3 Reasons Women Make Less Money Than Men

In the State of the Union speech last week, President Obama spoke passionately about wanting to end the wage discrimination between males and females.  He used the number $.77 in the context of women make $.77 for every dollar a man makes.  Is that actually true?  Probably not, when you look at all the data:

“[Women] still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment. A woman deserves equal pay for equal work.”

Hard to argue with that, but the 77-cents statistic does not convey the point.

All it tells us is how the median annual earnings of full-time, year-round female workers compare with that of full-time, year-round male workers.

It doesn’t speak to any of the factors that determine one’s pay, such as the type of job chosen, education, experience, tenure, or hours worked. Nor does it reflect the host of less tangible factors that play a role, such as job performance.

Controlling for those factors would shrink the pay gap considerably in many jobs and in some cases all but erase it.

Does that mean there’s no gender discrimination in pay? No. But teasing out just how much exists is very hard. Assessments will differ depending on what methodologies are used and what specifically is being compared. The Institute for Women’s Policy Research, for instance, estimates that somewhere between a quarter to a third of the 77-cents pay gap may be attributable to discrimination.

But it doesn’t really matter, in my mind, if we are talking about $.23 or $.03 – any difference is too much.  Our reality is there shouldn’t be any difference in pay given all things being equal.  So, why is it that really, today in 2014, have pay discrepancy between men and women?  I’ll give you 3 reasons why we have it, and why it’s going to continue:

1.  HR still does not have enough influence in most organizations to stop illegal and immoral decisions by leadership.  72.7% of HR Professionals are female (based on 2012 BLS figures).  So, in the vast majority of our organizations women are actually in a position to influence this issue.  You would think with such a large number of females in HR this would take care of itself.  But here we are.  I’m not saying women don’t have influence, I’m saying HR doesn’t have influence. Having over 70% of HR positions filled by women, should make, and keep, this a top of mind issue to put an end to.

2.   HR does not train, and consequently discipline, male leaders who over inflated performance of male employees over female employees who are similar or above in performance of their male counterparts. We see this happen all the time, and we (HR) turn a blind-eye to the practices, instead of putting a stop to them.  I think one could easily argue that an over-reaching competency amongst HR professionals in their inability to directly handle conflict, which definitely perpetuates this issue.

3.  Culturally, in America, we want women to make less.  That one hurts, right?  Before you react, think about it.  Who is expected to take off work when a baby is born?  Who is expected to stay home with a sick child? Or on a snow day from school? etc.  All of things attribute to Obama’s $.77 figure.  If 20% take off 12 weeks after childbirth, that has a huge impact to female average wage as compared to male wage!  Also, what about that thing we don’t talk about?  Men who can’t handle being with or married to a woman who makes more than them? You can scoff, but it is a very real thing!  In my career I’ve had to sit with female employees and have them tell me to my face they don’t want a raise, or to take on a new position, because it would cause them to make more than their husbands, and that was a bad thing.

#1 all by itself should make us furious with anger.  HR could put a stop to most of this wage discrimination, almost immediately, but we don’t.  It wouldn’t solve the entire amount, but it would make a huge dent in the difference!  I have been apart of trying to tackle this issue with major corporations.  I’ve stood in front of a CEO and showed this person the disparity and the solution.  The cost would be substantial, in the millions, and was told to ‘bury it’ and take care of the most critical outliers. Organizational leadership knows this is happening, they just don’t want to hurt their potential bonuses to stop it.


7 thoughts on “3 Reasons Women Make Less Money Than Men

  1. Tim, the main premise of the president’s equal pay issue should be re-examined. If you look at the commonly cited studies, they are only comparing averages (e.g., women with a 4-year degree in the Washington D.C. area make less than men with a 4-year degree). These studies omit large variations from employment patterns of female workers (e.g., work in lower-paying industries such as education, graduation from lower paying degrees such as business with marketing emphasis vs. men graduating in finance, or mothers leaving the work force for a year to have a kid—time spent in work force is a better indicator than time after graduation).

    Most companies don’t run rampant with illegal sex discrimination. We don’t live in the stone age that the president is portraying. A typical 10-year female accountant at an accounting firm makes the same as a typical 10-male accountant (your 5-year HR cat lady often makes more than the 5-year male HR nerd). Plus most female executives make more than their male counter-parts; it’s just there are still fewer female executives.

  2. “I’m not saying women don’t have influence, I’m saying HR doesn’t have influence.”

    When I read that, I was immediately struck with the thought that maybe HR doesn’t have influence because HR is mostly women.

  3. CEOs along with HR is more appropriate than just saying “HR should put a stop to this.” Accountability at the very top is much needed.

    • Hang –

      I don’t disagree with you, but I can only control what I can control. I’m in HR, I’m not a CEO (well, actually I am, but for most of my audience they are not). We all can do more.


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