Female executives endure a bigger pay gap
There’s a nifty interactive graphic in PayScale, Inc.’s recent report on the wage gender gap.
If you haven’t heard of PayScale, the Seattle-based outfit aims to be the “big data” of compensation, claiming the world’s largest database of salary profiles (54 million) across 11 counties and 350 industries.
Recently graduated MBAs and aspiring vice-presidents should take a look. The graph displays the pay gap between male and female manager/supervisors, directors and executives. The gap for the first two groups is roughly 23 per cent — men are paid 23 per cent more than women, that is. This will not surprise you.
Higher up the corporate ladder, however, the gap widens significant- ly: in the executive group, men earn 32.8 per cent more than women.
What the survey found — data was collected from 1.4 million full-time U.S. employees — is that not only do women get promoted less often, “they get paid less when they do.”
PayScale uses median earnings and, by controlling for such factors as experience, education, location and hours worked, the survey showed that even in like-to-like comparisons between men and women in similar jobs, executive-rank males still earn 6.1 per cent more than executive-rank females. (The 2014 Gender Gap Index report from the World Economic Forum placed Canada in a pitiful 27th place, out of 142 countries, in ranking wage equality for similar work.)
That the gender pay gap increases as women climb the corporate ladder has serious implications: If women in power can’t get a fair financial shake, then who can?
And the results raise this question: Where along the pathways of career do women hit this financial tripwire? PayScale offers a number of instructive insights. Salaries increase for men until the age range of 50 to 55, with a median salary of $75,000 (U.S.). Women “plateau” much earlier, between the ages of 35 and 40, drawing a median salary of $49,000.
Innumerable studies have been done on the maternal wall, or the baby penalty, or the price to be paid by women who temporarily offramp their careers. But other nuances have been teased out here. Men recommended for leadership training are rewarded with higher pay increases than women coworkers who undergo the very same training. Male workers reap higher salary benefits when they are mentored within their organizations than women who are similarly guided by professional role models. Married mothers who prioritize family over work once a year (yes, it has come to that) suffer a larger pay penalty than married fathers who report exactly the same thing. It’s a hornet’s nest. In July, British Prime Minister David Cameron finally gave the issue his fullest attention, launching an initiative to “end the gender pay gap in a generation.” Cameron, freshly converted to the cause, announced that large companies — those with more than 250 employees — would be forced to publish details of the pay gap. “That will cast sunlight on the discrepancies,” Cameron said, borrowing the old Louis Brandeis line about sunlight being the best disinfectant.
Such reporting, Cameron contin- ued, would “create the pressure we need for change, driving women’s wages up.”
Or maybe not quite: Late last month, Cameron added an addendum to his transparency push. New rules will additionally compel the reporting of bonuses. So there will be no secret stashing of inequality payments.
Will that be enough? Jayne-Anne Gadhia, CEO of Virgin Money, led a recent government-commissioned review of gender diversity. The U.K. pay gap in finance and insurance is 35.2 per cent, very much in keeping with the PayScale findings. One recommendation out of Gadhia’s review is that bank bonuses be tied to gender balance on the board.
That’s one of the more out-there — read: unworkable — ideas. And Gadhia has said she’s no fan of quotas. But she’s correct on the merits of disclosure. “Make it public, measure it and report on it,” she said. “What gets published gets done.”