How would you feel making 25% less than your peers who do the same work at your same level? I'd be pissed and demand equal pay for equal work.
Depending on which study you read, women earn only around 80 cents to the dollar compared to men. Unless you don't have a mother, sister, daughter or wife, men need to pay close attention as well.
Fight The Gender Wage Gap
In order to solve the gender income inequality situation, we must first understand why there is income inequality between males and females. Here are some theories from various sources as to why:
1) Men are more aggressive at asking for raises and promotions.
2) More people in leadership roles are men because men have had a head start. There is a propensity for men to take care of their own.
3) Men are more interested in more lucrative fields such as finance, private equity, management consulting, and engineering of all types.
4) Society puts more pressure on men to be able to make enough and take care of a family.
5) Men can't give birth.
Slow Improvements In Female Wages
From the chart above, you can see a steep increase in female wages as a percentage of men's wages in the 1980's as dual income households became more common.
In 1985 for example, a female college graduate made roughly $62,000, while her male counterpart made $100,000. By 2005, the female worker made roughly $74,000, a healthy 19.3% increase, but still a 24% income discount to her male counterpart.
More recently, the Bureau of Labor Statistics reported that women earned 82.8% of the median weekly wage of men in the second quarter of 2010, the highest ever recorded. However, a 17.2% gap is still not good enough.
There might be a sinister evil empire out there that conspires against women to earn equal pay for equal work. There's probably some truth to every single one of the five points above that affects pay equality. However, if we strip away all the conjectures, and focus only on fact, there is only one truth: men cannot give birth.
The Gender Wage Gap Is Unfair Because Someone Has To Give Birth
One of my good friends graduated from Harvard business school in 2006 and just gave birth. Before having her first child, she swore to me that she'd be a career woman for life.
She loved the challenges of the corporate world and she was good at negotiating deals. After taking three months off for maternity leave, she came back for a week only to give her boss her two week notice! Needless to say, her boss was not happy!
My friend lives in a paid off 4,500 square foot mansion in Hillsborough County, one of the richest counties in all of North America. She no longer wants to work because she doesn't need to work. Her husband is a multi-millionaire. She has a beautiful baby girl at home she can't stand staying away from. I'd quit too if I were her!
Someone has to give birth, and it so happens the role is placed on females. If you are a manager of a start-up, and have two equally qualified 30 year old candidates, one male, another female, you will consider the likelihood of each candidate's ability to work the longest throughout the entire year, for as many years as possible.
Wage Discrimination
Start-up life is cutthroat, and you cannot afford any employee to take off longer than 2 weeks at a time. What would you do as a manager? If you don't have all hands on deck, the limited amount of money in venture funding will run out before you can generate a revenue and then everyone loses.
At the margin, it may be logical to bake in an income that incorporates the likelihood chance of a candidate working for 12 months of the year. If the chances are for 10 months of work a year, then the pay might be offered at 83% of par.
Pay discrimination is wrong, but often it's just business. Unfortunately, it is the woman who suffers from such unspoken calculations when hired. I find this a disturbing reality because I would never want my sister, daughter, wife or mother to not earn what their male counterparts earn for equal work. Hence, I've come up with a logical solution.
Solution To Solving The Gender Wage Gap
The solution to gender income equality is passing a law that requires all companies grant the same amount of parental leave for women AND men.
If a woman gets three months maternity leave, then the father should also get three months paternity leave. We need to start eradicating the term maternity leave, and start using the words Parental Leave so that both the father, mother, partner can be treated equally.
Positives Of Parental Leave
Some of you might think it's not fair that the father who doesn't have to go through nine months of pregnancy and childbirth gets to take the same amount of time off. After all, maternity leave really is considered short-term disability my a majority of firms.
However, a good husband will be there for the mother throughout the entire nine months, waiting on her hand and foot, attending classes, and caring for her every need.
A good father will worry just as much, if not more so because he might feel helpless since he's not carrying the child. A good father would love to spend as much time with his new born as well.
Related: How A High-Performing Employee Can Negotiate A Severance – This is my wife's story after she got unfairly passed over for a promotion.
Fix The Gender Wage Gap
As a hiring manager, once you realize there's now an equal chance both man and woman to be on Parental Leave, you have a lower propensity to discriminate on pay. You may of course secretly discriminate based on whatever other metrics you find justifiable, but at least one of the main points is now the same.
If you're unhappy with your employment situation, then I highly recommend you negotiate a severance. I was sick and tired of working more and getting paid less in 2012, so I negotiate a severance worth six years of living expenses.
Get Paid What You're Worth
The experience was so transformational that I wrote a book about how to do the same thing called: How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye.
It's the only book that teaches you how to negotiate a severance. In addition, it was recently updated and expanded thanks to tremendous reader feedback and successful case studies.
If you feel you're not getting paid what you're worth, start your own business online on the side! It used to cost a fortune and a lot of employees to start your business. Now you can start it for next to nothing with a hosting company like Bluehost for under $4/month and they'll give you a free domain for a year to boot.
Brand yourself online, connect with like-minded people, find new consulting gigs, and potentially make a good amount of income online one day by selling your product or recommending other great products. Not a day goes by where I'm not thankful for starting Financial Samurai in 2009.
Here is my step-by-step guide on how to start your own website.
Updated for 2020 and beyond.
Thank you for your tip to start your own online business as a way to fight the gender pay gap. I think I am getting underpaid at my job and I think that is unfair but I’m not sure what to do about it. I wish there was some software that could help.
Hi. I’m not sure anyone is reading this as it is an old post. You did not mention the most likely cause and solution: There is no significant gender gap and thus no intervention is necessary.
The problem is that many studies compare apples and oranges. As you mentioned, someone has to make babies. You are therefore, for example, not comparing one working who shows up at 8 and leaves at 6 every day for 40 years with another of a different gender. You are comparing one such worker with another worker who takes a 6-month gap in work, then needs more flexible hours thereafter. I don’t remember if it was the Obama campaign or the Hilary campaign, but one of the Democrat campaigns raised this as an issue and when their staff was evaluated it was found that their women were paid much much less than your difference. They countered but the higher paying positions are mostly men and the lower paying positions are mostly women. That is kind of the point that there is no real systemic gender discrimination.
The obvious conclusion of course, is that if women were paid 80% of what men were paid _for exactly the same work_ EVERY smart manager would hire only women because you were saving 20% on your labor costs. You couldn’t hire a man. They cost too much. This doesn’t happen because the gender gap is an illusion.
I read a study at some time – and yes I acknowledge that social science studies largely start with a conclusion and the author finds data to back it up rather than how real science works where you start with data and the conclusion follows the data – where when apples were truly compared with apples women made something like 97% of what men made. The author could not find a discrete reason why and that was bothersome, but did find that there was little real discrimination.
My two cents.
[…] at a lower pay and title than colleagues who kept working while she was away. Regarding finding a solution to the gender wage gap for equal pay for equal work, the fix I’ve come up with is to have equal paternity leave […]
[…] it’s the year 2015, all men and women are more or less equal. The gender wage gap for work performed is hardly noticeable now, and there are plenty of female breadwinners as more […]
Parental leave doesn’t solve the gender equality problem. Even if you force men to take off, they would tend to work off the clock. Susan Pinker found in her book, The Sexual Paradox, found that male professors who were given parental leave would come back with a book or other research project completed whereas women usually did not. I think a lot of these differences are biological in nature, and so does Pinker.
Strangely the only experience I have with paternity leave was at a startup! (Go figure) Haven’t seen it since. He was very happy to take the time off. He and his wife went to Europe and stayed with their family there. The rest of the guys in the office were pretty supportive. They were all younger guys.. so that may have something to do with it – the young can adjust to changes better! They did make jokes about his time off as traveling to Europe and having a family look after your kid doesn’t seem like too much work for them!! I am in Canada though. We are entitled to up to 37 weeks’ parental leave (its unpaid). Even though we do many haven’t taken advantage yet..
…He also didn’t come back with a book or other research project completed.
Just a comment on my experiences.
I used to work at a store and had to do backbreaking work unloading pallets of 40 – 60lb boxes on a daily bases. This job was always defaulted to the male. The girls in the store would work all the lighter items because it usually would take them 4 times longer to do the heavy job. I wanted money for a cool car and to go out, so i was always volunteering to work extra days and hours. All the women consistently declined any extra work. I never called off, even when sick, even broken toe, lacerations. The women called off for PMS, cough, just feeling ill, kids plays, and all kinds of bs. When we came up for raises guess who got the majority? The Men… Shocker!!!
When i became a professional there was less discrepancy. But women still didn’t work as much. I have 3 jobs. About 1/3 in my colleagues, that i know of work as much, and all are men. While there is no heavy lifting, the overtime work, days and hours are still horded exclusively by the men. And there is still a discrepancy in sick days. One guy i know came to work with a urine catheter instead of calling off. I have yet to see a women do anything close.
I know this does not account for all, but there is something to be said about mens psyche and strengths when this topic is discussed. And it always seems to be left out.
You should take a poll of how many fathers would take maternity leave to aide pregnant women. I’m curious to see how many would accept it.
Sam,
I was thinking about your earlier post… more men are unemployed now but in this post it shows men are making more.
So it means companies are shedding their higher salary people… so woman may make less but have better job security. Not a bad tradeoff…?
-Mike
I’ve been thinking about this a lot lately. I work in a male dominated field (financial services) and while I don’t plan on having any children for around another decade, I do wonder how my work would react.
Equality all around is a great concept. Our society is filled with biases of all sorts, and both women and men get shortchanged at one thing or another. Sometimes, this can cause a real impact on lives when totally unnecessary and preventable It’s good to have such discussions to bring topics in the open so that they can be looked at intellectually.
I have heard negative things said about a guy who wanted to take paternity leave some years ago. Along the lines of it implying that he’s not a “real” man, not a true provider, a slacker on the job, etc. It left me thinking that the person suggesting those things was a complete tool. Anyway, I do believe that the guy wanting to take leave did in fact do it.
Stereotypes are real. A man who gets a lot of girls is a player. A woman who has relations with a lot of men is a slut. It’s a real perception. A man is supposed to work hard. Hard as he can. And not complain. If you don’t work so hard and complain a lot, that might not get funny looks in France but here we have different views of what manly is. Different values of different countries probably explain why this country is a lot more productive than, say, France, and why we are back-to-back World War champions.
I LOVE this idea! I don’t necessarily know if I will have kids, but this would definitely make a huge difference.
You know what would also be cool? If employers had to actually pay money for the parental leave to BOTH genders.
I like the concept of family leave, but i’m still not sure that it would close the wage gap. Obviously, if each took off the same amount of time and did the same work, they should get paid the same, but what if one was a better performer (male or female) or had more experience? Should a wage gap exist in that situation?
Yes, a wage gap should exist if one employee is more qualified than another for sure.
There will always be a discount or a premium. The point is to narrow it so that it statistically doesn’t really matter.
Besides, I just want my 3 month parental leave too.
Younger workers? Or just those ages 25-35 who are most prone to having children?
Every single one of my gen-x friends is out-earned by his wife. I think these stats are going to adjust hard as the big money earning boomers leave their positions.
That’s awesome! And I hope you are right! It would be great to get pay equality, and also lessen the burden of men to support the entire family. This could be the dawn of a great era for women and men!
I very much agree. There are many reasons to advocate for fair treatment of all employees. However, don’t under estimate the role of #2 on your list, either. My company does offer parental leave but the good old boys network is still strong (as it is in most firms) and you can see it in the pay scale.
I like the parental leave idea. It could also help with child care costs; mom takes off the first 3 months, dad takes off the following 3 months. Both parents could bond with the baby and not have to worry about day care options until the baby is 6 months old and hopefully can handle germs better. (Day care centers have germs, you know. ;) )
As for the salary issue, it’s definitely unfair. Even if a woman quits after she has her baby, she was still doing the same job a man would have done in that time. If anything, why don’t companies pay their women the same, but require they pay a “rehire” fee if they decide to quit after having a child. That way the woman earned equal pay, but her manager is reimbursed a small fee for having to go through the hassle of rehiring for her position. Problem solved. Thoughts?
I think that’s a great idea alternating 3 months for the mom, 3 months for the father! It could cause a SERIOUS decline in production output, but hey, that’s equality!
Taking 3 months off, to only come back and say “I quit” is kind of rough… implementing a reimbursement fee sounds fair if that happens. We have that when companies pay for our MBAs. Got to stay on for 1-2 years or else you must pay back.
You hit the nail on the head with this post. Although people would never admit to it – and legally in the UK can’t – the primary reason for hiring a man over a woman (assuming equal resumes) is the fear of the woman getting pregnant and not returning to work. Controversial topic indeed but good for you saying it how it is!
I agree with other comments that fathers should get equal rights to paternity leave – the rule in itself is sexist; giving woman longer leave than men.
I hear the UK is incredible AWESOME for employees! 6 month maternity leave, 3 months heads up that you are going to get laid off to use the company resources, etc. Is this the case? Help clarify!
thx
Great topic…this is a tough one. I think it is changing but has a very long way to go. We need to get more women into the pipeline for the highest paying jobs. Women on the other hand, have to stick it out to get the experiential exposure. It starts with the men in charge…identify, and challenge women. Given equal coaching they will succeed. I personally have two female leaders that i highly compensate based on results and potential.
“Stick it out”…. longevity is key. If someone drops out of the workforce before 35 for a year or so, others will pass them by.
It may well vary by country. In my mgmt team in Asia, 80% are all women and women make up the top 3 salaries besides me (who is the boss of the business unit and gets paid the highest, natch). Women also get 8 weeks maternity leave and fathers get 3 days leave.
Here it seems like women are better negotiators of salary. In many households women run the budgets and the finances. Somehow the men are content to sign over their paychecks and then go out drinking & playing cards. Funny that.
-Mike
Such interesting perspective Mike! Gosh… 8 weeks vs. 3 days.. that sucks!
Guys are simple. Seriously. Cards, drinking, maybe play a sport or something and that’s it!
Here’s the basics- most women don’t get paid maternity leave. They do get up to 3 months leave protected by FMLA after bringing a child in to their family. Men get that exact same protection.
What women do get that men don’t (usually) is short term disability that pays their salary at 50-66% for 6 weeks after giving birth (or 8 weeks if they have a C section). That’s right, women are considered disabled for 6-8 weeks after giving birth.
I’m pretty certain that women in poverty stricken countries would be pretty surprised to learn that they are supposedly too disabled to work for 6 weeks after giving birth.
But wording aside (though I would argue that labels do, in fact, matter) the fact that women are covered under the disability program after giving birth gives rise to two beliefs- that all women have paid maternity leave (nope- covered under the same leave a man would get if he had to have knee surgery), and that women get really long paid maternity leave. Again, the FMLA protection does not require leave be paid, it just requires the person still has a job. However, if you only have to use 33% of your PTO to get your full pay for 6 weeks, that leaves you with 66% of your PTO left to help cover the rest of that 3 months if you want to take it. This means that a women giving birth only needs 320 hours (8 weeks) of PTO to cover a full 12 weeks off at full pay.
Paternity leave, while protected by FMLA exactly as maternity leave is, does not qualify for disability coverage, so if men want to get paid while on those 3 months of leave, they must have 480 hours (12 weeks) of PTO saved up to to receive their full pay for the entire time.
I earn 208 hours of PTO every year (26 days- 1 day every 2 weeks). I can store up to 150% of that. If I’m at 150%, I don’t earn more PTO until I start using it. As a woman, that means that if I start at my max PTO and have 6 weeks of disability, I would be able to stay out 11 weeks and 4 working days and still get my full pay.
If I’m a man, I run out of PTO after 8 weeks and 3 days.
Now here’s the thing about using disability leave to claim we have paid maternity leave in this country- not only does it imply that women are disabled by giving birth, it also only applies to women who give birth. That means it discriminates against every father and mothers who choose to adopt.
We call it maternity leave because we know it discriminates against fathers. But it’s not even maternity leave, because we don’t offer it to all mothers. We only offer it to those who are pregnant. In other words, this country has pregnancy leave.
While I don’t think we need to go as far as the Scandinavian countries (where each parent gets something like 6 months completely paid, can be taken consecutively or concurrently) I agree that we need parental leave in this country. We need to stop calling women who give birth disabled and we need to stop discounting the contribution of parents who don’t give birth.
I’m lucky in that my company offers 2 weeks child bonding leave, fully paid, without touching PTO for any new parent- no matter how they become a parent (also applies to foster parents when a new child enters their home).
Now we all know 2 weeks probably isn’t enough to actually adjust to having a new child in the home, but at least it’s something.
Thanks for the clarification on disability, as you are exactly right. Guys get disability too, but of course, since men can’t have babies, they don’t qualify when the wife gives birth. I have no idea, but I am assuming 30 days is generally long enough for a woman to heal?
Companies can just call disability leave, parental leave for fathers. Or just recategorize all together to just Parental Leave. Can’t it be that simple?
Companies don’t call it disability- the state does. That’s not something companies have any control over. From my understanding, it’s pretty universal- all states have the 6 weeks for a normal birth, 8 weeks for a c-section, but that is state law, not company policy.
I should also say it’s not “pregnancy leave”, it’s giving birth leave- women who miscarry don’t get the same amount of leave. But birth mothers- women who give their babies up for adoption, do get the full 6-8 weeks. (Please note as a hopefully soon to be adoptive parent, I am grateful to birth mothers, and am not discounting the fact that they’ve given birth. But women’s bodies are made to be able to give birth and then to be able to care for the child starting pretty immidiately. Giving birth does not disable most women.)
Calling giving birth a disability was done with women’s best interests at heart- it meant that it didn’t matter if employers offered a maternity benefit or not, women were guaranteed some pay and the protection that goes along with temporary disability. It was a gov’t work around from another era.
As a society, we have progressed to a point where that work around should become a relic. We need equality in parental leave for all new parents.
Yes, it is quite interesting how a parent who adopts a newborn does not get the same parental leave as a mother who gives birth.
I’d love to hear other women who’ve given birth chime in on how long it took them to recover, and what their thought process is on pay, time off, etc.
As an interesting side-note on the disability point. Did you know that minimum wage and maximum hour laws got their start in this country because states wanted to protect women? Yup, women because “women couldn’t fend for themselves” or “needed extra protection” states passed these laws. At first the Supreme Court struck these laws down because it was thought unjust to make these assumptions about women – the Court was saying that women were equal to men. Of course you can’t boil down about 40 years of legal history and case law to one or two crass points, but one of the principal changes made to the laws that made it so the court upheld them was to apply them to everyone (the other change was a sudden shift in the way the court did business during the New Deal). The relevance here is that laws which got started based on sexist views about needing to “protect” women sometimes do eventually do get expanded to cover everyone. So it wouldn’t surprise me at all if in the next 5 to 10 years paternity leave laws because standard.
I also expect that in 5-10 years the US will start catching up with Europe when it comes to parental leave. And I know these changes take time, but it always seems silly to me when we use the excuse “but this is the way it’s always been” to prevent ourselves from fixing what is obvious discrimination.
We’re getting there, as FMLA protects parental leave equally for mothers and fathers, regardless of giving birth or adopting. It’s the state and company policies that use short term disability to cover maternity leave, that are still behind.
I’m not sure catching up is the right phrase. Europe is a lot less productive than we are and are not able to project and protect their interests as we are. It is simply a biologic fact that only women can give birth. And nurse a baby. So far I like America and I think Europe is off track and in the process of failing. Many of us still believe in America and believe we are a power of good. Europe has given up on its self confidence. It has brought too much “multiculturalism” in and is giving up its values to be replaced by others’ values that may not be benign.
Btw, I would be most upset if I was a single woman, or married woman who couldn’t have kids in this case and see a female colleague to take 3 months off every year for multiple years.
Most women don’t have a kid every year. (Your not supposed to be able to get pregnant while lactating, though we’ve thrown off this natural balance by bottle feeding- which I’m not judging. It’s simply a matter of biology.)
But it is frustrating, as someone who hopes to adopt, to know that I won’t be able to have three months off paid with my new child, even if my child is a newborn I bring home from the hospital because I don’t qualify for disability nor can I use my sick time left over from our old system (I’m actually going to be doing some push back on this) because I didn’t physically give birth. Giving birth does not change the demands a new infant places on it’s parents (both of them).
I think men have a right to be annoyed- not that women get paid maternity leave (kind of), but that we don’t all have the same parental leave benefits.
Your= you’re on first line. I need to proofread before I hit post.
Paid time off? I assume you are an employee not an owner. I am a small business owner. I can only pay rent and pay employees when money comes in. If an employee is off for more than negotiated vacations I have expenses but no income. The business will not survive. I bet a large corporation where one person makes little difference does not notice but if I had an employee – or probably if most small businesses had an employee take three months off and I had to pay her, and if I also had to pay equal or more salary for someone to do her job … well that’s something the company could not afford.
Hey Sam,
Great job on tackling such a controversial topic! I’d be curious to see what actually causes the disparity (if it is subconscious, or intentional). One thing that I always try to remind people is that employers will try to get you at the lowest price they think they can. Employees, in general, will never receive what they are worth in pay, as there would be no financial benefit to a company for hiring them.
Obviously, there are inefficiencies in the system (such as the lazy guy who works at a mega corporation), but if an employer won’t gain from you financially, then they have little incentive to hire you. Maybe the employers bargain more aggressively with women as they feel less intimidated by them. Either way, it’s a shame. I certainly wouldn’t mind Paternal leave! Good read! :-)
Thanks,
Timothy
Hi Tim,
Good to hear from you. We men must fight for our Parental Leave rights! Unite!
Hello There,
I would love it if hubby could stay home once we do have a child! I like this Parental leave idea, I’m not sure if employers would go for it though. It’s a very interesting thought. I’ve always been curious how they arrive at the statistics though. If you take the hourly wage into account, then draw that out to an annual salary, you’ll end up with different numbers.
As an example, I worked at an office where many of the women were chronically out on FMLA because of health issues, but rarely were the men out (to be honest, I can’t recall a single case for men on FMLA). Once sick pay and vacation ran out, the women wouldn’t receive any pay. This fact alone would create a huge discrepancy between the annual income of the men and women.
I don’t know how those are accounted for in these types of statistics. I agree though, if Men and Women are doing the exact same job at the exact same efficiency, they hourly pay should come out to the same.
Humbly Yours,
Humble Laura
Hi Laura,
Statistics are quite misleading indeed. Given we are in the land of lawsuits, I cannot believe there is much discrepancy on a PER HOURLY wage for the same position. However, for the yearly income total, there might be.
As a father, I love your solution. Only one problem I foresee… The proof of who the father is for the parental leave. Maybe require paternity tests for fathers who choose to take this leave? Regardless, I think this would be the biggest step towards income equality. Perhaps a senator or congressperson will read this post and come up with a bill.
That would be hilarious if men had to do DNA testing to prove they are the father! Ain’t gonna fly!
I think it may help, but it won’t change people’s thinking in itself. As you pointed out, you have a chance to hire one person from a choice of a man or woman. You will decide against the woman not just because of paternal leave, but childcare issues. We discriminate all the time. I experienced age bias, but it wasn’t considered illegal. Companies did not consider my resume because I was too old (experienced) and expensive.
Just changing the pay is a good first step, but changing the job may be a good second step. Things like flex hours, working from home or job sharing to accomodate people. It may even make people more effective.
The solution is equal parental leave for men, women who adopt, and employees who don’t have have kids!
We will crush our productivity, but at least we will all be treated equally.