Fix the wage gap with transparency
For most of my career as a journalist, I’ve had no idea whether I made as much money as my male colleagues with equal education, experience, performance, and that ineffable and often highly subjective quality, “talent.” In many newsrooms, like much of corporate America, talking about pay is either actively discouraged, prohibited, or simply not done.
The one time I did learn that a male reporter doing the same job was earning more, I overheard a conversation in the elevator about how our boss paid him more because he had a family.
Well, he had a wife. Who made more than he did.
So much for those who would explain away the persistent gender wage gap as solely due to women making different career choices, failing to negotiate, lacking confidence or ambition, tending to work fewer hours, and requiring more flexible schedules or leave to handle caregiving responsibilities.
Though none of those factors applied to me at the time, clearly, they do indeed contribute to the much-cited fact that women in the United States earn 79 cents to every man’s dollar — 60 cents for African-American and 55 cents for Hispanic women
As Equal Pay Day approaches on April 12 — the additional length of time women must work to earn as much as men did in the previous year — five women on the US national soccer team have filed a federal wage discrimination complaint saying they earn as little as 40 percent of what male national team players do, even though the women have won three World Cup and four Olympic championships while the men are, in the words of The New York Times, “mediocre.”
To close gaps like these, pay equity advocates have, rightly, pushed for a higher minimum wage, paid leave, better child care, stronger unions, negotiation training for women, and legislation like the Paycheck Fairness Act. But these solutions, still struggling to gain traction, don’t get at the root of the pay gap: We’re biased. That’s just how our brains are wired. And right now, the default is wired to favor men.
New research out of Cornell University, like previous studies, has found that as much as 38 percent of the pay gap simply can’t be explained by anything other than discrimination. The Third Way, a research group, found recently that we simply value men’s work more than women’s — of 116 occupations it studied, men outearn women in 114.
Studies have also found that even in female-dominated fields like nursing and teaching, men tend to make more than women, and that once women enter a field, wages begin to drop.
To really close the pay gap, we need to change the default. To do that we need to design transparent, gender-neutral systems so that bias and subjectivity can no longer derail the best and fairest outcomes. Like when orchestras began auditioning musicians behind a curtain, and the share of women rose exponentially.
Rather than spend $8 billion on diversity training to try to “de-bias” our brains, as corporate America does every year, Harvard economist Claudia Goldin has argued that firms could make the gender pay gap “vanish altogether” if they made flexible work the default, rather than disproportionately rewarding those who work long and particular hours.
In her new book “What Works: Gender Equality by Design,’’ Iris Bohnet, a behavioral economist at Harvard’s Kennedy School, writes that when women at two of the largest stockbrokerage firms in the United States earned about 60 percent of what the men made, everyone assumed that the women just weren’t that good. It took a class action lawsuit to release data, and analysis by the Wharton School, to discover that the women were given the worst-performing accounts to start with. When women were given more valuable accounts, the pay gap disappeared, and the companies prospered.
So what if all companies made transparency the default?
Take Salesforce for example. CEO Marc Benioff revealed last year that after the company investigated how men and women were paid, he spent $3 million to close the unexplained pay gaps they found.
Natasha Lamb, director of Equity Research and Shareholder Engagement at Arjuna Capital, which manages about $1 billion in assets, is pushing to make transparency the default. In the past year, she’s taken action to file shareholder proposals calling on heavily male tech companies like Amazon, Intel, Apple, and Expedia to look at their own “blind spots” and share their pay gap data. It’s not just right, it’s the smart thing to do, she said. “We know that more gender diverse executive teams lead to more innovation and better performing companies,” she told me. “So as investors, that’s what we want to encourage.”
The Equal Employment Opportunity Commission is in the process of making transparency the default: Under an executive order issued by President Obama earlier this year, the government agency could begin collecting pay gap data on the nation’s biggest employers as early as this fall and publish aggregate results in 2017.
“If we don’t know where the problems exist, then we can’t ask the questions to better understand what might be driving the disparities,” EEOC Chair Jenny Yang said at a recent event at New America, a nonpartisan think tank where I work. “Equality can’t be left to chance.”
Will transparency be demoralizing, as it was in my case? Absolutely. But it could also be the spark for designing fairer systems for hiring, promoting, performance evaluation, and pay that will, finally, create a new default: equality.
Brigid Schulte is author of “Overwhelmed: Work, Love & Play When No One Has the Time’’ and director of the Better Life Lab at New America. She was a staff writer at The Washington Post for nearly 17 years.