Catalyst Blog

Women earn, on average, 77 cents for every dollar earned by a man in the United States, with global percentages varying, but rarely better. Can having a daughter help close the gender pay gap, as some newspapers allege? In today’s guest post, Catalyst’s Jeanine Prime, Senior Director, Research, explores this question. According to Jeanine, the so-called “daughter effect” only goes so far.

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If you read the The Wall Street Journal or Financial Times recently, you might come to believe the so-called “daughter effect” can have a powerful impact on wages.

Recent coverage of the daughter effect cites an academic study of salaries of hundreds of thousands of Danish workers at 6,231 firms. The researchers found that when a male CEO had a daughter, the wage gap in their company closed, on average, by 0.5%. And when a male CEO’s first-born child was a girl, the wage gap closed by nearly 3%. The birth of a son had no effect on the gap.

“The first daughter ‘flips a switch’ in the mind of a male CEO,” the authors wrote, “causing him to attend more to equity in gender-related wage policies.”

This seems a bit of a stretch.

According to the original research, the daughter effect was only large enough to be called statistically significant in companies with 10-50 employees. This tells me that, at best, having a daughter might have a small bias-reducing effect on the salary decisions over which a CEO has direct control. This explains why in a small company, where the CEO’s span of control is more direct, the daughter effect can be felt.

But the effect of having a daughter is apparently not so mind-altering or powerful enough to inspire a CEO to display the kind of dedicated advocacy that’s needed to overhaul the institutionalized bias ever-present in many large companies with more complex talent management systems.

This rings true for me.  In Catalyst’s Engaging Men series, we looked at what factors make men advocate for gender equality on this grander scale, as visible gender equity champions within their workplaces. We did not find that having a daughter was a factor in creating champions. Rather, our research suggests that a deep commitment to fairness sets many champions apart. Having a working spouse can make a small difference too.

The bottom line: While I’m sure having a daughter can be transformative for some men, for most men it isn’t enough of a call to advocacy. And this makes sense.

Men have been having daughters since the beginning of time, but throughout the world, gender inequity and the wage gap remain entrenched.

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Jeanine Prime, Ph.D., Senior Director, Research, leads studies of women’s leadership and organizational effectiveness at Catalyst. She authored the first two studies—Women “Take Care,” Men “Take Charge:” Stereotyping of U.S. Business Leaders Exposed and Different Cultures, Similar Perceptions: Stereotyping of Western European Business Leaders—in Catalyst’s research series that examines gender stereotypes and the ways in which stereotypes contribute to gender disparities in the global workplace. Additionally, Dr. Prime leads cross-cultural research examining strategies for creating inclusive workplaces, including techniques for engaging men in gender diversity. She has a Ph.D. in Social Psychology from Cornell University, an M.B.A. from the State University of New York at Binghamton, and a B.A. in Psychology from Spelman College.

Today is Equal Pay Day—but don’t celebrate! April 12 marks the point in 2011 women must work to equal what men earned in 2010. Here are some quick facts about this frustrating milestone:

- Women in America earn 77 cents for every dollar earned by a man.

- The wage gap has closed at a rate of less than half a cent per year since 1963, when women were paid 58.9 cents for every male dollar.

- Today, Latina women earn 60 cents, while African-American women earn 70 cents, for every dollar earned by a white man.

- Two-thirds of workers in the ten lowest paid occupations are women, while two-thirds of the workers in the ten highest paid occupations are men.

- Women’s earnings are higher than men’s in only four occupations: counselors, combined food preparation and serving workers (including fast food), bill and account collectors, and stock clerks and order fillers.

- Women MBA grads earn on average $4,600 less in their initial jobs after business school, regardless of level, prior experience, industry, and region.

- A female college graduate in the United States will earn $1.2 million less than her male peers over the course of her lifetime.

- If women earned the same as men, the U.S. GDP would be 9 percent higher, the Euro-zone’s would be 13 percent higher, and Japan’s would increase by 16 percent.

Equal pay for equal work is a right, not a privilege. So let’s do what we can to close the gap. Check out some solutions here and here, and while you’re at it, here are some clever ecards you can use to spread the word!

Let’s make Equal Pay Day history—right now.

The recent blockage of the Paycheck Fairness Act in the U.S. Senate was deeply disappointing, but the fight for equal pay will continue. And it will pay off.

What’s the source of my unabashed optimism? A movie.

Made in Dagenham opened in New York City two days after the Paycheck Fairness bill failed on Capitol Hill. The film depicts the pivotal 1968 strike of women machinists at a Ford production plant in Dagenham, a London suburb. The women walked out when their painstaking stitching work was re-classified by management as a low-paying “less-skilled” production job, and a new pay scale was introduced that awarded them 15% less than what the men in the same skill grade earned.

The film follows Rita O’Grady as she becomes the unlikely leader of the strike, which grew into a national movement that forced passage of the UK Equal Pay Act of 1970. In the end, the women received a deal that immediately put them within 8 percent of male pay for their skill grade, and at equal pay within two years.

Rita takes her lumps along the way. The walk-out leads to production shut-downs at the plant, and the once supportive men in Dagenham lash out at her. At one stage, Rita is confronted by her husband with a roundabout plea to stop the strike. He tells her that she already has a good life because, unlike the other men in town, he doesn’t drink or hit her. Rita grows incensed. Like fair pay, these two things are “rights, not privileges” she shouts—and she becomes even more emboldened on her mission.

Those words—“rights, not privileges”—resonated with me because it seems so clear that in 2010 it is not a privilege for women to be paid the same salaries as men who do the same work, but a right.

Success did not come overnight for Rita and her fellow machinists, but through a long protracted struggle. They were finally reclassified by Ford as “more-skilled” workers following another strike in 1984 (not depicted in the film). And since the UK Equal Pay Act was first passed, the pay gap in England has narrowed from 31 percent in 1970 to roughly 17 percent today—not perfect, but better.

The Dagenham women sparked a global movement fueled by a just cause. Setbacks may occur in the fight for paycheck fairness now, but let them not distract us from what is our right!

UPDATE: Disappointing news: the Paycheck Fairness Act stalled on Capitol Hill. Below is our official statement:

Catalyst’s Statement on Blockage of Paycheck Fairness Act in US Senate

A crucial bill targeting the gender pay gap in the United States was blocked today as too few senators voted to move forward with the legislation. Among other remedies, the Paycheck Fairness Act would have required employers to provide an explanation for wage differences between women and men doing the same type of work. Today, women working full-time and year round are paid 77 cents for every dollar earned by a man. This harms women, their families and American business. The Act’s blockage represents a defeat for this nation’s working women, and our economy.

The gender pay gap will persist in the United States until 2058 if we fail to act. Equality—and equity—can’t wait.

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(Original Post)

What will the world look like in the next 50 years? It will be filled with helper-robots, flying cars, quantum computers—oh, and one more thing—gender pay gaps!

Technologies keep marching forward, but companies do not. Today, women earn 77 cents for every dollar earned by a man. And the rate of change is glacially slow: less than half a cent a year. At this pace, it will take until 2058 for full-time wages between women and men to be equal.

Who’s got 48 years to wait for equality?

A 23-cent-a-dollar difference today adds up over the span of a career. Over 40 years, a woman in the United States will lose an average of $431,000 in pay. This is money that could be spent on doctor’s visits, tuition fees, cars, and just about anything that keeps us healthy and happy and our economy ticking.

The stakes are high—that’s why Congress must pass the Paycheck Fairness Act when it comes up for a vote in Congress later this month.

Critics claim that the Equal Pay Act of 1963 gives women enough protection from wage discrimination. When this law was passed, full-time working women made 59 cents for every dollar earned by a man. Forty-seven years later, the gap closed by only 18 cents! Does this law seem effective to you?

The Equal Pay Act has loopholes big enough to drive trucks through, and the Paycheck Fairness Act plugs them. The new act would require employers to provide an explanation for wage differences between women and men doing the same type of work, ensure that women can obtain the same legal remedies as those subject to racial or ethnic discrimination, bolster the federal collection of wage data, and prohibit retaliation against workers who ask bosses about their wages.

Pay gaps should be a thing of the past, not an everyday reality for ourselves, our children and grandchildren. Too much is at stake. The Paycheck Fairness Act was already approved by the House, and the Senate is poised to act on it as soon as November 17, 2010.

Here is Catalyst’s statement on the bill—please support all efforts to get it passed!

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Cross-posted in The Huffington Post

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.

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.

Read the research—the numbers tell the whole story.

A lot of ink has been spilled over a recent New York Times article which argued that childless women had careers that tracked men’s. “Women do almost as well as men today, as long as they don’t have children,” a Columbia University professor told the Times.

The article hinged on a recent study of M.B.A. grads from the University of Chicago that probed “women’s underperformance in the corporate and financial sectors.” But what did this report really show?

The authors found a vast wage gap exists between women and men. According to the report, women earn $115,000 on average at graduation and $250,000 nine years out, while men earn $130,000 and $400,000, respectively. “Mean earnings by sex are comparable directly following M.B.A. receipt,” they wrote, “but they soon diverge.”

How’s that for an understatement? Their “comparable” earnings are a $15,000 difference. I’m not sure about you, but I’d be pretty ticked at making $15k less just because I’m a woman.

Was this dramatic finding headline news? Nope.

Instead, media coverage fixated on a detail buried deep into the report. On page 243, the authors’ state:

“Limiting the sample further to women without children, and with no career interruptions by 10 years out, makes the career paths of the women in the sample similar to those of men. For that comparison, the gender earning gap starts out slightly larger than for all women, but grows less rapidly.”

This suggests that for women without children, there’s still a gap at the start of their career after business school, and the gap still grows over time—albeit less quickly than it does for women with kids or who have taken time off.

Not really breaking news, is it? Catalyst actually reached a similar conclusion in Pipeline’s Broken Promise, which found that even among women and men without children, women still started behind men and the gap still grew over time.

The original New York Times article is accurate in saying there’s a bigger penalty for women who have kids and/or take time off (which isn’t surprising), but was misleading in suggesting to the reader that women without kids will face a level playing field with equal pay. The numbers are clear: Women are paid less than their male colleagues. They don’t call it a gender wage gap for nothing.

Equal Pay Day has come and gone, but not the pay gap.  Nor the work to get it closed.

Last week, a New York City Council hearing was held on closing the gender wage gap. It was organized by the New York Women’s Agenda (NYWA) and the Equal Pay Coalition of New York City. Both groups are fighting hard to end pay discrimination against New York women and minorities. They advocate for wide-ranging pay equity policies modeled on those put into place in 2009 by New Mexico Governor Bill Richardson—efforts I support.

The hearing featured an array of leading researchers, legal experts, and community leaders. Among those on hand was Beverly Neufeld, Vice President of NYWA and Director of Equal Pay Coalition NYC. She made a salient point about the deep impact women have on our economy through investment and spending.

“The hand that rocks the cradle rocks the economy as well,” she said.

Her comments mirrored something I read recently while browsing through books from our office collection. “Men and women in all walks of life must reassess their attitudes towards women as workers, and recognize the economic waste caused and injustices suffered to this point in time,” wrote J.E. Buckley in the book, Equal Pay for Women: Progress and Problems in Seven Countries.

Those words date back to 1975 when the U.S. wage gap was 59%. Today it’s 77%. More than 30 years later, we still have a long way to go—and a lot more to tell others—about how much the pay inequity hurts women, families and our economy. Too much is at stake—it’s time to get to work!

In this edition, myths about working mothers are busted, the importance of engaging women on climate change is explored, and Australia’s “blokey,” or chauvinistic, culture is analyzed. Author Susan Douglas takes on “a new, subtle form of sexism,” and we look at disturbing information about the wealth gap for black and Hispanic women in America.

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 Gap, What Gap?

Startling new data on the wealth gap for single black and hispanic women only garnered one national television news mention, one NPR news story, two opinion pieces and one newspaper report. What did everyone miss? The fact that “single black women have a median wealth of $100 and Hispanic women $120—dramatically lower than white men ($43,800), white women ($41,500) or black men ($7,900),” according to the report.

READ: “Wealth Gap Yawns—and So Do Media,” by Julie Hollar, Extra!, June 2010

 Women in a Warming World

“Women need to be protected, engaged, and empowered for climate solutions to truly succeed,” writes  Kari Manlove of the Center for American Progress. Involving women at high-level climate negotiations is one place to start.

READ: “Women’s Role in a Warming World,” by Kari Manlove, Center for American Progress, 5/26/10

 Inequity Down Under

Last year, the Australia Securities Exchange (ASX) announced a proposal to expand corporate governance principles to include a mandatory gender diversity policy. In a country where a “blokey” culture rules, what effect will this have upon Australian corporate culture?

READ: “Not So Wizard in Oz,” by Cleo, The Gender Blog, 5/26/10

 Myth Busting

The Washington Post tackles  myths about working mothers. Did you know, for example, that working women (and men, for that matter) today spend more time with their children than ever before? Or that the more education a woman receives the less likely she is to “op-out” of her career? Consider these myths busted.

READ: “Five myths about working mothers,” by Naomi Cahn and June Carbone, The Washington Post, 5/30/10

 An Insidious Bias

What is “enlightened sexism?” According to author Susan Douglas, this new, subtle form of sexism “insists that full equality for women has been achieved … so it’s OK to resurrect retrograde, sexist images of women in the media, all with a wink and a laugh.” I agree with Douglas— how else to explain the sexist imagery and language that still pervades our media?

READ: “The New Sexism,” by Laura Fitzpatrick, Time, 3/16/10

Happy Equal Pay Day—today you’ve just earned as much as a man!

April 20^th marks how far into 2010 women must work from January 1^st 2009 to match what men earned last year. Women in the United States make about 77 cents to every dollar made by a man. The gap is worse in other other countries. Women work just as hard, but are paid less. Does this seem fair to you?

The Equal Pay Act of 1963 made it illegal for employers in the U.S. to pay women and men different wages for doing the same type of work. But the pay gap still cuts deep.

Professionals are hit the hardest. The latest data show that female physicians in the United States earn, on average, 39% less than male physicians. Women financial analysts take in 35% less, and female chief executives one-quarter less.

Men earn more in “traditional” female jobs, too. Female beauticians earn 30% less than male colleagues, women cashiers 19% less, and female waiters 21% less. Any way you slice it, men make more money.

Twenty-three cents might not sound like a lot until you do the math. The small nicks to a woman’s paycheck add up to astonishing amounts. A woman who graduates high school will earn roughly $700,000 less than her male classmates over the course of her life. A female college graduate will earn $1.2 million less.

And how’s this for a graduation present? Women who earn an MBA, an M.D. or a law degree fare even worse. They will make $2 million less during their lifetime than the men in their graduating class.

Inequities start from day one. Catalyst found that female MBAs earn, on average, $4,600 less in their first job out of business school. Women start behind and never catch up.

On March 11, 2010, the U.S. Senate Committee on Health, Education, Labor and Pension held a hearing on the pay gap. Among the proposals offered was a legislation that would require employers to publicly disclose job categories and pay scale. This is vital to destroying the pay gap and would provide needed transparency so that companies can fix the current inequities. 

Just ask Lilly Ledbetter. She earned $3,727 per month at an Alabama Goodyear plant. When an anonymous note informed her that the lowest paid man doing the same job earned $4,286—and the highest paid man earned $5,236—she sued. In his first legislative act as president, Barack Obama signed a law that closed the legal loophole that cost Ledbetter the case. And he named the bill after her.

For Lilly, the pay gap is not simply a woman’s issue— it’s a family issue. “If your wife doesn’t get paid fairly, it affects you. If you’ve got children, it affects them,” she said in an interview last year.

Here’s how I see it.  Being paid 23% less means there’s 23% less going into the system—into women’s retirement plans and Social Security accounts. We keep losing ground even after we stop working. And when women pay taxes on 23% less salary, the whole economy loses out.

Let’s not forget that one definition of “fair pay” is pay that you still think is fair after you find out what everyone else is making! The whole idea that it’s not feminine, ladylike, or polite to care about money is so 20th century. And it was a miserable idea then, too.

So find out what you should earn. Get the data on your industry’s norms. Ask people in your field. If you are earning less, demand more, or consider working somewhere else. Don’t value companies that do not value you.