Mind the gap

Apr 11 2007 by Brian Amble Print This Article

Almost half the managers in U.S. companies are women. Yet when it comes to the most senior posts, men outnumber the women by almost six to one, while at all levels, women consistently earn less than men.

So why, as America considers a electing a woman to the top job in the country, is gender discrimination still so pervasive a factor in the workplace?

According to a Vanderbilt economist, professor Joni Hersch, even when taking into consideration characteristics that might affect earnings, such as choices over household and child-related responsibilities, market characteristics, working conditions, occupational segregation (field dominated by one sex or another), experience or job turnover rates, sex discrimination is still a strong explanation for the gender pay gap.

"If the unexplained pay disparity sometimes favored women and sometimes favored men, there would be no reason for concern," said Hersch.

"But systematically and without exception, finding that women earn less than men raises some questions."

At senior levels, these questions are only amplified. As a recent survey from TheLadders.com, an online service for $100,000+ jobs has underlined, the glass ceiling remains a reality for female executives.

When asked whether men and women were paid the same for similar positions, a resounding seven out of 10 said, "no."

In some areas, the financial gaps between men and women are huge. Using data from the U.S. Census's Current Population Survey 1996-2002, another Vanderbilt economist, Malcolm Getz, found that pay disparities are greatest in the fields of accounting, insurance, finance and marketing.

In Getz's survey, male accountants made an average of $49,000 a year compared to around $33,000 for women. The average male financial manager earned almost $60,000 compared to less than $40,000 for female financial managers. Even among highly trained, highly educated physicians, men made an average of $94,000 while female doctors earned $69,000.

Yet as the Ladders research highlights, it isn't just in financial terms that women lose out. Two-thirds of the executives surveyed said that women do not have as many opportunities as men to become company CEOs. This is despite the fact that more than half (54 per cent) - believe that men and women are equally adept at managing employees.

So could the pay disparity have something to do with the length of time women stay in a job? Professor Hersch's research suggests not.

"Although women quit more often for family-related reasons, men quit more often to move to another job," she said.

What about family and housework? Hersch found there is some evidence the presence of children lowers women's earnings, but this varies depending on education and over the life cycle. Indeed contrary to popular belief, Hersch argues that family and housework responsibilities are not the major cause of the gender pay gap.

Yet even if family commitments are not the cause of the pay gap, more than half (55 per cent) of the executives surveyed by TheLadders.com were in no doubt that employees with young children are more likely to experience workplace discrimination.

To make matters worse, employers still seem reluctant to do anything to make life easier for parents. Indeed far from creating more family-friendly office environments, two-thirds of executives said that their workplace still offers no assistance at all in the form of day care, on-site nursing facilities or time-off children's school activities.

Taking into account all the evidence Ė plus the fact that women are just as likely as men to take on high risk jobs Ė Joni Hersch is convinced that bad old-fashioned discrimination is still the most likely reason for the continuing gulf between the sexes.

"Coupled with recent class action sex discrimination litigation involving the securities industry, grocery stores and now Wal-Mart, it's hard to continue to attribute the remaining disparity to intangibles like effort and motivation and to ignore the possibility of discrimination," she said.