Blind Spots by Levit Alexandra

Author:Levit, Alexandra [Levit, Alexandra]
Language: eng
Format: epub
Publisher: Penguin Group
Published: 2011-10-03T14:00:00+00:00

Why Equal Employees Are Not Paid the Same

Sheila O’Malley grew up in Chicago as a self-described “girl next door.” At the University of Illinois she majored in accounting, and following graduation she worked at a series of controller jobs at Fortune 500 companies in the Midwest. “Every time I took a new position, I got a salary increase, so after a while I was doing pretty well,” she says.

In her late thirties Sheila decided to try her hand at consulting, and she found that it suited her well because she enjoyed the diversity of the work. On one project, she was placed on a team with three other senior accountants, all of whom were male. “We had the same background, education, and position, and had just received similar reviews from our client,” Sheila says. “One day we got to talking about our rates, and I learned that I was making 20 percent less than everyone else.”

Sheila approached her manager about the disparity, hinting that there was sexual discrimination occurring. “Women are relatively new to the accounting world, and there is a perception that management shouldn’t invest in people who are just going to have babies and leave. I don’t think my situation is unusual—it’s still an old boys’ club,” she says. Although Sheila’s boss did not formally acknowledge the pay gap, he did give her a substantial increase at her next review.

In a 2010 article for Harvard Business Review, “Investigating the Pay Gap,” Sarah Green says that the median salary of a woman is still only 78 percent of a man’s. This means that women have to work sixteen months to earn what men make in a year.

According to the American Association of University Women, the gap between men’s and women’s salaries starts immediately after entering the workforce. Just one year out of school, a woman earns 80 percent of what a man earns. After controlling for industry, type of job, prior experience, and other characteristics, women’s earnings are 95 percent of men’s. The unexplained 5 percent gap is viewed as evidence of bias. After ten years, despite controlling for the factors above, the average woman earns only 88 percent of what the average man earns and the unexplained gap has widened from 5 percent to 12 percent.

Also as Green reports in her article, the Center for American Progress went a step further and tracked wage gaps by age and occupation. The organization found that by the end of their careers, male managers have made $635,000 more than their female peers. Apparently, wage discrimination doesn’t get better as you get older, more seasoned, or better educated—it gets worse. If you’re female, no matter how well you perform, your raise simply might not be as high as your male colleague’s.

Besides gender, human resources experts tell us that there are a variety of reasons you could be making less money than a same-level colleague who was hired at a different time under different circumstances. “It’s a common practice for organizations to hire

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