Explaining the Wage Gap

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Every year on National Equal Pay Day, activists recognize the point in the year that women’s pay catches up with her male equivalent. In 2016, Equal Pay Day will fall on April 12. The PR gimmick is designed to bring attention to the fact that women still earn about 78 percent of what men earn, decades after entering the workforce in significant numbers.

There are regulations in place to ensure that hourly workers who do the same job get paid equally, and it’s rare to see blatant discrimination based on gender. But there women do earn less over their lifetimes, for several reasons. They may take time off early in the careers to have and raise children, which can put them a few years behind their male peers. They often have the primary responsibility for family caretaking, making them more likely to work part-time or take jobs that require fewer overtime hours or less travel.

There’s another reason women make less than men, and it’s not something we can blame other people for; the fault lies squarely with us. In Give and Take: Why Helping Others Drives Our Success, author Adam Grant writes about several studies that measured how men and women negotiated. In one study, men and women were offered the chance to play a word game and be compensated between $3 and $7 for their time. After the activity, the participants were offered the minimum payment, $3, with the person making the offer asking, “Is $3 okay?” Men were eight times more likely to ask for more money than women.

In the next experiment, participants were offered the $3 with no question as to whether it was okay. None of the women asked for more money, but 13 percent of the men did. That is how a salary gap gets started.

A study of Carnegie Mellon MBA graduates found that 50 percent of the men negotiated their starting job offer after graduation; only seven percent of women did. Men who negotiated improved their salaries by 7.6 percent on average. The difference could result in over $1 million in salary losses for women over their earning lifetimes.

In addition, men ask for raises more often and more assertively than women. When women do ask for raises, they tend to come in more softly and are less successful in the negotiation than their male counterparts. One theory is that women don’t want to be perceived as aggressive and demanding, so they soft pedal their pitch. For the record, that theory seems to have merit. In recent studies, both male and female managers gave smaller raises (usually smaller than what was requested) to women. And both sexes did tend to rate women who were aggressive negotiators as more unpleasant than men with the same attitude.

Blogger Lee Miller, writing for Monster, lists three mistakes women make in negotiation.

The first is not recognizing an opportunity. Women tend to take the first price offered as final, while men see it as an opening. Studies have shown that women pay, on average, $1000 more for cars than men, in part because they don’t enjoy the negotiating process.

Second, Miller writes, women don’t negotiate on their own behalf nearly as vigorously as they do when they’re working for someone else’s success. A University of Texas study invited women to negotiate a raise for themselves, then switch over to championing a friend. When negotiating for themselves, they asked for an average of $7000 less than men. When negotiating for a friend, they asked for amounts equal to men.

Women are also less likely to walk away from a deal that isn’t what they want. Saying “no” to an offer can be scary, and women may not have the confidence that they can do better. Or perhaps they’re thinking that they’ll get more money later, once their value becomes apparent.

But as Glinda the good witch told Dorothy, “You’ve always had the power to leave, my dear. You just had to learn it for yourself.”

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