Why We Must Close the Gender Gap
Women in the Workplace:
Why We Must Close the Gender Gap
This is an era in national history that will surely be dissected and scrutinized in the years to come by historians and economists alike. That is because, in recent years, the state of the economy in the United States has teetered between depression and recession, limping along at an alarming low rate. Many of the woes & blows that the U.S. economy has been dealt have been attributed to Corporate America and its leadership. Historically, men have dominated corporate leadership positions, from middle management to executive boards to CEOs. Having said that, is it possible that economic recovery lies in the hands of women? Looking at the history of the gender gap is essential to understanding the need for women’s leadership in corporate America today. In 1890, when the first officially recorded numbers of women in the work force were published, only 15 percent of women claimed to work outside the home and a woman’s annual salary was about half of a man’s (Goldin, 2008). At that time, the “gender gap” could be better described as a canyon. In the 120 years since then, the gender gap has steadily shrunk, if not by concerted effort, then by circumstance and happenstance. World War II and the Civil Rights Movement brought about changes in the workplace that no one could have predicted. In 1960, only forty-percent of all women were represented in the work force...today women represent almost half of the total labor force with almost 80-percent of women working. The numbers really do not paint a clear picture though. Because the problem lies in the lack of women in leadership as shown in this Catalyst visual:
Adding to the inequality, women in their prime wage earning years, ages 30 – 44, are paid on average only 73 percent of men’s salary as noted by Catalyst, a non-profit membership organization committed to expanding the opportunities for women and business. Overall, when considering all ages, Claudia Golden (2008) points out women are paid 77 cents on every dollar as opposed to men. Historically, the gap in earnings has decreased substantially over time, but has been relatively stagnant since 1994. In 1980, the ratio multiplier was only about 0.6 increasing to 0.74 by 1994 (Goldin, 2008). This shows that there are still systemic differences in the male vs. female labor market.
Why such a disparity in pay when women represent half of the work force, you may ask. Some of the disparity can be attributed to observable factors, such as education, experience, or hours worked. But, this only accounts for about 33 percent of the 23-cent discrepancy, leaving approximately 16 cents on every dollar that is attributable to worker choice or, possibly, discrimination (Goldin, 2008). Unequal pay, work-life imbalance, opposition to competition, and choosing to avoid the stress of high-level positions, as well as interruptions due to childbearing also limit women’s professional advancement (Matsa & Miller, 2011).
Many, indeed, believe that equity begins at the board level and that diversity in the boardroom holds numerous benefits including increased revenues. This idea is supported by a March 2011 study performed by Catalyst. In this study, titled The Bottom Line, Catalyst explores the idea of an empirical link between gender diversity and corporate financial performance. By comparing the bottom lines of corporations that had the most women representation on their boards against those that had little to no women representation on their boards results showed, unequivocally, that gender diversity at the board level increases financial profits. Referring to the Catalyst diagram below, it shows that companies with three or more women on their corporate board report higher than average results when measuring Return on Equity, Return on Sales, and Return on Investment Capital. The...