Gender Wage Gap: A Root Cause Analysis

April 28, 2016

 

The wage gap between men and women in the United States has become a hot topic during this political season. We've frequently heard the assertion that women make about seventy-seven cents for each dollar a man makes. The media was once again abuzz on April 12th, known as Equal Pay Day - the day women ostensibly stop working for "free" and begin earning on par with men. There has been some backlash to this as well, questioning whether that data is accurate, suggesting women's choices account for the majority of the gap, and outright calling it a myth.

The conversation deserves some nuance, but rarely gets it. It seems that much of the talk is in raised tones and extremes. I felt it was time to undertake a thoughtful, data-driven approach to exploring the topic, and launch a root cause analysis. I will refer to my findings in this post, but the full analysis can be found in the Recent Events section, with all of my sources.

 

Firstly, there is indeed a gap. Women do earn less than men when controlled for education, experience and skills. Is seventy-seven cents always accurate? In short, no. The way this data is measured, whether based on annual, monthly or weekly salary, can vary widely. The gap varies wildly when factors such as race and geographic location are considered. It is important to note, however, that there is no measure that I have discovered that supported the assertion that the gap is a myth. It is real.

 

The challenge that I've uncovered in this analysis is in the remedy, because the root cause is not very often a simple case of "we pay women less." It seems that there is a confluence of many factors, some of which are overt and policy can address, and some of which are latent biases that no government, company or handbook is going to be able to punish away. For example:

  • Women experience harassment that dissuades them from accepting roles in leadership and particular male-driven industries. This can begin in grammar school, where girls are given the opportunity to participate in STEM programs, but when in high school, they are encouraged to select gender-aligning, lower paying majors.

  • Women are more likely than men to take time from work to care for a child or elderly relative. They are also more likely to decline a role with higher-responsibility for the loss of flexibility they would experience that would take them away from their duties at home.

  • Women are less likely than male household leaders to select the geographic location of the family. The man's job opportunities are usually the primary consideration in choosing where the family lives, meaning women are left to build careers around relocations, within the limits that may or may not be present in the locations chosen.

  • Women are more likely to be perceived negatively for having traits that make for good leadership, such as assertiveness and negotiation.

  • Women suffer from the perception that their work performance will suffer due to their caregiver duties, even if they never choose to have children.

  • High-performing and achieving women are more likely to suffer from Imposter Syndrome, leading them to attribute their successes to external, uncontrollable factors than their own skills and abilities.

How do we as a nation, or as business leaders, begin to address this? Our country has already learned that legislating against racism and sexism doesn't mean people aren't racists and sexists anymore. However, I do believe there is an opportunity in passing a national paid leave law. In nations where these types of laws exist (and they are not too hard to find - we are far behind our peers on this), not only are women able to recoup losses when they make the choice to care for a family member or have a child, but it also presents an opportunity to shift the culture. Paid leave laws should extend to men as well, and when given the same chance to take time off for these life circumstances, it begins to be perceived less as a "woman's issue" or a "woman's burden". Companies that encourage men to take their full allotment of time help to shift the cultural bias that causes women to lose out on earning opportunities across their lifetimes.

 

As a professional, I believe Human Resources has a big role to play in addressing this issue as well. As more states pass paid leave laws, we should continue analyzing the data to determine whether these laws help to reduce the wage gap or not. We should also take a look at our typical curricula for diversity training to ensure there is a discussion about gender biases, particularly among leaders. If our current resources aren't filling that void sufficiently, we should work to create material that will do so. There is also a big opportunity to work with organizations that attempt to study and address the gap, such as Arjuna Capital, who is spearheading this effort in the tech sector.

 

My biggest takeaway from this project is that the nature of this issue and the root causes of it make it difficult to pass a law or deploy a formula that will erase it overnight. However, if we are to be a nation that values equality and bootstrapping above all else, we need to work to ensure that everyone starts out on an equal footing.

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