Sunday, February 26, 2017

Women earn less than men. Why it is a big problem and what we can do about it

"If fighting for equal pay and paid family leave is playing the gender card, then deal me in! -- Hillary Clinton.

A recent headline in my hometown newspaper, said it all. “Public Pay is a Man’s World: Men far outnumber women in 100 highest-paid public jobs…”

The page one in-depth report looked at top jobs across a wide spectrum of local public employers…cities, school districts, the community college and county government.

In all cases, the top manager, (all men) earned tens of thousands of dollars more a year than the highest paid female manager in the same organization.

For example: The county medical examiner (coroner in some counties) was earning $221,964 a year. That’s a lot but he’s a physician and deserves the pay for a demanding on-call job. However, the associate medical examiner, a second-in-command position held by a woman who also is a doctor, earned just $165,264.
Is it OK that she earns 25 percent less than her boss for doing pretty much the same job?

It is NOT news that women generally earn less money than men in the work place.

Nationally, women working full-time (at least 35 hours a week) earned $726 a week, according to the latest (2015) Bureau of Labor Statistics report. The median earnings for men working full-time was $895. This 81.1 percent -- women vs men -- gap means women have less opportunity to save for retirement. And they collect less in Social Security benefits in retirement because of their weaker earnings record.

In Oregon, women working full-time (at least 35 hours) earned $734 a week, according to the BLS. That’s 83 percent of the $884 Oregon men earned working full-time and slightly better than the national figures.
In Washington, the earnings gap was wider--- $797 for women, $1,025 for men.

In the nation’s tech industry, the earnings gap between men and women is wider with the greatest disparity early in their careers. Those women 25 and younger, earn 29 percent less than men the same age. According to Fortune magazine, a job survey had the average female software programmer earning 30 percent less than her male counterpart at any age.

The discouraging part is that 30 years ago, women represented 37 percent of computer science college graduates. That compared with just 14 percent in 2013.

Every year when the earnings gap numbers are updated, there is a media thresh about what it means and why not much has changed over the past 17 years.   In 2016, men earned annual median pay of $51,212 while women earned median pay of $40,742.

From my vantage point of 30 years of full-time work experience covering business and economic news, here’s my take.

Jobs and the hours

This is not so much about wage discrimination as the kinds of jobs women tend to fill and accept as compared with where and what men take on for work. (Example: A step-granddaughter wants to be a dog walker after high school. My grandson wants to be an aeronautics engineer and fly a plane. I am guessing that their IQs are about the same.)

Women generally end up more often working in industries that pay less – health care, retailing, marketing, business and finance, human resources and in education. Men, on the other hand, tend to work in higher paying jobs in construction, transportation, manufacturing and yes, management. But why is that?

Many of the jobs in these higher paying industries could be done just as well by women as by men. And while some discrimination certainly still exists today, workplace labor laws make it less likely.

But this doesn’t start with college or that first job. It starts in high school. Studies show that kids typically make career choices before they graduate.

In selecting a career direction, young men make wages a No. 1 priority while young women tend to focus on “flexibility and security” rather than pay.

Young women do not factor in what their career choice will mean in terms of household income, long-term savings and even retirement planning.

Of course other factors undermine the ability of women to earn as much as men in any given job. Dropping out of the job market to have and to raise children may mean re-entering at a lower pay rate. Women often choose jobs at less pay that have a better work-life balance. They may take a lower-paying job that offers more security, less risk.

On the other hand, employers may see them as less reliable because they have kids and pay them less. Argh.
As well, women who work in retailing, business services and hospitality may be more vulnerable to layoffs and downsizing.

Women may choose to not take on higher-paying and more influential positions in an organization. But, according to a Wharton Business School study, they also may be passed over because of “unconscious employer stereotypes.”
For me this is a big long-term economic problem.

Women tend to live longer than men (83 vs 80) and spend more time living financially on their own in retirement. Half of women, age 65 and older, are single and on their own. Twenty-five percent of those women are living at or below the poverty line.

Women tend to earn less during their working lives for all the reasons mentioned above.
That in turn means a financially limited retirement. How many more 90-year-old women with just Social Security income can we cram into our assisted-living centers?

Closing the earnings gap

So what’s to be done? How do we close the earnings gap?

Obviously, high school career coaches could do a better job of encouraging young women to a choose career path for which they are passionate, but also pays well. Sometimes I think talking about money and making a good living, is considered crass and makes us (women) look greedy and too ambitious.

Meanwhile, jobs of the future require more technical skills. Girls must embrace math and science and consider jobs in the higher-paying tech field and in engineering, in medicine.

At least one study, suggested women just need to work more hours. According to The Atlantic magazine, 26 percent of men who work full-time worked more than 41 hours a week, while only 15 percent of women worked those hours. More hours means more income, more opportunity to save and get ahead.

Why not give women free childcare that would allow them to be moms and have a job? I know that's expensive. Should employers be encouraged to do salary audits to make sure people are being paid the same for the same work with the same job title?

And finally, it turns out that women may not that great at negotiating a job or a pay raise.

I am guessing that the women mentioned in the local newspaper report had little idea that they were earning so much less than the men they work with. I am wondering how many of them have asked for a raise?  (Sadly, a recent study said women do ask for raises but more often are turned down.)

Shouldn’t we teach better negotiating skills to young women and make sure they know that they are worth when it comes to landing and keeping a job?

As grandmothers, isn't part of our job to encourage our granddaughters to aim high, take on math and science studies and go for the gold...or at least for a higher paying job.
the Fed's Janet Yellen on workplace discrimination, click here.
"Still missing: Female Business leaders," CNNMoney, click here.
"Gender Equality by Design," click here.
"The simple truth about the pay gap," AAUW, click here.

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