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Why Women Are Worth (Less)

Posted: 08/09/11 02:06 PM ET

Recently, I came across a post on Daily Worth, a financial blog for women, written by a young woman who had just been offered a promotion at her daily newspaper: social media editor. She was currently making $32,500, but after doing some research, realized that her new job was worth $40,000.

So she screwed up her courage -- her company was having a hiring and wage freeze, after all -- marched in to see her boss, and negotiated salary:

Although I could feel the pressure, I said it would be hard for me to take the promotion for less than $36,000... I left our meeting without accepting or rejecting the position. The next day my boss called me with an offer of $35,500 plus a monthly cell phone stipend of $75, bringing the total to $36,400 annually. I accepted.

Happy ending, right? Not by my math. What about that missing $3,600?

As we've written before, we've become used to that seventy-seven cents on the dollar business. Used to it, but still peeved. And really, it's worse than that. In a study of University of Chicago MBAs -- which allowed labor economists Claudia Goldin and Lawrence Katz to compare "apples to apples", controlling for everything from biz school courses to job experience to hours worked when it came to gender disparities -- they wrote in a Q-and-A on the SuperFreakonomics virtual book club that for new MBAs, there was a just a modest wage gap -- favoring men, of course -- out of the blocks. But here's where it starts to stink:

Fast forward 10 to 15 years, and the earnings gap between our male and female MBApples is about 40 percent for those who were observationally equivalent at graduation. But almost all of that huge difference can be fully explained by the greater number of career interruptions and lower weekly hours experienced by the women (mind you, they still work a large number of hours). One of the reasons for the large gap in earnings between male and female MBAs is that the cost of career interruptions is very great in the corporate and financial sectors. These costs are considerably lower in medicine, and somewhat lower in law and academia.

To be sure, for many women the time out is a choice, and one that works well for them and their families. Still, for those who jump back on the career ladder, they rarely make up for that lost time -- or salary. Still, though motherhood and lower-paying careers are convenient excuses, they're handily debunked by Ilene Lang, who's with the women's research group Catalyst. "From their very first job after getting their MBA degree, women made less money than men," Lang told NPR . "On average, $4,600 less."

Very first job? MBA? Well, that settles the time-off-for-kids/lesser-paid-career-track thing. And Catalyst's findings held even for women without children. For Lang, this says old stereotypes persist. "There are assumptions that women don't care about money, which is crazy!" Lang said in that same piece. "There are assumptions that women will always have men who will take care of them, that women will get married, have children, and drop out of the labor force. All those assumptions are just not true."

You mean we work for more than pocket money? But the numbers are worse than we think, according to the Center for American Progress: Working women in the United States lose, on average, $431,000 over a forty-year career. Women without a high school degree lose $300,000 on average, and women with a bachelor's or graduate degree lose $723,000 on average. In fact, the analysis shows that the more educated and professional a woman may be, the more she loses over a lifetime of work, simply because of her gender.

But getting back to that blogger from the Daily Worth, we can't help wondering if there is something else at play as well: we don't speak up. In fact, we grab that 77 cents on the dollar and say thank you very much -- or, as that blogger revealed, feel as if we are letting someone down by asking for more. Is it because we women are hard-wired to please? That we have a hard time shaking off the good-little-girl mantle? All of which comes back to bite us in the paycheck. Linda Babcock and Sara Laschever, authors of Women Don't Ask note:

  • By not negotiating a first salary, an individual stands to lose more than 500,000 by age 60 -- and men are more than four times as likely as women to negotiate a first salary.

  • Women often don't know the market value of their work: Women report salary expectations between 3 and 32 percent lower than those of men for the same jobs; men expect to earn 13 percent more than women during their first year of full-time work and 32 percent more at their career peaks.

And in most cases, men do. As we wrote on Equal Pay Day, a non-holiday that marks the date in April that women's salaries catch up with their male counterparts' (That's right, as compared to the dude in the next cube, from January 1 until April 14, you, sister, were working for free): Every time we change jobs and are asked for a salary history, we're at an increased disadvantage -- and coupled with this gender-based pay discrimination disparity, well -- that disparity is going to do nothing but get worse.

Sigh.

Just yesterday, I was talking with my big sister. She was asking about our book and I was grousing about the fact that, in today's publishing climate, authors have to do a lot of self promotion. "I hate it," I moaned. "And I'm no good at it."

She smiled, obviously older -- and wiser, too. "If you were a man," she said, "you wouldn't have a problem with it, now would you?"

 
 
 

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Recently, I came across a post on Daily Worth, a financial blog for women, written by a young woman who had just been offered a promotion at her daily newspaper: social media editor. She was currentl...
Recently, I came across a post on Daily Worth, a financial blog for women, written by a young woman who had just been offered a promotion at her daily newspaper: social media editor. She was currentl...
 
 
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07:57 AM on 09/04/2011
This is just a bunch of feminist crap. There is a wage gap because there are underlying differences between men and women. It is simple as that. No study can control for observable characteristics and sometimes observable statistics are not accounted for. Being an economist, I have actually studied this issue myself and don't have to resort to studies biased for political agendas. All you have to do to prove it to yourself that there is no "wage gap" for equal candidates is ask yourself this question: If an employer could hire a woman for X% less, for the same quality of work, experience, etc., why would they ever hire a man? Boom.
12:14 PM on 08/13/2011
I agree with others below that this claim that women get unfairly paid is getting tedious. I heard a study on cable news a while back that single women under 35 make 8% more than single men under 35. So women unfrettered by children and marriage are doing just fine.
What we need to learn more about is what issues women are having once they get married and have children. Are those women being treated unfairly or are they just making choices to accommodate their families? Articles like this one accomplish nothing and make women feel like victims.
05:09 AM on 08/11/2011
How can you complain though if you choose to take a break from the industry?
04:19 PM on 08/10/2011
The article perpetuates the myth that women earn $0.77 on the dollar than men do. While it may be mathematically true for all women and all men, the difference is insignificant when you look at single women with no children versus men with the same education and experience.

The bottom line is that only women can give birth and since most women have children at some point, they will be taken out of the workforce for at least some period of time. Not only that, it is during the ascent of someone's career in their late 20s and 30s.

The authors state, "Happy ending, right? Not by my math. What about that missing $3,600?" That assumes that the person's research was accurate and the $40K figure was solid. It also does not explain any other factors that could affect pay beyond gender, like the financial health of the company, if the boss handed out a raise to someone else and was holding the line here, or any other of a myriad of factors.

MBAs from Univ of Chicago earn about $125K per year starting salary depending on industry so $4600 does not sound like much. A salary of $120K would be considered close to $125K. There may be factors like geography affecting the difference but not considered in the article.

The bottom line is that if a woman with the same education and experience chooses not to have children will earn essentially the same as her male counterpart.
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HUFFPOST SUPER USER
becky bradshaw
"In a time of universal deceit, telling the truth
04:00 PM on 08/10/2011
1. Men go into technology and hard sciences more than women.
2. Men are more likely to take hazardous jobs than women, and such jobs pay more than cushier and safer jobs.
3. Men are more willing to expose themselves to inclement weather at work, and are compensated for it ("compensating differences" in the language of economics).
4. Men tend to take more stressful jobs that are not "nine-to-five."
5. Many women prefer personal fulfillment at work (child care professional, for example) to higher pay.
6. Men are bigger risk takers than women, in general. Higher risk leads to higher reward.
7. The worst working hours pay more, and men are more likely to work these hours than women.
8. Dangerous jobs (coal mining) pay more and are more male dominated.
9. Men tend to "update" their work qualifications more than women do.
10. Men are more likely to work longer hours, and the pay gap widens for every hour past 40 per week.

Reference: "Every Feminist's Nightmare?", Thomas J. DiLorenzo, http://www.lewrockwell.com/dilorenzo/dilorenzo160.html
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MissTake1989
Equal means equal, hypocrites.
11:06 PM on 08/10/2011
None of that matters...equal is either equal or it's unequal.
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Morrisfactor
Just a little bent
01:22 AM on 08/12/2011
MissTake-

So, to make things "equal", a male logger (one of the world's most dangerous occupations) should be paid the same as a female clerk who works in an air conditioned office and whose most dangerous injury might be a hang nail?

I don't understand your logic, unless you just want extra money for nothing (which I suspect is the case)
12:09 PM on 08/10/2011
How do you propose the social media editor should have replied? What do you think the company would have done if she had, respectfully, demanded an increase to accept the promotion? I'm sorry but women, regardless of how they present themselves, are often looked on as ungrateful, whiny, and/or difficult if they ask for more while men are often looked on as "taking up for themselves" and/or "taking charge of their careers". I don't know why but that's reality. No one wants a whiny, ungrateful, difficult employee. And whiny, ungrateful, difficult (seeming) employees aren't going to get the opportunities to help them advance. The social media editor handled as she did because she didn't have a good answer to how to handle it differently and successfully. I'm sure she would appreciate some ideas for future.
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inmyhumbleopinion
Vote third party.
01:50 PM on 08/10/2011
Why would a woman asking for a raise be "whiny" but a man asking for the same thing simply a "good negotiator"? I think that's exactly the point the authors are making. We have to stop making it easy for employers to pay us less.
02:16 PM on 08/10/2011
Agree completely. The authors make some GREAT points. My question is how could the social media editor have handled differently and successfully.
03:28 PM on 08/10/2011
I agree it's not fair, but it takes a long time ffor attitudes to evolve and the social differences are real. If the majority of bosses were female, I suspect it would be men doing the griping.
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MissTake1989
Equal means equal, hypocrites.
06:28 AM on 08/10/2011
"Is it because we women are hard-wired to please?"

Use of the hard-wiring argument validates men who use the same argument about "spreading their seed."

So, no.
03:24 PM on 08/10/2011
One can biologically explain the "spreading the seed" urge without culturally validating it.
HUFFPOST SUPER USER
MissTake1989
Equal means equal, hypocrites.
11:04 PM on 08/10/2011
If you explain it biologically...you validate it.

Unless your "culture" is to ignore science.
11:36 PM on 08/09/2011
This is a great article!
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MissTake1989
Equal means equal, hypocrites.
04:59 PM on 08/09/2011
I had some "guy" I work with try to tell me that since women's health care costs more than men's and men pay equally into Medicare, etc. that men are subsidizing women's health care costs. And that justified the pay gap.

Can you believe this sexist doesn't want to pull his own weight?
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Morrisfactor
Just a little bent
01:29 AM on 08/12/2011
Maybe his reasoning isn't so bad.

Men pay more for auto insurance because they have more serious accidents. Women therefore pay less and seem to have no remorse at doing so.

Since women use more health care than men, why don't they pay their fair share as men have to do for auto insurance? Why aren't men charged less for health care, so we can have no remorse in paying less?

Funny how you want it your way on both things, that is inconsistent reasoning.
03:56 PM on 08/09/2011
The authors are perpetuating things that simply aren't true. Women don't make less than men right out of school and overall they only make less than men because of certain choices. Single women make more than single men under 30 and have for decades according to studies.

http://www.time.com/time/business/article/0,8599,2015274,00.html


If women really made 77% of what men make then companies could hire 4 women for every 3 men that they hire. Those women heavy companies would put the men heavy ones out of business. It would be such an advantage that the demand for women would increase and drive their wages up and the wages of men down until there was parity. That is how a free market works.
12:26 PM on 08/10/2011
Per the article you reference, "Here's the slightly deflating caveat: this reverse gender gap, as it's known, applies only to unmarried, childless women under 30 who live in cities. The rest of working women — even those of the same age, but who are married or don't live in a major metropolitan area — are still on the less scenic side of the wage divide." The article doesn't state the percentage of women who are childless, unmarried, under 30, and live in major metropolitan cities; however, it seems to support that the majority of women still make less than men. As far as the free market works, do we have some support that companies are making their decisions based upon hiring/keeping the most employees for the least wages? We might want to mention this to these large companies paying exorbitant salaries to their CEOs who run them into the ground. Apparently, they don't realize they could be getting 2, 3, 4... for the price of one.
03:53 PM on 08/10/2011
On average married women and those over 30 aren't pursuing careers to the same extent that men are. 75% of men say that income is their primary factor in choosing a job. Only 25% of women say the same thing. Women make different choices in terms of careers. Men are 20 times more likely to die on the job than women. Not because their lives have less value, but because they much more frequently choose jobs that have more inherent risk.

For years NOW's website used the truck driver versus secretary comparison. They blamed truck drivers being paid more on gender. Think about it though. Truck drivers work long hours in the cab of a truck. Have to frequently spend nights away from home and don't really have any flexibility in terms of taking off an hour or two early to take care of domestic responsbilities. Women on average pick the kinds of jobs that let them balance work with other things. Frankly it is the wise choice if you ask me. Nobody says they should have worked more while on their death bed.
04:28 PM on 08/10/2011
The big issue that makes women earn less than men, but is overlooked by feminists in these studies is having children. Women have children primarily in their late 20s and 30s which is prime time for laying the basis for a successful, upwardly mobile career. If a person takes themselves out of the workforce 2.3 different times for 8-12 weeks, it will affect their career whether it is a man or a woman.

Also, women after having children will often take positions with flexibility or closeness to home because they are the primary care givers of the children. They are also more likely to be the ones who get called when the kids are sick or something is wrong with daycare. We can argue whether this is right or not but that is up to the individual couple who is having the children. The jobs that are most flexible tend to pay less such as school teachers (match children's schedule), nurses (tend to be paid hourly and can work off hours when spouse is home), etc.

How can an employer pay someone who has left the workforce for 6 months over the last 5 years and cannot stay late and work weekends because of commitments at home the same as a person who is willing to work whatever it takes? This is true whether man or woman.
03:43 PM on 08/09/2011
Millions of wives still choose no pay at all. In fact, according to Scott Haltzman, author of "The Secrets of Happily Married Women," stay-at-home wives, including the childless who represent an estimated 10 percent, constitute a growing niche. "In the past few years,” he says at http://tinyurl.com/6reowj, “many women who are well educated and trained for career tracks have decided instead to stay at home.” (“Census Bureau data show that 5.6 million mothers stayed home with their children in 2005, about 1.2 million more than did so a decade earlier....” at http://tinyurl.com/qqkaka.)

As full-time mothers or homemakers, stay-at-home wives earn zero. How can they afford to do this while in many cases living in luxury? Because they're supported by their husband, an “employer” who pays them to stay at home.

So if millions of wives are able to accept no wages, millions of other wives are able to accept low wages, refuse overtime and promotions, work part-time instead of full-time, take more unpaid days off, avoid uncomfortable wage-bargaining (http://tinyurl.com/45ecy7p) — all of which lower women's average pay. Women are able to make these choices because they are supported or anticipate being supported by a husband who must earn more than if he'd chosen never to marry. This is how MEN help create the wage gap.

See “The Ledbetter Fair Pay Act” at http://tinyurl.com/pvbrcu
05:42 PM on 08/09/2011
good points... frankly, i think that a lot of women will be very fulfilled through being a full-time mother- but not all of them, of course. It is unfair that they average less pay overall, but we are still only about a century from the women's rights movements in the US; give it time... i think what is more damaging to society than lower wages for women is the fact that so many women HAVE to work to keep their household floating - to pay rent, bills, etc- all of which comes at the expense of the children they may have, who see their mother (And father!) less and less... this lack of attention for kids and their entry into the full-time bureaucratic education system ultimately deprives children of some of the only deep emotional relationships they may ever have- with their own parents - and sets the stage for a lifetime of social problems, because of this lack of true emotional development in their early life. Women (and men) who are parents but voluntarily choose to do this, to me, are essentially ignorant of the greater meaning of life and family- to the detriment of all.