Same Work, Less Pay
Why the gender wage gap is so persistent—and how to finally close it
According to the Institute for Women’s Policy Research, a female chief executive earns 77.6 percent of what a male chief executive pulls in. Operations manager: 76.4 percent. Administrative assistant: 85.2 percent. Financial manager: 69.3 percent. Across the United States, multiple sources report that women in a variety of industries make on average 80 percent of what their male counterparts are paid.
None of this is news. And plenty of politicians and employers have promised to do away with the wage gap. So, why is it still hanging around?
While women do tend to enter lower-paying industries than men, more often work part time, and take more leaves of absence (to raise children or care for aging parents, for example), these variances only account for a portion of the wage gap, says Katharine Lusk, executive director of the BU Initiative on Cities and member of a city of Boston task force dedicated to closing the gap. A 2012 report from the American Association of University Women surveyed degree holders a year out from graduation, controlling for the factors known to impact earnings, including college major, geography, and hours worked—and found a persistent wage gap in almost every occupation “for no other attributable reason except for gender,” says Lusk.
At Questrom, researchers have been studying the wage gap’s obstinacy, examining gender in labor markets, the impact of employers’ demands for long hours, and gender differences in specific fields. We asked them, along with alums at organizations dedicated to advocating for women, to tackle three pay disparity case studies: the young professional, the business owner, and the midlevel professional. Together, our experts help explain why women who lean in are still losing out—and what we can do about it.
Case Study #1
The Young Professional
With an MBA and six internships under her belt, 24-year-old Marcy is offered a job as a marketing specialist at a software development company. She accepts without hesitation. Throughout the next two years, she takes the lead on several projects and opens up the company to a new millennial consumer base. She’s also active in networking groups, through which she’s surprised to learn that she’s paid less than her male counterparts. With her skills and experience, she could command a 20 percent higher salary. Marcy wants to ask her boss for a promotion, but she’s afraid she’ll appear too demanding. What if her boss says no?
A 2016 survey of more than 2,000 American employees by the company review website Glassdoor found that when offered a job, only 32 percent of women will negotiate for a higher salary, compared with 48 percent of men. “Over time, the gap just widens and widens, so no matter what the woman does, it’s very difficult, and almost impossible, for her to ever catch up to that man because she started from a point of inequity,” says Felicia Jadczak (MS·MBA’11), cofounder of the networking and education company She Geeks Out. And, she says, companies don’t do enough to help their female employees catch up to their male colleagues.
While many businesses offer mentoring opportunities for entry-level professionals, women in their 20s and 30s are often neglected, says Jadczak, who founded She Geeks Out to serve this demographic. “They’ve worked for a few years and maybe they’re still in the same job they were when they started off, or they’re not entirely sure how to ask for a promotion or a raise, or they want to try something else. If they don’t self-educate how to negotiate, network, and promote themselves, they might end up getting left behind.”
The Glassdoor survey found that men are three times more likely than women to successfully negotiate a higher salary.
She Geeks Out offers women in STEM fields professional development opportunities like networking events, and helps companies foster inclusivity through training sessions like recruiting for a more diverse workforce. In its negotiation workshops, She Geeks Out encourages women to conduct preliminary research and benchmarking to determine a position’s salary range and average pay. Jadczak suggests sharing this research with the hiring manager during an interview and asking questions about other forms of compensation, like equity and stock. It’s equally important to ask about the promotion structure, how and when evaluations are conducted, and whether there’s an opportunity to request a salary review after six months instead of a full year.
Negotiation doesn’t end with the hire, says Lusk. It’s also critical for women to record their accomplishments throughout the year, so they’re prepared to advocate for themselves and ensure they’re paid the same as their male colleagues. When Marcy asks her boss for a promotion, for example, she should note her achievements and the value she brings to the company. Jadczak suggests outlining her request in advance and preparing a backup plan if her boss is unwilling to compromise on her title or salary. She should frame her request as a package that includes not just a salary range (shooting a little higher than her ideal minimum), but also factors in continuing professional education, flex and remote work time, vacation days, stock options, medical coverage—even pet insurance.
“Know your value and be prepared to state a few reasons why you are asking for what you’re asking for, and why you are worth it,” Jadczak says. “Go in knowing what you want, what you’re willing to budge on, and what you aren’t willing to make concessions on.” And practice. Jadczak suggests saying the request “out loud 10 times before you go into the meeting. The words will come to you much more easily and you won’t feel put on the spot. Don’t be embarrassed to bring in a written list of things you want to go over.”
That’s a good start—but there are two sides to negotiation. “It’s not just about teaching women to negotiate better or teaching them to put their hand up more or lean in more,” Jadczak says. Organizations have to lean in, too. To ensure work environments are supportive of women, from hiring through retention, She Geeks Out works with companies to develop inclusive job postings and company branding. Her advice: avoid gendered pronouns, reword requirements so “X years of experience” becomes “experience doing X,” and ensure web and social media content reflects diversity. Jadczak also recommends considering more female candidates for open positions, and points to a study in Harvard Business Review that found women have a better chance (79.14 times greater) of landing a job when the finalist pool includes two women, rather than one.
When it comes to extending a job offer to that female candidate, companies must change the narrative around negotiation “so that if a woman is negotiating, she’s not seen as being difficult or hard to work with,” Jadczak says. One way they do this: stop asking candidates for their salary history. “You just perpetuate the wage gap if you don’t give women an opportunity over the course of their careers to properly negotiate from a level playing field,” Lusk says. In addition, companies should publish salary bands with job descriptions so all potential candidates enter the process with the same range, and post all employee salaries online to encourage salary transparency among coworkers. Jadczak highlights the social media management platform Buffer as a prime example of a transparent company; its website features the company’s formula for calculating salaries, as well as a complete list of earnings, from CEO ($218,000) to Twitter Hero ($70,193).
Organizations should also conduct in-depth reviews and adjust salaries to account for the fact that not everyone entered on an equal footing. In 2015, software company Salesforce spent $3 million to close the gender pay gap among its 17,000 employees and, in 2017, leveled salaries again after acquiring several firms. “Every CEO needs to look at if they’re paying men and women the same,” Salesforce CEO Marc Benioff said at the 2017 World Economic Forum. “That is something that every single CEO can do today.”
Case Study #2
The Business Owner
Justine, who holds an MBA and MFA, plans to start a small creative business. She has a thorough knowledge of her market, workshopped her business plan with her graduate school peers and faculty mentors, and assembled an advisory board of industry experts. She arranges meetings with five venture capitalists, but her first interview is a flop. The venture capitalist focuses on the business risks; though Justine is prepared for all of the questions, she is unable to shift the conversation to her growth plan. The venture capitalist rejects her pitch.
Although women own 30 percent of businesses in the United States, they secure only a fraction of venture capital funding (just 2.19 percent in 2016), according to financial tech company PitchBook. The reasons for this are myriad and tap into deeply rooted gender biases, says Concetta Rand (MBA’08), chief revenue officer at iFundWomen, a fundraising platform that provides crowdfunding, coaching, and connections for women looking to launch and grow their businesses. In interviews with female entrepreneurs, venture capitalists tend to focus on risk; in interviews with male entrepreneurs, they focus on opportunity and promotion.
“The reality is the majority of venture capitalists are men,” as are the majority of entrepreneurs, Rand says. “Female entrepreneurs are not the default in people’s minds.” Because people are by nature risk averse, it can be difficult to take a chance on an opportunity beyond our immediate experience, Rand says. So, when a venture capitalist interviews “someone who looks like them, or who they can relate to, who is part of their community, it’s going to be easier” to back their business.
Women have to tackle this bias before they even enter the room, by addressing what researchers have termed the “confidence gap,” Rand says. According to a 2015 University of California study, men report higher self-esteem than women across 48 countries; in entrepreneurship, this gap can keep women from accessing capital. “A lot of women entrepreneurs we hear from don’t like to ask for help and feel like they need to do it all themselves,” Rand says. “We’re conditioned from a very early age to think that asking for help is a sign of weakness, or that we aren’t qualified.
“We need to change that mindset. You’re not going around with your hand out asking for charity, you’re building a business. If you’re not willing to share your idea and get feedback on it, you are limiting your access to the potential to succeed.”
That means putting your in-progress ideas out there, which Rand says is particularly challenging for women, who tend “to keep ideas close to the vest until you feel like they are absolutely flawless—and that is never how entrepreneurship evolves. You need to be able to be nimble and flexible and open to feedback. Be willing to let go and put yourself out there, and not be afraid that if something fails, that you have failed. Perfect is the enemy of done.”
Rand also says crowdfunding can help women enter into interviews with venture capitalists and other potential financiers with confidence and prepared to shift the conversation to promotion. “A successful crowdfund ahead of time is a valuable way to validate the market and the opportunity,” she says. The more capital women can raise on their own before approaching financiers, the more successful they will be at establishing their product and demonstrating its market potential. And don’t forget to “prepare for the yes,” Rand says. When an investor gives you $50,000, ask them to tell five friends about your work. One iFundWomen success story, the Minneapolis coworking space The Coven, has raised more than $166,000 through initiatives like crowdfunding and preselling memberships. When the founders surpassed their initial goal of $100,000, they upped their ask to $200,000 to fund one need-based scholarship for every five members.
Women need to see other women succeed, Rand says. “If you can’t see it, it’s much harder to become it.” Shulamit Kahn, an associate professor of markets, public policy, and law, adds, “Women do better—and like their jobs better—when they have women working near them. The higher the proportion of women along the ladder—especially higher, rather than segregated in lower positions—that’s when the environment for women will really improve.”
Case Study #3
The Midlevel Professional
Sara, a financial manager, drops her kids off at daycare as soon as it opens, but still struggles to get to work in time for her company’s frequent 8 am meetings. Today, she works through lunch—again—and as she rushes out the door at 4:30 pm to pick up the kids, she passes the conference room, where her male colleagues are discussing a report she hoped to direct. While her husband puts the kids to bed, she checks her email to find that her colleagues have already divvied up the work. She’s missed out on directing the report—and now she’s missing out on time with her family.
Sara is not alone in feeling constantly behind, at work and at home. Occupations that demand a high skill set, like financial planning and law, for example, often reward long hours, which puts women at a disadvantage because they still bear the brunt of the “second shift” at home, even if they work full time. The 2016 American Time Use Survey published by the US Department of Labor found that on an average day, 85 percent of women take on household duties, compared to 69 percent of men.
In part because of this inequitable division of household labor, full-time, college-educated women work approximately three fewer hours per week than their male counterparts, says Patricia Cortés, an assistant professor of markets, public policy, and law and expert on gender in labor markets. Cortés has found that when highly skilled women hire out household responsibilities like childcare and housecleaning, for example, they’re able to devote an average of 17 hours more a week to their careers. But even that is problematic. Cortés’ research, published in the Journal of Labor Economics, among others, focuses on how an influx of immigrant workers into occupations like household services lowers the prices for those services, which makes college-educated women more likely to outsource jobs like cleaning and childcare in order to work more hours outside the home.
Another way to address the wage gap—particularly for highly skilled women—is for organizations to review their policies and change unnecessary expectations that hurt women, says Kahn. For example, Sara’s firm could shift the 8 am meetings to a later time that would be more convenient for women (and men) who are responsible for taking their children to school. And Cortés advocates for organizations like Sara’s to change the culture of working long hours, so women can reach the top without maxing out the clock.
“Changing seemingly small things like meeting times can make a huge difference in whether women can participate as equals,” says Kahn. In her academic field, economics, an ostensibly minor adjustment such as listing journal authors in order of contribution instead of alphabetically would give female researchers more credit for their work, she says, and a better chance at earning tenure.
Kahn, whose work has been published in journals such as Science and Scientific American Mind, recently completed a study of the pay gap in science and engineering and discovered that the biggest contributor to the disparity was the underrepresentation of women in the highest-paying jobs. One reason: these fields penalize women for career breaks, with engineering the most egregious offender. “Women have a biological clock, so they are particularly hurt in the sense that many of them feel like they have to choose between having children and having a career,” she says. This choice often pushes them into less competitive—and lower-paying—jobs or out of the workforce altogether.
Kahn concentrated her research on PhD scientists. One of her key suggestions is to end the emphasis on postdoctoral research, grant-funded positions that prevent PhD scientists from starting their careers in earnest until their mid-thirties, which pressures them to choose between work and family. Instead, students unlikely to pursue a tenure track position should be encouraged to forego postdocs, while universities should consider assistant professorships through which PhD scientists could learn on the job.
Cortés cautions against making changes all about women, which perpetuates harmful gender stereotypes. Flexible time and reasonable hours are also important to men, who are increasingly likely to share household responsibilities, and should be instituted across the company.
Negotiating, crowdfunding, and mentoring other women are all ways to advocate for equal pay—but closing the gender gap also requires changing gender norms.
“If children grow up seeing just their mother taking care of them and their dad always working, then that becomes ingrained in their brains,” says Cortés. “But with paternity leave policies that give fathers a couple of months with the children, we might start changing gender norms from very early in people’s lives” and attacking the discrimination and gender bias at the root of the wage gap.
We’ve made strides, Cortés acknowledges. “It was not long ago that people would frown upon women who left their kids in childcare to go back to their full-time jobs, and a stay-at-home dad was completely unheard of. Our society has shifted somewhat—but still there’s a long way to go, and gender norms are very difficult to change.”
That’s why women need support from their colleagues and companies, along with a widespread culture shift. There are two sides to the gap, after all, and women can only lean so far across it.