A Recruiter Explains: Pay Inequality Affects Men and Women Equally

Supply and demand play a much larger role than institutionalized bias

vitaly 145502 A Recruiter Explains: Pay Inequality Affects Men and Women Equally

Virtually all of the difference in pay between men and women can be explained by the choices that each make. Vitaly/Unsplash

Hot on the heels of our national celebrations of Ferret Day on April 2 and Tweed Day yesterday, comes today’s recognition of Equal Pay Day. Today’s holiday was concocted to call attention to the tendentiously derived statistic that women earn only about 80 percent as much as men.

This is not to say that the statistic isn’t accurate—only that it does not tell the whole story. If you add up all the dollars earned by women and all the dollars earned by men and divide by the number of hours worked by each, women do, on average, earn about 80 percent of what men earn. But using that fact alone to infer that there is some gender-based bias at work is to overlook a variety of other relevant factors. As Bill O’Neil, my old business professor at Villanova, was fond of saying, “That’s utilizing statistics the way a drunk uses a lamp post: For support rather than illumination.”

Virtually all of the difference in pay between men and women can be explained by the choices that each make. Generally speaking, men tend to choose higher paying fields, work more hours and overtime, take on riskier and more dangerous assignments, and take fewer breaks in their employment to raise kids or care for elderly relatives. All of these choices impact salary.

For instance, year after year, the top paying college major for newly graduated baccalaureates is Petroleum Engineering, a field that includes the study of advanced mathematics, geology and sophisticated drilling techniques. The lowest paying major is Early Childhood Education, a vitally important role, but one that requires far less academic rigor. For whatever reason, the vast majority of petroleum engineers are men; the majority of kindergarten and nursery school teachers are women.

These majors and the careers that follow are freely chosen despite the fact that it is well known that petroleum engineers earn far more than early childhood educators. The salary difference isn’t based on gender, but on the fact that petroleum engineering requires much more rigorous training. Not only are there far fewer people who can do it but, frankly, far fewer people who actually want to do it. It is that scarcity that is most responsible for the higher salaries. In fact, despite active attempts by colleges and businesses to recruit more women into higher paying STEM fields, less women still choose to pursue that path. Lower paying fields like education, social work, and the arts continue to attract more women. Because there are a lot more jobs in those lower paying fields, the numbers are skewed even more. Supply and demand play a much larger role than institutionalized bias.

Of course, facts and statistics rarely deter those trying to advance an ideological agenda. Among the other arguments put forth to explain the pay gap is the notion that because of the way they are raised in our patriarchal society, women are simply less likely, willing, or able to negotiate higher salaries. Using a blatantly sexist argument is apparently appropriate if in doing so you hope to eradicate sexism.

This flies in the face of my own experience, though. Among the other fields that have a disproportionately high percentage of women is Human Resources. I negotiate contracts with female HR execs on a regular basis and my experience is that they are every bit as capable as any man I’ve worked with in that regard. My wife and business partner, who negotiates dozens of offers every year, would also take offense at being categorized as some sort of shrinking violet when it comes to negotiating.

But, for the sake of argument, let’s say that some women are poor negotiators. Well, what skills are necessary to be a good negotiator? Experience, confidence, data analysis, strong persuasion and communication skills, and the ability to think and adjust on the fly all come to mind. But aren’t these all valuable skills in the workplace? If a candidate possesses all of these is it a surprise that they’d be considered worthy of a higher salary whether a man or a woman?

As a recruiter, I have accepted hundreds of assignments from clients over the years and have never been told anything like, “Our target salary in filling this position is $100,000—unless you can bring me a qualified woman. Then the salary tops out at $80,000.” That just doesn’t happen in today’s workplace, especially with larger firms. In fact, if employers in highly competitive, bottom line-focused organizations could get away with offering lower wages based strictly on gender, men would find it very hard to ever get hired for jobs that didn’t rely strictly on physical characteristics like height or strength. All other things being equal, companies would just hire the cheaper female employees.

This isn’t because my clients are all enlightened feminists; it’s because it’s the law and has been for more than 50 years. The Equal Pay Act of 1963 essentially guaranteed equal pay for equal work. This has been buttressed by the Lilly Ledbetter Fair Pay Act signed by President Obama in 2009. At the time, the Ledbetter law was criticized as a payout to trial lawyers ,and conservatives predicted a flood of equal-pay lawsuits. While some suits have been filed under the law, they’ve come in a trickle rather than a flood, again indicating that gender based pay discrepancies are not as common as originally imagined.

There are, of course, some genuine examples of pay inequality—but they tend to affect men and women equally. For instance, some industries or functions just pay more than others even for equal levels of education and experience. MBA salaries from the top business schools are usually considerably higher for those going into consulting or finance than they are for those taking on a position in consumer products. Is that unfair? Maybe, but probably no more so than the pay differences between engineers and kindergarten teachers. The differences are largely a function of supply and demand.

Even within industries, salaries can vary dramatically by firm. For consumer packaged goods marketers, for instance, top-tier companies with large product portfolios and advertising budgets usually pay more than smaller companies that rely more on trade marketing. Entrepreneurial, family-run firms generally pay even less, but sometimes offer other benefits in terms of work/life balance that more than compensate for some employees. Improving your salary is almost always a matter of improving your skills to appeal to a company or an industry that will pay more for them.

What if you discover that you are being paid significantly less than others at your company for essentially the same work?  I always urge employees who feel they are underpaid to make their case directly to their supervisor. It generally isn’t a good idea to compare yourself to others within your organization because you may not know all of the details behind another employee’s arrangement with the company. Instead, find out what comparable companies are paying for similar jobs in your area. Resources like salary.com or Glassdoor.com can be invaluable in setting some benchmarks.

Recognize that your company may not have the same cost structure as others within its industry or within your geography. Ultimately, any given company can only afford to pay what it can afford to pay. If they aren’t competitive, they may simply not have the financial wherewithal to improve your salary. In such cases, your most realistic solution may be to look for a new job elsewhere.

That said, it isn’t uncommon for companies to lose sight of the current market rate for specific positions over time, especially for long term employees. Good companies want to compensate employees fairly and expect to be competitive with other firms. Your best approach is to address your background, skills, and qualifications in terms of what you are doing for your company and what you can do in the future. Don’t talk about what you want, but about the problems you can solve for your boss and the increased responsibilities that you’re willing to take on—just as you would in an interview for a new job.

Stress that you want to do more and are willing to do whatever it takes to advance in your career and make more money. Use your research to buttress your position if it supports paying you more now. Develop a plan with your boss to get you to the next level, establish benchmarks to measure your progress, and hold him to his commitments to you. If the company won’t commit to such a plan or doesn’t honor its commitments as you progress, consider making a change. Once you decide to move on, however, it is almost always best to do so once you get the offer you’re looking for from another firm. Getting into a bidding war or accepting a counteroffer from your existing firm rarely works out in the long run.

If you believe you are being paid less exclusively because of gender-based differences, you should consult an attorney. These cases are rare and can be hard to prove, but the law is on your side. If you have a legitimate case your lawyer will want to gather as much supporting documentation as possible.

Expecting that you will improve your situation by celebrating Equal Pay Day, however, will probably leave you disappointed. Besides, you’ll get more satisfaction from tomorrow’s made-up holiday. April 5 is National Deep Dish Pizza Day.

Keith Liscio is the president of Patrickson-Hirsch Associates, an Executive Search firm specializing in the placement of marketing executives at consumer-focused organizations.