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Posts Tagged ‘lawrence katz’

Recently, I came across a post on Daily Worth, a financial blog for women, written by a young woman who had just been offered a promotion at her daily newspaper: social media editor.  She was currently making $32,000, but after doing some research, realized that her new job was  worth $40,000.

So she screwed up her courage — her company was having a hiring and wage freeze, after all — marched in to see her boss, and negotiated salary:

Although I could feel the pressure, I said it would be hard for me to take the promotion for less than $36,000, and I’d have to think about it. That was tough to do because I consider my boss a friend, and I felt like I was letting her down personally. Still, I left our meeting without accepting or rejecting the position. The next day my boss called me with an offer of $35,500 plus a monthly cell phone stipend of $75, bringing the total to $36,400 annually. I accepted.

Happy ending, right?  Not by my math.  What about that missing $3,600?

As we’ve written before, we’ve become used to that seventy-seven cents on the dollar business. Used to it, but still peeved.  And really, it’s worse than that. In a study of University of Chicago MBA’s — which allowed labor economists Claudia Goldin and Lawrence Katz to compare “apples to apples”, controlling for everything from biz school courses to job experience to hours worked when it came to gender disparities — they wrote in New York Times Freakonomics column that for new MBAs, there was a just a modest wage gap — favoring men, of course — out of the blocks. But here’s where it starts to stink:

Fast forward 10 to 15 years, and the earnings gap between our male and female MBApples is about 40% for those who were observationally equivalent at graduation. But almost all of that huge difference can be fully explained by the greater number of career interruptions and lower weekly hours experienced by the women (mind you, they still work a large number of hours). One of the reasons for the large gap in earnings between male and female MBAs is that the cost of career interruptions is very great in the corporate and financial sectors. These costs are considerably lower in medicine, and somewhat lower in law and academia.

To be sure, for many women the time-out is a choice, and one that works well for them and their families.  Still, for those who jump back on the career ladder, they rarely make up for that lost time — or salary.  Still, though motherhood and lower-paying careers are convenient excuses, they’re handily debunked by Ilene Lang, who’s with the women’s research group Catalyst. “From their very first job after getting their MBA degree, women made less money than men,” Lang told NPR last year. “On average, $4,600 less.”

Very first job? MBA? Well, that settles the time-off-for-kids/lesser-paid-career-track thing. And Catalyst’s findings held even for women without children. For Lang, this says old stereotypes persist. “There are assumptions that women don’t care about money, which is crazy!” Lang said in that same piece. “There are assumptions that women will always have men who will take care of them, that women will get married, have children, and drop out of the labor force. All those assumptions are just not true.”

You mean we work for more than pocket money? But the numbers are worse than we think, according to the Center for American Progress: Working women in the United States lose, on average, $431,000 over a forty-year career. Women with a high school degree lose $300,000 on average, and women with a bachelor’s or graduate degree lose $723,000 on average. In fact, the analysis shows that the more educated and professional a woman may be, the more she loses over a lifetime of work, simply because of her gender.

But getting back to that blogger from the Daily Worth, we can’t help wondering if there is something else at play as well: we don’t speak up.  In fact, we grab that 77 cents on the dollar and say thank you very much — or, as that blogger revealed, feel as if we are letting someone down by asking for more.  Is it because we women are hard-wired to please? That we have a hard time shaking off the good-little-girl mantle? All of which comes back to bite us in the paycheck. Linda Babcock and Sara Laschever, authors of “Women Don’t Ask” note:

* By not negotiating a first salary, an individual stands to lose more than $500,000 by age 60—and men are more than four times as likely as women to negotiate a first salary.

* Women often don’t know the market value of their work: Women report salary expectations between 3 and 32 percent lower than those of men for the same jobs; men expect to earn 13 percent more than women during their first year of full-time work and 32 percent more at their career peaks.

And in most cases, men do. As we wrote on Equal Pay Day, a non-holiday that marks the date in April that women’s salaries catch up with their male counterparts’ (That’s right, as compared to the dude in the next cube, from January 1 until April 14, you, sister, were working for free): Every time we change jobs and are asked for a salary history, we’re at an increased disadvantage–and coupled with this gender-based pay discrimination disparity, well–that disparity is going to do nothing but get worse.

Sigh.

Just yesterday, I was talking with my big sister.  She was asking about our book and I was grousing about the fact that, in today’s publishing climate, authors have to do a lot of self promotion.  “I hate it,” I moaned.  “And I’m no good at it.”

She smiled, obviously older — and wiser too. “If you were a man,” she said, “you wouldn’t have a problem with it, now would you?”

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Apparently, when it comes to the wage gap, it’s the time-out that kicks us in the pocketbook. That’s the word from labor economists Claudia Goldin and Lawrence Katz, experts on the gender wage discrepancy, answering questions in Thursday’s NYTimes Freakonomics column. They’ve got some darn good data.

If you’re a numbers geek like me, you’ll be fascinated. You’ll also be a little bit pissed off. We’ve become used to that seventy-seven cents on the dollar business. But really, it ‘s worse than that. In a study of University of Chicago MBA’s — which allowed Goldin and Katz to compare “apples to apples”, controlling for everything from biz school courses to job experience to hours worked when it came to gender disparities — they found that for new MBAs, there was a just a modest wage gap — favoring men, of course — out of the blocks. But here’s where it starts to stink:

Fast forward 10 to 15 years, and the earnings gap between our male and female MBApples is about 40% for those who were observationally equivalent at graduation. But almost all of that huge difference can be fully explained by the greater number of career interruptions and lower weekly hours experienced by the women (mind you, they still work a large number of hours). One of the reasons for the large gap in earnings between male and female MBAs is that the cost of career interruptions is very great in the corporate and financial sectors. These costs are considerably lower in medicine, and somewhat lower in law and academia.

Hello, 40 percent?! You can guess what “career interruptions” means: everything from maternity leave to working reduced hours (read some variation of the eight-to-ten hour day) so you can be there for your kids’ soccer games or doctor’s appointments, or taking care of Grandma. You might think it looks like women are penalized for being, well, women. You might be right.

Which makes me wonder. Why don’t the M(en)Ba’s pick up some of this slack? Why aren’t they expected to? And we wonder why women have seven layers of stress when it comes to career decisions — or lack of same?

On the other hand — and there is always one — there’s some good news hidden here as well. Even if you earn less than your male mates due to your time outs, professional women are still likely to do okay, at least according to Goldin and Katz. They note that research shows that even if we women do get screwed financially for taking time with our families, working in the professions still gives us a layer of protection. (The authors note that 35 percent of female pediatricians, for example, work part-time. Presumably they are doing well.). In response to a question from Lisa, who saw her MBA as a way to give her leverage as a mom, the authors responded:

The vast majority of MBA moms are just like Lisa – in the workforce, occasionally part-time, often self-employed, working for firms with generous family policies and making a lot of dough. They may not be making as much as their male peers who are working full-time, but they are, just as Lisa notes, doing very well in securing their futures and keeping a toe-hold in the business. In our sample, the fraction of MBA moms 10 to 16 years out who were working part-time was equivalent to the fraction who were no longer in the labor force. And about half of the part-timers were self-employed.

What Goldin and Katz don’t measure is whether those MBA moms are happy with their trade-offs. Quite possibly, they are — to tiptoe back to Shannon’s post from yesterday — measuring their lives on something more meaningful  than Manolos or Malbecs or the weight of their paychecks. If so, it just may be that they’ve figured out how to beat the boys at their own game: These MBA moms, they have their career. But they also have their lives.

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