Wed, Apr

The Real Reason Women Still Make Less than Men


EDITOR’S PICK--President Barack Obama is proposing a cool solution to help close the gender pay gap, but it doesn't hit at perhaps the biggest problem keeping women from earning what men make. 

That problem? Life. 

Women’s responsibilities outside of work -- mainly looking after children, but also caring for sick and elderly family members -- often keep them from taking on the kinds of jobs that would finally close the distance in pay between the genders. 

That doesn’t mean that the gender pay gap is the result of some kind of real “choice” women make, according to Claudia Goldin, one of the leading economists studying the gender pay gap. 

“Women aren’t choosing to make less,” she told The Huffington Post. Instead, they’re buying the flexibility to handle responsibilities outside of work, said Goldin, who is a professor at Harvard.

U.S. public policy is many years away from grappling with this.

Obama just announced a strong new policy that's intended to address the pay gap. Under his proposal, companies with more than 100 employees will be required to report data on pay, broken down by gender, race and ethnicity. 

It reinforces efforts already underway at some progressive companies whose leaders have pledged to eliminate pay gaps with salary analysis. Probably the most high-profile of these is software maker Salesforce, which has already spent $3 million to ensure women and men are paid equitably at the Silicon Valley firm. 

Certainly pay gaps within companies exist and are a problem. Black and hispanic women face even worse wage gaps than white counterparts. Firms should do everything they can to eliminate unfairness. And, of course, gender bias and discrimination play a role in the wage gap. It's fair to say Jennifer Lawrence got a raw deal compared to her male peers. There's all kinds of nutty bias against women that goes down at work. 

Women get interrupted at meetings. They aren't often taken as seriously as their male counterparts. They are deemed too aggressive or too meek and unfairly penalized in performance reviews.

There's a long, infuriating list. 

It's obviously important that we have strong laws prohibiting clear gender discrimination. This week, progressive groups are advancing bills in several states meant to encourage equal pay for equal work, as Lydia DePillis writes in the The Washington Post.  Much of the legislation focuses on pay discrimination within companies. 

But it’s not the gaps within companies that are mainly keeping the sexes apart on pay. It’s the gaps within professions -- particularly high-paying ones like law and business. So the highest-paid lawyers, for example, are mostly the men who've stuck it out at the most grueling and prestigious law firms that pay the most amount of money. The women have fallen off that elite track. 

And this makes up a huge portion of the gender wage gap, Goldin's research has shown. 

It's why the gap is most pronounced at the tippy-top of the income scale. 

Women at the top make 84 percent of what men at the level earn after controlling for education, ethnicity and a few other factors, a new working paper from two well-regarded labor economists reveals. 

“The pay gap has been reduced much less at the top than at other points at the middle and bottom,” Francine Blau, a Cornell economist who co-authored the paper with her colleague Lawrence Kahn, told The Huffington Post

There’s nothing more killing for parents or women in particular than having a child that gets out of school at 2:30. 

Goldin’s research has drilled down into this. Data she's analyzed shows that lawyers and women with graduate business degrees start out relatively equal to men when it comes to pay, but the gap widens as women get older -- when life and babies intrude on career goals. 

The same pattern persists for women with graduate-level business degrees. As Goldin writes in a 2006 paper, the penalty for M.B.A.s is higher than in any other profession she’s looked at. A high percentage leave the highest paying jobs after just a few years. 

Some would look at this information and conclude that it’s a fair tradeoff, less work and more family; no big deal. 

Some jobs require everything, to be sure. 

But many, many jobs do not. In consulting, workers are rewarded for putting in 100-hour weeks with promotions and partnerships. 

The cultural requirements are so onerous, that one study found that male consultants simply pretended to work long hours. They were still rewarded with advancement. 

One lesson from that analysis: The men didn’t need to put in the work. 

At the highest-end of our economy, face-time or the illusion of hard work is rewarded with higher pay. It’s not that you work more hours and get paid more simply because you put in more time. Hourly pay is not constant: Indeed, one recent study showed that overwork is rewarded with higher pay.  

The internet has enabled this by making it super-easy to always be connected to your office. 

So companies can help drive cultural change in letting people work reasonable hours and supporting flex time. 

Goldin has a simple solution for policy makers that one doubts would ever actually happen: Lengthen the school day. 

“There’s nothing more killing for parents or women in particular than having a child that gets out of school at 2:30,” she said. 

And there’s no good reason the school day is so short, according to Goldin. “We inherited this stuff,” she said, noting that the current school schedule was put in place when the U.S. was primarily agrarian. Kids were off during the summer to work on the farm. “We used to harvest things.” 

(Emily Peck is Executive Business & Technology Editor of The Huffington Post where this piece was originally posted.)  Prepped for CityWatch by Linda Abrams.

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