Economics of Race and Gender - Term Paper Example

Ron Steele John Smith Business 500 10 November Gender, Women, and Managerial Positions: A Pay Inequality Analysis Introduction There is widespread recognition of economic inequality that separates men and women in the workplace. This inequality is not limited to entry-level or mid-level positions, but seems to affect employees at all levels including that of executive and managerial type positions. In this paper, I will first examine where society is at currently with regards economic equality for women in managerial positions along with progress made in recent decades. Next, I will search for possible reasons that drive economic differences for the genders in management. Finally, I will examine current efforts underway with the issue and potential solutions for the future. I intend to show that evidence exists that the imbalance in economic pay for women can be corrected with continued positive efforts by society. Body Much progress has been made in regards equal pay for equal job performance in recent decades, yet a significant gap still exists even among managerial professionals in the workforce. A study outlined in The Herald (Glasgow) mentions that women receive 17.1 percent less pay than their male colleagues (Morgan, News, p 10). One of the first significant legal moves toward equality was with the Equal Pay Act of 1963 (U.S. Dept. of Labor, 2). The Act states that it is illegal for employers to discriminate on basis of sex (p 2). Despite the Equal Pay Act, a 2005 article in The Herald reports that both females and pregnant women in particular face discrimination at work. The author found that 54 percent of Scottish women faced discrimination during pregnancy, while 50 percent of women in the UK reported similar issues. Only 20 percent of the women surveyed however decided to report occurrence of the issue (Morgan, News 10). Businesses also contribute to the problem since only 10 percent of companies surveyed in Scotland perform equal pay reviews, while only 22 percent perform such reviews in England (Morgan, News 10). Another recent article in Scotland on Sunday reported that surveys of workers in Scotland found that female mangers encountered greater pay discrimination the higher in the organization they went (Barnes, 9). The reporter mentioned that the pay gap is the greatest for top level jobs. The top 10 percent of males in Scotland were making more than 40,500 GBP, while the top 10 percent of females were making more than 34,000 GBP (Barnes, 9). Currently, women are largely left out of executive roles, and this is occurring in most developed countries. A recent article in The Independent newspaper from London showed that research performed at Cranfield University revealed that 20 percent of the ‘FTSE100’ or the UK’s 100 largest companies have no women in director positions (Mesure, Business, p 57). In brief, women in the workforce started seeing much greater numbers beginning in the 1940’s with labor shortages in the United States (Katz, Stern, and Fader, 67). By 1960, married women only accounted for 30 percent of the labor market. The percentage went over 50 percent by the year 1980, and by 1990 was considered to be the average standard (p.67). Susan Vinnicombe is a professor of organizational behavior at Cranfield University and states that companies make advancement to the top much more difficult for women as compared to men (Mesure, Business p 57). She states: “promotions have so much to do with who is sponsoring you. Women don’t have the same relationships at the top levels at men do.” (p 57). Culture seems to be a prime factor against women executives as the authors of the book A Woman’s Place Is in the Boardroom mention (Mesure, Business p 57). They say that the small number of women who eventually get to executive levels find the existing culture there prohibiting. They further state that women who are almost ready to advance to senior executive positions will often decide not to make the advancement since the cost of breaking culture tradition appears too great a price to pay (p 58). The ‘old boys club’ that exists can be a factor which women decide not to engage in a prolonged battle to fight or conquer (p 58). An article in The Guardian newspaper found that psychology may play a role in decreased salaries for female managers in regards both the perspective of the potential employee along with the hiring staff (Curtis, 3). One example was mentioned by management psychologist Marlyn Davidson. She found direct discrimination with the hiring process as women are offered consistently lower starting salaries than their male counterparts (Curtis, 3). Ms. Davidson attributed this to the long-held notion that women are ‘not worth as much’ in the workforce as men are assumed to be ‘worth’ (p.3). An interesting find occurred in a study showing an advertisement for an upper management role paying 55,000 GBP per year. No applications came in from females when the advertisement was placed (Curtis, 4). The researchers then posted an identical advertisement, except it paid only 35,000 GBP per year. In the latter case, there were a large volume of applications from female candidates (p.4). The Guardian article mentions other psychological obstacles that women as a whole face. Besides being offered lower starting salaries, women tend to avoid negotiation more than men (Curtis, 4). Women as a whole tend to seek job satisfaction over pay and benefits according to the study (p.4). However, the article places an obligation with the companies involved to perform pay audits which would help alleviate this situation (p.4). Jacqueline Granlessee is an occupational psychologist who had other insights according to The Guardian article. She stated that power structures at companies can put women at a disadvantage. Ms. Granlessee elaborated that women have tendencies to underestimate themselves and their abilities and hence look to other people or outsiders in order to have belief in them reinforced. In short, she feels that men will discuss their abilities openly while women will instead discuss their weaknesses openly (Curtis, 5). Ms. Granleese stated: “Last week, I was with a firm that has 21 partners and only one woman. Another woman was offered partnership and turned it down because she thought she was being over-promoted. What man would do that?” (Curtis, 6). One potential reason for problems still existing in the area of equal pay for equal work is that individuals who helped redefine the categorical boundaries for women are men and not women (Katz, Stern, and Fader, 65). Since men are the party in control of the economic advantage, they seek to keep their hold on the advantages that exist (p.65). Women did pose movements to advance as a group toward economic equality, but did not for the most part confront the existing structure as a whole. In fact, their movements may have made the majority less receptive as a group. This seems to be one of the prime ways that inequities remain intact today (p.65). From looking at recent data, there are indications that while women are obtaining managerial type roles, they may be at a disadvantage with regards wage equity under two different theories (Cohen, Huffman, and Knauer, 323). One theory is that to avoid legal involvement and unwanted pressures, women may be given a managerial title in name only without actually being given more responsibility in a company. The authors name this the ‘glorified secretary’ theory (p.324). Another hypothesis is the ‘resegregation theory’ where women are placed in managerial or upper level positions, yet the positions that they are named to are already in a state of decline within the organization, and hence lack real leadership or power (p.324). If these theories hold true, then that would be partial reason for problems that women could experience in obtaining wage equality in leadership roles. A study was done in 2005 by the World Economic Forum to examine female pay discrepancies in the United States and worldwide. The article mentions that achieving equality is not as simple as changing ‘official policy’ or making changes in the law. Those types of changes have made for vast improvements in the past decades, but changes also need to be made within society and how decisions are finalized (Lopez-Claros and Zahidi, 1). The authors state that one reason for the current state of inequality in pay is that not enough has been done as far as society based attitudes and behavior is concerned (Lopez-Claros and Zahidi, 2). For example, even in advanced countries such as the United States, violence against women is either passively accepted or overlooked (p.2). This is simply one example of where more improvements can be made as a society toward women. Overall, the United States ranked 17th among all countries in the article’s ‘women empowerment’ survey. Women empowerment takes into account five factors: (1) economic participation; (2) economic opportunity; (3) political opportunity; (4) educational achievement; and (5) overall health and well-being (p.8). The United States ranked in economic participation at 19 out of 63 countries examined, while economic opportunity was a lower 46 out of 63 countries examined (p.4). With regards economic opportunity, the study looked at how females stand with the quality of their employment. One interesting example in regards professional employment was within the legal field. A larger number of females are becoming attorneys, yet only 5 to 15 percent ever become a partner in a firm (p. 4). The United States also puts women at a present disadvantage in regards lack of paid maternity leave. The study points out that a majority of countries worldwide offer paid maternity leave to their workers, but the U.S. does not (p. 4). Laws that would change this would no doubt assist the United States in becoming on par with other developed nations, and give all women better opportunities for equal pay. Progress is being made yet today, and opportunities are present for companies wishing to promote greater equality. Recent ideas were proposed on methods women can do to ensure fair treatment and advancement. In the article “Holding Women Back Troubling Discoveries----and Best Practices for Helping Female Leaders Succeed”, the authors felt that several methods are useful. One method is having a formal succession plan in place where objective evaluations, testing, and leadership simulations can gauge who the best potential leaders are for an organization. This would be in contrast to companies who promote at the last minute based on sometimes non-objective criteria (Howard and Wellins, 20). In addition, recognizing performance equally is critical since past studies have indicated that women have to often outperform men to be evenly ranked. Again, objective ways of setting up performance measures should be considered (p.21). A method not used as frequently, yet could prove effective is instituting development programs to further skills of future women leaders. Women should be given equal ability to be on a fast-track development program that companies could sponsor (p.22). Proactive measures can be taken by women seeking greater wage equality in managerial type roles. One is to make any intentions known in advance (Howard and Wellins, 25). Since a commonly held misperception among many is that women wish to invest more time in their family versus their career, women can make it known in advance that their circumstances allow them to put their career as a strong priority in their lives, and that they wish to advance with the company (p.25). The authors go on to mention that among some companies, the ability to relocate for entry-level managers is important for the position. If a woman is in a position to do so, taking on assignments that require relocation can help further her career (p.25). Being aware of social stereotypes is important so that women can avoid being placed into a stereotype unknowingly. By promoting awareness, anyone can be seen to be desiring of equal opportunity with advancement (p.26). Finally, women can be in better position if they don’t take promotion or wage advancement for granted. Simply seeing how the company operates and then striving to reach out to the highest levels can promote much growth that would pass by individuals who are more passive (p.26). Yet another item that could promote pay equality is if businesses undertake equal pay reviews of their employees to see if obvious problem areas exist. Strong messages are being sent through the court system, and a significant event happened in 2010 as The Wall Street Journal reported. The writer of The Wall Street Journal article found that a jury gave a group of female employees $250 million in punitive damages for sex discrimination with underpayment of wages based on gender (Brag, 1). Norvatis AG is a pharmaceutical company based in Switzerland that gave inferior pay and promotions to their female sales employees. The company was also found to be discriminating against pregnant women (p.1). The punitive damage award was the second largest ever given by a jury, and only trailed the Exxon Valdez settlement in dollar amount (p.1). Caroline Slocock is the chief executive of the Equal Opportunities Commission and would like to see outside groups get involved more instead of having women shoulder the entire burden. Ms. Slocock states in The Guardian that having women go in front of tribunals to protest unfair pay puts a heavy burden on women. She proposed government and institutions could initiate programs to relieve this responsibility. She would like to see government take a better lead since she feels it is a public policy matter versus the personal matter that women often portray it as being (Curtis, 6). Dr. Katherine Rake is director for a large women’s organization and agrees that promoting change is not enough, and government needs to introduce better ways to enforce equality. Ms. Rake stated that this is particularly true in light of the fact that over three decades have passed since the Equal Pay Act of 1963 (p.6). Conclusion: From this examination, we can see that women have made enormous improvements in recent decades with regards economic gender equality. This effort gained significant legal backing with the Equal Pay Act. However, over 30 years after the passage of the Equal Pay Act, we see significant gaps existing. There are still methods that can be performed from legal aspects as well as improved company regulations. If these efforts can be coupled with improved awareness by women, and eventually society as a whole, then the pay discrepancies for women workers and women in executive or managerial positions can be eliminated. Works Cited Barnes, Eddie. “Pay gap widens for women the higher they climb career ladder.” Scotland on Sunday. Scotland on Sunday, 28 May 2006. Web. Accessed 10 November 2010. Bray, Chad. “Women Awarded $250 Million in Novartis Sex-Bias Case.” The Wall Street Journal. The Wall Street Journal, 20 May 2010. Web. Accessed 10 November 2010. Cohen, Philip, Huffman, Matt, and Stefanie Knauer. “Stalled Progress? Gender Segregation and Wage Inequality among Managers, 1980-2000.” (2009) 318-343. Web. http://www.unc.edu/~pnc/WorkOccs09.pdf accessed 10 November 2010. Curtis, Polly. “Work: Pound for Pound: Next Monday, the Women and Work Report will again Attempt to Tackle the Gender Pay Gap. But asks Polly Curtis, is it Practical measures we Need, or a New Assault on Sexism?” The Guardian (London). The Guardian, 18 February 2006. Web. Accessed 10 November 2010. Howard, Ann and Richard Wellins. “Holding Women Back: Troubling Discoveries and Best Practices for Helping Female Leaders Succeed.” (2009) 1-42. Web. http://www.ddiworld.com/pdf/genderreport09_tr_ddi.pdf accessed 10 November 2010. Katz, Michael, Stern, Mark, and Jamie Fader. “Women and the Paradox of Economic Inequality In the Twentieth-Century.” Journal of Social History 39 (1) (2005) 65-88. Web. http://muse.jhu.edu/journals/journal_of_social_history/v039/39.1katz.pdf accessed 10 November 2010. Lopez-Claros and Saadia Zahidi. “Women’s Empowerment: Measuring the Global Gender Gap.” World Economic Forum. (2005) 1-23. Web. http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/gender_gap.pdf accessed 10 November 2010. Mesure, Susie. “Sex Discrimination and the City: It’s Still as Rife as it Ever Was, say Experts, Business Analysis.” The Independent (London). The Independent, 10 January 2006. Web. Accessed 10 November 2010. Morgan, James. “30 Years On, Equality Laws Fail to Close the Gap on Pay; Women Still Face Discrimination at Work.” The Herald (Glasgow). The Herald, 29 December 2005. Web. Accessed 10 November 2010. United States Department of Labor. “Equal Pay Act of 1963, as amended.” (2010). Web. http://www.dol.gov/oasam/regs/statutes/equal_pay_act.htm accessed 10 November 2010. Read More