What factors explain the gender pay gap?
- The report was conducted by the investment firm Arjuna Capital, which has been publishing the Gender Pay Scorecard for the past three years.
- Only three companies — Starbucks, Mastercard and Citigroup — received an "A", as defined by the report's methodology.
- It's likely that discrimination explains part of the gender pay gap, but it's a complex issue that often gets oversimplified.
How wide is the gender pay gap at some of the world's largest companies?
For this year's Equal Pay Day on March 31, the investment firm Arjuna Capital published a report on gender pay disparity that offers some answers. The firm's Gender Pay Scorecard includes quantitative data on 50 major U.S. companies, such as Apple, Nike and Amazon.
Companies are graded based on five categories: adjusted gender pay gap, median gender pay gap, racial pay gap, coverage, and commitment (Coverage here refers to the extent to which a company's disclosed pay data covers operations outside of the U.S.).
The most recent data from the U.S. Census Bureau shows that a woman working full time earns about 81.6 cents for every dollar a man earns, while her median annual earnings are about $9,766 less than his.
"The world's largest corporations have come under intense pressure to close their gender and racial pay gaps in response to investor pressure, the #MeToo movement, and increasing public policy and regulation," the report states. "This Equal Pay Day, we have compiled our third quantitative accounting of current pay disclosures, performance, and commitments among corporate leaders and laggards in four industries: finance, technology/communications, consumer, and healthcare."
Of the 50 companies, only three received an "A" score: Starbucks, Mastercard and Citigroup. Meanwhile, 25 companies received an "F", though it's worth noting that 11 of those 25 companies didn't disclose any data at all.
Arjuna says shareholders can help close the gender pay gap by pressuring companies to disclose gender pay data.
"Investors have effectively used shareholder dialogues and proposals to move this process forward," the report states. "The continued growth of the gender and racial pay gap shareholder campaign, combined with an annual scorecard identifying industry leaders and laggards, will help improve corporate disclosure and practices, advancing the goal of pay equity."
Arjuna and other parity advocates especially want companies to disclose a specific measure of the gender pay gap: the unadjusted median pay gap, which is the raw difference between the median earnings of men and women. In contrast, the adjusted pay gap controls for factors like age, educational attainment, geography, hours worked and seniority. The adjusted pay gap is almost always narrower than the unadjusted version, so companies tend to prefer reporting this measure.
"Many of the companies in the GPS report both adjusted and unadjusted gaps, but only for U.K. operations," the report states. "In fact, the only companies to report both adjusted and unadjusted median global pay gap numbers are Citigroup, Starbucks and Mastercard."
For example, Citigroup reported that its adjusted pay gap was only 1 percent, but its global unadjusted median pay gap was much bigger at 27 percent. Starbucks had the lowest median pay gap, paying women 98.3 cents on the dollar versus men, while reporting an adjusted pay gap of zero.
Arjuna concluded its third annual Gender Pay Scorecard by emphasizing the importance of disclosing gender pay data:
"The first step is for companies to analyze their current pay structures and disclose any gaps. Transparently addressing gender and racial pay gaps is essential to achieve pay equity and create more diverse companies."
Does discrimination explain the gender pay gap?
It depends on whom you ask. Some say that the bulk of the disparity stems from gender discrimination. Skeptics of the gender pay gap say it's a total myth. Who's closer to the truth?
Obviously, it's complicated. There are many factors you could examine to find causes for the gap. For example, pregnant women have to take time off work, and mothers — for complex reasons, some of which are cultural — tend to spend more time caring for children. Both help to lower women's overall earnings. Another potential cause lies in the body of research showing that men are more likely than women to negotiate salaries.
But one of the most compelling explanations for the gender pay gap is the fact that men and women make different career choices. On the whole, research on earnings between the genders shows that men tend to choose jobs in higher-pay industries, work more hours, work more dangerous jobs, and prioritize earnings over work-life balance.
Researchers at Harvard University recently conducted a study on gender pay disparity that focused on train and bus operators. The researchers wrote:
"Women value time away from work and flexibility more than men, taking more unpaid time off using the Family Medical Leave Act (FMLA) and working fewer overtime hours than men. When overtime hours are scheduled three months in advance, men and women work a similar number of hours; but when those hours are offered at the last minute, men work nearly twice as many. When selecting work schedules, women try to avoid weekend, holiday, and split shifts more than men. To avoid unfavorable work times, women prioritize their schedules over route safety and select routes with a higher probability of accidents. Women are less likely than men to game the scheduling system by trading off work hours at regular wages for overtime hours at premium wages."
The findings align with a major 2009 study conducted by the U.S. Department of Labor, which examined more than 50 peer-reviewed papers on the nation's gender pay gap. It found that the gender pay gap disparity "may be almost entirely the result of individual choices being made by both male and female workers."
U.S. Department of Labor
But that doesn't prove that gender discrimination is nonexistent in the workplace. After all, even statistically adjusted data shows a gender pay gap. Additionally, biased cultural forces may partly explain why women make certain career choices; for example, some research suggests that women are encouraged not to pursue careers in science and engineering at a young age.
So, how much does discrimination factor into the gender pay gap? It's hard to say. Some research has found discrimination to be responsible for 39 percent of the gender pay gap, while others say discrimination accounts for just a few cents of the disparity. Gender discrimination is simply hard to quantify.
But what the research does conclusively show is that anyone who says the gender pay gap is completely a myth or completely a societal injustice is oversimplifying the issue.
More rules is not what's going to stop sexual harassment at work, says Johnny C. Taylor, Jr. Change the culture.
- "Too many organizations have tolerated the brilliant jerk. Too many organizations have tolerated the highly profitable sexual harasser or bully," says Johnny C. Taylor, Jr., CEO of the Society for Human Resource Management. At this point in time, more rules is not the answer. The workplace culture must reject harassers.
- When organizations do nothing to stop harassers and have one set of rules for the powerful and one for the powerless, productivity, workplace culture, and morale are affected in ways we can measure, and in insidious, destructive ways that we cannot.
- "Think about it, says Taylor. "Your star performer is known to flirt the line, if not cross the line, with respect to inappropriate workplace behavior. Are you prepared to fire that person, even if it means you may lose a major contract? That's when employees will judge who you are and what this company is really about. They're going to judge you on what you do, not what you say."
Participants were also more likely to see God as old than young, and male rather than female.
When you picture God, who do you see: a young black woman, or an old white man? Chances are it's the latter — and a new study in the Journal of Personality and Social Psychology suggests that that image has its consequences.
Across a series of seven studies, at team led by Steven O Roberts at Stanford University found that the way that we perceive God — and in particular our beliefs about God's race — may influence our decisions about who should be in positions of leadership more generally.
First, the team examined how 444 American Christians — a mixture of men and women, some black and some white — pictured God. In their "indirect" measure, the researchers asked participants to view 12 pairs of faces that differed either in age (young vs old), race (white vs black), or gender (man vs woman), and pick the photo of each pair they thought looked more like God. Participants were also asked to explicitly rate God on each of these characteristics (e.g. whether they thought God was more likely white or black).
On both measures, participants were more likely to see God as old than young, and male rather than female. But participants' view of God's race depended on their own race: white participants tended to see God as white, while black participants tended to see God as black.
So people clearly conceptualise God in a specific way — but how does this relate to decisions they make in their everyday lives? For Christians, God is the ultimate leader, so perhaps they look for the characteristics they ascribe to God in other leaders too. So in a second study, the team asked more than 1,000 participants to complete the same direct and indirect measures as before, as well as a new task in which they imagined working for a company that was looking for a new supervisor. They saw 32 faces that varied in gender and race and had to rate how well each person would fit the position.
The team found that when participants saw God as white, they tended to give white candidates a higher rating compared to black candidates. The reverse was true too: participants who saw God as black tended to rate black candidates as more suited than white ones. People who saw God as male also rated males higher than females. A subsequent study found that even children aged 4 to 12 generally perceived God as male and white, and those who conceptualised God as white also viewed white people as more boss-like than black people.
The results suggest that the extent to which people see God as white and male predicts how much they will prefer white men for leadership roles. Interestingly, these effects held even after controlling for measures of participants' racial prejudice, sexism and political attitudes, suggesting that the effects couldn't simply be explained by these kinds of biases. Of course, when people saw God as black, these effects were reversed, with participants preferring black candidates. But the fact is that in America, the idea that God is white is a "deeply rooted intuition", the authors write, and so this conceptualisation could potentially reinforce existing hierarchies that disadvantage black people.
However, there's a big limitation here: these studies were all based on correlations between beliefs about God and beliefs about who should be leaders. That is, it wasn't clear whether perceptions of God's race actually cause people to prefer certain leaders or whether there's something else going on that could explain the link between the two.
To address this question of causality, the team turned to made-up scenarios, in which participants had to judge who made good rulers based on the characteristics of a deity. Participants read about a planet inhabited by different kinds of aliens — "Hibbles" or "Glerks" — who all worshipped a Creator. People tended to infer whether Hibbles or Glerks should rule over the planet depending on whether the Creator itself was Hibble or Glerk.
These final studies provide some evidence that the ways in which people picture God, or at least an abstract God-like being, do indeed filter down to actively influence beliefs and decisions in other areas of their lives. The authors suggest that future work should look at how to prevent people making these kinds of inferences.
Of course, the research focuses on a specific group: all participants lived in America, and in most studies they were Christian (some of the later studies also included atheists). It remains to be seen whether similar patterns exist amongst adherents of other religions, or in countries with different demographics. It would also be important to figure out whether perceptions of God influence decisions in the real world, and not just in the lab.
Still, as the authors write, the results "provide robust support for a profound conclusion: beliefs about who rules in heaven predict beliefs about who rules on earth."
What good is diversity without inclusion?
- Striving for more diversity (in all its forms) is good, but it's what you do with and for those new voices that can change the landscape of a company. Why does diversity matter and how does it factor into the competitive environment?
- Johnny C. Taylor, Jr., President and Chief Executive Officer of the Society for Human Resource Management (SHRM), says that inclusion is the "real holy grail" in terms of making the most of diversity.
- Diversity strategies have evolved over time to focus more on commonality. Taylor says that by starting with what people have in common, we can learn to respect each other's differences.
It's possible to seek equality without seeking sameness.
- Males and females as a population, on average, are different. Beyond obvious differences in reproductive systems, research has shown measurable differences between the sexes in areas such as linguistic capabilities.
- Evolutionary biologist Heather Heying argues that while males and females should be equal under the law, that does not mean that their differences should be ignored. "We should seek equality without seeking sameness."
- People should be given the freedom to make choices, not forced to engage in activities in the name of equality.