Why Women Are Worth (Less)

Every time we change jobs and are asked for a salary history, we're at an increased disadvantage. This gender-based pay discrimination disparity is going to do nothing but get worse.
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Recently, I came across a post on Daily Worth, a financial blog for women, written by a young woman who had just been offered a promotion at her daily newspaper: social media editor. She was currently making $32,500, but after doing some research, realized that her new job was worth $40,000.

So she screwed up her courage -- her company was having a hiring and wage freeze, after all -- marched in to see her boss, and negotiated salary:

Although I could feel the pressure, I said it would be hard for me to take the promotion for less than $36,000... I left our meeting without accepting or rejecting the position. The next day my boss called me with an offer of $35,500 plus a monthly cell phone stipend of $75, bringing the total to $36,400 annually. I accepted.

Happy ending, right? Not by my math. What about that missing $3,600?

As we've written before, we've become used to that seventy-seven cents on the dollar business. Used to it, but still peeved. And really, it's worse than that. In a study of University of Chicago MBAs -- which allowed labor economists Claudia Goldin and Lawrence Katz to compare "apples to apples", controlling for everything from biz school courses to job experience to hours worked when it came to gender disparities -- they wrote in a Q-and-A on the SuperFreakonomics virtual book club that for new MBAs, there was a just a modest wage gap -- favoring men, of course -- out of the blocks. But here's where it starts to stink:

Fast forward 10 to 15 years, and the earnings gap between our male and female MBApples is about 40 percent for those who were observationally equivalent at graduation. But almost all of that huge difference can be fully explained by the greater number of career interruptions and lower weekly hours experienced by the women (mind you, they still work a large number of hours). One of the reasons for the large gap in earnings between male and female MBAs is that the cost of career interruptions is very great in the corporate and financial sectors. These costs are considerably lower in medicine, and somewhat lower in law and academia.

To be sure, for many women the time out is a choice, and one that works well for them and their families. Still, for those who jump back on the career ladder, they rarely make up for that lost time -- or salary. Still, though motherhood and lower-paying careers are convenient excuses, they're handily debunked by Ilene Lang, who's with the women's research group Catalyst. "From their very first job after getting their MBA degree, women made less money than men," Lang told NPR . "On average, $4,600 less."

Very first job? MBA? Well, that settles the time-off-for-kids/lesser-paid-career-track thing. And Catalyst's findings held even for women without children. For Lang, this says old stereotypes persist. "There are assumptions that women don't care about money, which is crazy!" Lang said in that same piece. "There are assumptions that women will always have men who will take care of them, that women will get married, have children, and drop out of the labor force. All those assumptions are just not true."

You mean we work for more than pocket money? But the numbers are worse than we think, according to the Center for American Progress: Working women in the United States lose, on average, $431,000 over a forty-year career. Women without a high school degree lose $300,000 on average, and women with a bachelor's or graduate degree lose $723,000 on average. In fact, the analysis shows that the more educated and professional a woman may be, the more she loses over a lifetime of work, simply because of her gender.

But getting back to that blogger from the Daily Worth, we can't help wondering if there is something else at play as well: we don't speak up. In fact, we grab that 77 cents on the dollar and say thank you very much -- or, as that blogger revealed, feel as if we are letting someone down by asking for more. Is it because we women are hard-wired to please? That we have a hard time shaking off the good-little-girl mantle? All of which comes back to bite us in the paycheck. Linda Babcock and Sara Laschever, authors of Women Don't Ask note:

  • By not negotiating a first salary, an individual stands to lose more than 500,000 by age 60 -- and men are more than four times as likely as women to negotiate a first salary.
  • Women often don't know the market value of their work: Women report salary expectations between 3 and 32 percent lower than those of men for the same jobs; men expect to earn 13 percent more than women during their first year of full-time work and 32 percent more at their career peaks.

And in most cases, men do. As we wrote on Equal Pay Day, a non-holiday that marks the date in April that women's salaries catch up with their male counterparts' (That's right, as compared to the dude in the next cube, from January 1 until April 14, you, sister, were working for free): Every time we change jobs and are asked for a salary history, we're at an increased disadvantage -- and coupled with this gender-based pay discrimination disparity, well -- that disparity is going to do nothing but get worse.


Just yesterday, I was talking with my big sister. She was asking about our book and I was grousing about the fact that, in today's publishing climate, authors have to do a lot of self promotion. "I hate it," I moaned. "And I'm no good at it."

She smiled, obviously older -- and wiser, too. "If you were a man," she said, "you wouldn't have a problem with it, now would you?"

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