Friday, March 23, 2007

How to Get a Company's Attention on Women's Pay

In a March 17, op-ed piece in the Los Angeles Times, Judith H. Dobrzynski wrote about a study from Catalyst that shows that the number of women among top positions in Fortune 500 companies has shrunk since the last census was taken. So too has the number of companies that do not have one woman on their corporate board.

Dobrzynski report on this "dishonor roll" is worth reading at Return of the 'glass ceiling'.

Dobrzynski was editor of the Sunday Money & Business section of the Sunday New York Times when I wrote the following "The Right Thing" column that appeared there on March 17, 2002. The topic's related and things don't appear to have changed all that much in the past five years.

[The column below originally appeared on Sunday, March 17, 2002, in The New York Times Money & Business section, where "The Right Thing" column ran monthly from September 1998 through January 2004. In February 2004, "The Right Thing" started running as a weekly syndicated column in newspapers throughout the country and internationally. A collection of "The Right Thing" columns from September 1998 through July 2002 is available by clicking on The Right Thing Book from]

THE RIGHT THING; How to Get a Company's Attention on Women's Pay

Women who are managers make less money than their male counterparts. There's no shock there. But for decades, that salary gap has been shrinking -- until now.

In a recently released study of the 10 industries that employed the most women from 1995 to 2000, the General Accounting Office found that the gap between the salaries of men and women had widened for managers in seven of those sectors. The largest widening was in entertainment and recreational services, where female managers were earning just 62 cents for every dollar made by a male manager in 2000, down from 83 cents in 1995. Only three industries showed improvement for women -- albeit slight. The biggest gain was in educational services, where the figure rose to 91 cents on the dollar, from 86 cents.

The G.A.O. report is supported by other studies, including one conducted by the Women's Research and Education Institute in Washington showing that overall managerial salaries for women slipped to 71.3 cents in 2000 from 73 cents in 1995.

An obvious question arises from these findings: Is it is ever ethically justifiable for executives, men or women, who make compensation decisions to pay women less than they pay men for doing the exact same job? There's no gray area here. The answer is no.

Certainly, explanations can be found for the gap. "Just because there is the presence of a wage gap, one should be hesitant to infer that there's discrimination going on," said Elizabeth Owens, a government affairs manager for the Society for Human Resource Management in Alexandria, Va. "A problem with these pay-gap studies is that they don't take into account individual choices that people make about what jobs they want and what they don't." Some women, for example, may decide to work fewer hours to meet family needs.

Still, it's impossible to dismiss discrimination outright as a reason for the widening of the gap. Jared Bernstein, a senior economist at the Economic Policy Institute in Washington, says a study like this turns a spotlight on "basic fairness issues."

Variations in lifestyle choices might justify the existence of a wage gap. So, too, might the varying levels of experience and managerial responsibility that the G.A.O. study couldn't measure. What these factors don't explain, however, is why the gap has grown.

"The change is bad news for women," said Heidi Hartmann, director of the Institute for Women's Policy Research in Washington. "Women have been getting more education and staying in the labor market longer. Women are doing everything right, and still this is happening. Progress has stopped."

Others say the slippage may result more from losing sight of the issue. "I don't think it matters less to us," said Laura P. Hartman, a business ethics professor at DePaul University in Chicago. "But I think we've paid less attention to it and become complacent."

Consider this, then, the sounding of an ethical alarm to stem the widening gap. But how?

For anyone who notices wage disparity in his or her company, the initial impulse may be to raise a ruckus in the workplace demanding equal pay for equal managerial jobs. But such loud noise may be counterproductive.

"This is a volatile issue," said Joseph L. Badaracco Jr., a business ethics professor at Harvard Business School and author of "Leading Quietly" (Harvard Business School Press). "Most people don't like to be accused of being unfair, and they like it even less if you rub their face in it by documenting it. This is a minefield."

The first step, he said, is to "have some indication that there is a conspicuous disparity within your organization."

"Without that," he added, "you're not going to get anywhere waving a government study."

Next, he suggests going to a couple of people within the organization whom you trust, to see if you have the facts right and to learn who else might be sympathetic to finding a solution.

The wage gap is the kind of issue "where behind closed doors in a friendly rather than threatening way, and with analysis, somebody could make a case," Professor Badaracco said. "And the case is roughly, 'Look, there are disparities; the women in the organization know about them. Things could get stirred up. We could get sued. Can we work together to find some way to move forward?' "
Ultimately, you have to go to someone who has the power to make changes. Regardless, Professor Badaracco said, "you have to move with extreme caution."

True enough. There's no upside to raising an issue in a way that creates only divisiveness. But doing something, cautiously or not, is imperative. It's unconscionable that women make less as managers than they did five years ago. American business should be ashamed.

1 comment:

Anonymous said...

At this level, salaries are generally secret. They are individually negotiated and the executive must sign a statement that they will not disclose their compensation package to anyone inside or outside of the organization, so there is no easy way for a woman to have a good handle on how her salary compares with that of the men around her. Often, mid-management women are given jobs called "coordinator" or similar titles instead of manager if it involves managing the efforts of executives because doing so gives her the responsibility for the work output without giving her the access to salary information of the men she is managing. Women tend to go into government or nonprofit circles specifically because although on average these sectors pay less, for the women, it is the only way to be sure you are being paid equally. As far as job choices early on: You have to take into account the opportunity cost. If a woman who has a degree is thirty and pregnant with her first child, she is likely to look around and wonder, "I have worked long hours and with great enthusiasm since college for this company; Am I getting the pay and promotions that the men around me are getting? Am I getting the high-profile projects? Are the women who are older than me who never took off for children getting a better position, or am I topped out at thirty in this company?" All too often, she decides she may as well stay home with her baby for a few years; there is, in reality, nothing to lose. She has no evidence that she was ever going to be promoted significantly anyway.