Catalyst Blog

Earlier today, I testified before the Joint Economic Committee in Congress. No, Stephen Colbert was not there right along with me!

The hearing, titled “New Evidence on the Gender Pay Gap for Women and Mothers in Management,” examined, among other topics, new findings by Catalyst on pay and corporate leadership gaps. These gaps persist across most industries—and have closed at a glacial pace.

The latest Catalyst data on women in Fortune 500 companies is alarming. Although women are 46.4% of total Fortune 500 employees, they are 13.5% of Executive Officers, hold 15.2% of board seats, and are 2.6% of CEOs. If inequities persist in America’s most powerful and influential companies, they are present in smaller businesses too.

On the issue of the pay gap, I testified how in 2009, women made up only 6.3% of top-earning Executive Officers within the F500 and discussed how our “best and brightest” women—M.B.A. grads—still earn less than equally qualified men, regardless of parenthood status. On average, women earn $4,600 less in their first post-M.B.A. job. And this pay gap widens over time.

To help explain to Congress why these gaps exist—and have remained largely steady over time—I recounted a simple test I often perform during lectures. I ask audiences to close their eyes and picture a business leader. How often do they imagine a woman or someone ethnically or racially diverse? Not very.

I doubt many lawmakers attending the hearing did either.

And this is the problem. The notion that women are less strong and less committed—and that trusting their judgment to lead is risky—remains entrenched. Too many people—women and men alike—think of a male when asked to think of a leader. It’s engrained in our conscious and reinforced by media and the images we see everyday. But it needs to change.

By shining a light on pay and leadership gaps, I hope my testimony will inspire the change-makers in Washington to rise to the challenge. Holding a hearing on these issues was a great step forward.

Where are the women of Wall Street? According to the Bureau of Labor Statistics, 141,000 women—roughly 2.6% of female workers in finance—left the U.S. financial industry during the past decade. The drop suggests that women bore the brunt of the layoffs in the recent recession—a finding that dovetails with our discovery that women were three times more likely than men to lose their jobs during the recent recession. For more on this trend, plus the latest news on women and work, read on.

———————

Fruit of Life

Educate a woman…and save a life. The Bill & Melinda Gates Foundation estimates that increased education of women in 2009 prevented the deaths of 4 million children. How? Educated women are more likely to take their children to the doctor, seek preventative care, and create hygienic conditions in their homes.

READ: “Educating Women Saves Kids’ Lives,” by Tracy Clark-Flory, Salon, 9/17/10

Women on Wall Street

Brokerage firms, asset-management companies, and investment banks are losing women, especially young women, in droves. The number of women aged 20 to 35 working in the finance sector dropped 16.5% this past decade, while the number of men in that age group grew by 7.3%. Is sexism to blame? While industry-wide rates of sexual-discrimination charges dropped from 2000 to 2009, Meghan Muntean, formerly of Lehman Brothers, observed that “very subtle” sexist slights by male colleagues manifested in reduced bonuses for her female colleagues.

 READ: “Ranks of Women on Wall Street Thin,” by Kyle Stock, The Wall Street Journal, 9/20/10

Head of the Class

For the first time, more women earned Ph.D. degrees this year than men. During the 2008/2009 academic year, 28,962 Ph.D.s went to women compared to 28,469 to men. While a milestone, I’ll hold off celebrating until we close the pay gap in academia. Men still earn more than women at every level of academic rank.

READ: “Report: More women than men in U.S. earned doctorates last year for first time,” by Daniel de Vise, The Washington Post, 9/14/10

 Heading UN Women

Michelle Bachelet, the first woman elected president of Chile, will head UN Women—the new UN office tasked with advancing gender equality worldwide. “We have to make sure that women’s issues are an essential element on the agendas of all heads of state, all governments,” said Bachelet following the announcement.

READ: “Former Chilean President to Lead New U.N. Agency,” by Neil MacFarquhar, The New York Times, 9/14/10

 Sexism Found

The New Agenda, a women’s advocacy group, seeks to boost women leadership and expose the sexism and misogyny that pervades popular culture. In this video, New Agenda President Amy Siskind discovers that more than half of the people she spoke with in Hudson, NY, could not define sexism—and 1 in 3 thought some women deserve sexist treatment.

WATCH: “Searching for Sexism: Episode 1,” The New Agenda, 9/15/10

Here we go again. Sometimes news—even good news—gets blown out of proportion. That’s what’s happening now with the gender wage gap.

Recent headlines like “What gender pay gap? Young single women making MORE money than their male peers in America’s cities,” and “Workplace Salaries: At Last, Women on Top,” imply the gender pay gap has closed for all women. But it hasn’t. The gap is alive and well.

These stories were pegged on recent market research that found that single, childless women aged 22 to 30 earn, on average, 8% more than their male counterparts in select U.S. cities. This important finding—largely reflective of increased rates of higher education among young childless women who work in cities with a knowledge-based economy—is good news. But the catchy headlines do not reflect the whole story.

The market study compared young women and men with different educational backgrounds. But what happens when you compare the salaries of women and men side-by-side with the same degree?

In Catalyst’s Pipeline’s Broken Promise, we found that women with M.B.A.s start behind, and stay behind, men with the same degree. In fact, women earn $4,600 less than equally skilled men in their first job out of business school—and this pay gap increases over time. And according to the latest U.S. Census figures, the median salary for women with Master’s degrees is actually lower than the median for men with only a Bachelor’s.

Does this seem fair to you?

I welcome research indicating that some young women in some cities are more than holding their own with wages. But for most women, it’s not yet time to break out the champagne.

Like the “mancession” stories that proclaimed new opportunities for women to advance in the absence of men, a lot of the recent pay gap coverage overstates the facts and does not take into account all the nuances of the data.

Context is king. Don’t lose sight of the larger picture and what still needs to be fixed.

Last week, I wrote about Catalystos—guys who are not afraid to stand up against gender inequity. These men are active role models and partners in our challenge to stamp out sexist stereotypes, ingrained biases and the barriers holding women back from leadership.

With a view to amplifying their voices, I asked some of the men of Catalyst to tell me why they support our mission. Some appeared in my previous post; here are more. These men are part of the solution. Please help me spread their inspiring message far and wide.

————

Josh, Member Relations:

I have seen the effects that a glass ceiling can have on a woman’s career and even her own self-confidence. This was the case with my mother, and the story of my “a-ha” moment. My mother has had, in my eyes, a very successful career in the financial industry, yet she doesn’t think so. The company she worked for (which will remain unnamed) passed her over for promotions into the executive level time and time again, despite her obtaining an M.B.A. and consistently excellent performance reviews.

Her company, for some reason, gave her a job level that was rarely used between the most senior directorship and VP, but would not give her what she coveted – that VP title. It is upon reflecting back at her struggle that I realize it wasn’t an issue of her not being qualified, and to be fair, I don’t think it was outright discrimination. I think as a working mother, she never joined “the boys” at the bar or on the golf course. She came home to spend time with her family. It wasn’t that she didn’t do a good job, it was that she had far fewer opportunities to connect with the right people.

The experience my mother went through in the corporate world, as well as my own awareness of discrimination as a gay man, led to my studies in gender and sexual diversity and the development of a real sense of social justice and a drive to fight for equality. I decided long ago that I needed to contribute to something positive and feel as though I am making a difference.

Thomas, Member Services:

I’ve been interested in the topic of gender since sociology courses in undergrad—it wasn’t just the classes that affected me, though. My time at college coincided with eye-opening experiences involving race, life, gender and sexuality. Things I wasn’t prepared for coming from a corn-fed, Midwestern background. Anyway, I remember when we first began talking about the global implications of patriarchy in class—in patriarchy, no one wins, not even men. Understanding the shades of inequity helped me understand that while the system we live in may benefit some, it comes at a cost to everyone.

When it comes to women in business, it seems as if the workplace is one of the most important places to deconstruct patriarchy. When women have increased economic power, many of the other realms of patriarchy can come crashing down, too.

Brian, Marketing:

I care about opportunities for women and work because my mom was actually fired from her job teaching in the early 1970s in Boston for getting pregnant! That’s right, the policy in the Dorchester School District at the time was that pregnant women were not allowed to teach. After my parents were married and my mother was pregnant with my older sister, she tried to hide it from the school principal. But after five months, it was obvious she was pregnant, and the principal pulled her aside—and fired her on the spot. She never worked in education again. I hope to prevent discrimination along these lines for others.

On a bigger level, I really believe in the concept that if you invest in women, you invest in a better world. A woman with an education can teach her children important skills. And she can open a business. That business can bring in more money for her family, and it can improve everyone’s health. The growing business can hire more people and help them financially, too. In turn, this improves a local economy, and the wider economy as well. The more visible women become in business, the more others will follow. And the more everyone’s life can improve.

A little-noticed provision in new U.S. legislation requires all federal financial agencies and firms to establish an Office of Minority and Women Inclusion to boost diversity. Banks and firms that fail to diversify their ranks do so at their own peril. According to the rule, failure to make “a good-faith effort to include minorities and women in their workforce” can result in cancelled government contracts. More on this ground-breaking provision in today’s C This.

—————

Laying Down the Law

Championed by California Democrat Maxine Waters, a powerful provision within U.S. financial reform legislation will hold federal agencies responsible for failing to diversify. “Firms must take steps to be more reflective of America,” said Michael Yaki of the U.S. Commission on Civil Rights. “This is a wake-up call for Wall Street.”

READ: “Bill Aims for Diversity on Wall St.,” by Julia Love and Jim Puzzanghera, The Chicago Tribune, 8/29/10

Stop, Think, Act

“Would I want my daughters working here?” It’s a simple question, but it stops many men in their tracks. “If the answer is no, then you should own part of the solution,” insists Deloitte’s Ann Weisberg.

READ: “Engaging Men in Culture Change: “Would You Want Your Daughter to Work Here?” by Tina Vasquez, The Glass Hammer, 8/31/10

CEOs Speak

What traits do more than 300 CEOS from 40 countries have in common? Researcher Robert Rosen endeavored to find out.

READ: “The Secret to Leadership Success,” by Harvey Schachter, The Globe and Mail, 8/9/10

A Deadly Figure

Since the start of this year, The New York Times has published 698 obituaries— and only 92 were of women. This statistic made Fast Company magazine cofounder Bill Taylor wonder “about who deserves such recognition in the first place, and what their stories might suggest about a life well-lived.”

READ: “The New York Times Is Dead Wrong,” by Bill Taylor, Harvard Business Review, 9/2/10

No Trend Here

New market research has found that single, childless women aged 22 to 30 earn, on average, 8% more than their male counterparts in many U.S. cities. Is this a cause for celebration? Not so fast. “This small slice of data is unlikely to be indicative of a larger, penetrating trend,” wrote DailyFinance’s Melly Alazraki.

READ: “Young Single Women Now Earn More Than Men,” by Melly Alazraki, Daily Finance, 9/1/10