byFairygodbosson Mar 23, 2016

Why Women Are Paid Less Than Men

Glassdoor Pay Gap

Photo credit:Glassdoor

Mark Twain once said “There are three kinds of lies: lies, damned lies, and statistics.”

When it comes to the gender pay gap, there seems to be a never-ending stream of statistics and data about whether there’s a pay gap, how much of one there is, and if there is one — what causes it. In these debates about the gender pay gap, there’s an unspoken assumption by some people that maybe there actually is no issue with the fact that men and women get paid differently — so long as those reasons are because of the different choices that men and women make, their experience or education levels.

Our fellow review site, Glassdoor, has just released data based on over 500,000 U.S. employees and looked at the gender pay gap to try to explain it’s causes. They found:

  • A 27% difference in total pay between men and women
  • A 22% difference in total pay after controlling for age, education, and years of experience
  • A 11% difference in total pay after controlling for industry, occupation, state, year and employer size
  • A 9% difference in total pay after controlling for specific employers
  • A 7% difference in total pay after controlling for specific job titles

 In short, after controlling for pretty much everything that could be controlled for, there’s still a difference of 7% in total compensation between men and women that can’t be explained. Perhaps that remaining difference is due to discrimination or bias, but it’s hard to say. Moreover, this Fortune analysis points out just how complex the gender pay gap issue is. Just because something is “explainable” doesn’t mean it is not based or related to bias and discrimination.

In other words, do women opt not to study, and work in certain job titles, employers and industries because they are dissuaded by bias or culture there? If the answer is “yes”, just because there is an explanation doesn’t mean that explanation is perfectly benign. Moreover, does age and years of experience matter if two people are doing the identical job?

Progressive employers such as Salesforce, Intel, Apple and Accenture, among others have conducted internal gender pay audits. We don’t know the exact details of these audits but many have described the key to equalizing pay between men and women at their firms is to simply pay according to the job function performed rather than look at historical salaries, or other measures. The basic idea is that if you get a job, you should get paid what that job is worth irrespective of your education or years of experience.

Whatever the reason for the gender pay gap, sometimes we think it’s important to step away from the weeds and look at the bigger picture. Whatever the reason for average pay differences between men and women, I think most of us would do well to consider the fact that there is no country in the world where women make more than men

Stop and think about that for a moment. Imagine if that statistic were flipped on it’s head and there was no country where on average, men were paid as much as women. What would that world look like and what would it mean in terms of our governments’ budgets, our society’s investments, and our companies’ management teams? Moreover, how likely would it be that men would accept this?

What’s clear to us is that on an individual level, if you’re a woman in the workplace, you have good reason to tread carefully when it comes to your pay. You may in fact be paid perfectly fairly, but it’s never hurts to do your compensation research (and negotiate)!


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