makes the most sense to me is to have transparency when it comes to the hiring practice. First of all, it makes more sense for recruiters to say, “we have X job for between Y and Z dollars,” but it also erases doubt in potential recruit’s mind that they’re not getting screwed out of money, which makes the initial relationship stronger between employer and employee.
The next logical option is to either initiate or continue training and empowerment courses for women in the workplace, with the intention of promoting from within. Additionally, diversity and inclusion courses are also a great way to help people get over their unconscious biases towards one another, forged via today’s society and the people around you.
At the end of the day, regardless of which way you lean politically, it’s difficult to dispute that the wage gap exists. Even after you factor in the differential that men are twice as likely to work overtime than women, as well as the fact that women don’t negotiate as often as men, there’s still about a 5%-7% (depending on the source) gap between genders. That’s between 3.73 and 5.2 million women being paid less than men, and that’s unacceptable in this day and age.