20 February 2012

On workplace gender inequality

Women make up 51% of the population in the developed world. Ancient social structures had confined them to a relatively limited set of opportunities, centred around matrimony. The 20th century saw the first break with this traditional social structure, and has lead to a more egalitarian view of gender roles and socially-acceptable opportunities.
There is still a gender gap however. At home, in education, in the workplace and in most other social constructs. Understanding these gaps is therefore crucial to design proper attitudes and methods to enable individuals to be free, as much as possible, of gender-defined predestination and selection of opportunities.
In this article, I shall only try to convey my opinion on gender issues in the workplace. Naturally, many aspects of these opinions and analyses branch into and from my analyses and opinions on connected topics, such as business organization and domestic gender role stereotyping. These are important topics I shall turn my attention to in a future article.

Women's roles in the workplace are still difficult to evaluate in a complete manner. Many facets are qualitative rather than quantitative and are still open to dispute. Empiric data shows that women participate in the economy in a similar proportion as men do, a great change to the situation a century ago. However, the methods of participation are still strongly differentiated by gender.
A quick analysis of gender differences in macroeconomic terms reveals that women are paid less than men at comparable levels of education and working hours, are less likely to achieve executive responsibilities, and are more likely to be in a precarious contract situation.
Furthermore, women's educational achievements have improved dramatically over the past 50 years. Today, more women achieve Bachelors' and Masters' degrees than men do in most developed countries.
Whilst qualitative, most people consider women to be better team players than men, in particular regarding consensus-building. On the other hand, men are perceived as being more directive and authoritative.

Given this data, one could only assume that businesses are all irrational*, or that the value of directive and authoritative employees is formidable. So formidable that it alone would explain the wage gap, make companies accept the costs associated with more secure contracts, and even compensate for reduced productivity linked with less well trained employees.

Simply put, neither of these explanations convince me.
Assuming businesses are irrational means we can stop our analysis here, since we don't have sufficient conceptual information to deal with irrational actors.
As for the value of directive, assertive employees, it seems complicated to assert that it is significantly higher than that of other employees once one considers that the vast majority of corporate positions consider these traits to be negative. In fact, most companies spend money training employees (of all genders) to be better team players... A fact that goes directly against this line of reasoning.

I believe the correct analysis is a third one. More complex, but also more accurate and in useful to predict future evolution.

Comparing wages today poses clear problems :

  • Most women don't negotiate their initial salary. This is a major problem, since even a small gap initially will compound into a larger gap. Take two similarly talented employees hired at the same time. Employee W accepted an offer at index 100, whilst employee M negotiated to achieve index 108. Even if W has an annual raise of 5% and M only has an annual raise of 4.7%, it will take 27 years for W to "catch up" with M. Given that people who don't negotiate their initial salary are also less likely to negotiate raises, it's relatively unlikely in the previous situation than W will consistently negotiate a greater raise than M. In fact, if the raises are reversed (M receiving 5% and W receiving 4.7% per year), then by the end of their careers, M's salary will be 17% greater than W's. As such, it is important to try to distinguish what part of wage differences are due to gender effects, and which ones are due to negotiation. 
  • Until the 80s-90s, educational imbalance in tertiary education means the pool of "like-for-like" individuals that are expected to reach executive levels today is limited for women. Average board ages in Fortune 500 companies today is over 63. This means that the people who are sitting on the board today finished their studies approximately 35-40 years ago. That takes us back to 1972-1976... When only 2 women for every 3 men attended college, and only 1 for every 2 that was over 22 (and therefore likely most Masters' degrees).
  • Women don't study the same things as men. There are various factors that can be considered to cause differences in higher studies for each gender, but before we look at them, it's worth pointing out that these differences were, and still are largely unrewarding for women. More men enrol in STEM (Sciences, Technologies, Engineering and Mathematics) higher education courses than women**, whilst more women enrol in Arts and Humanities courses. Businesses that require Arts and Humanities graduates have been growing very slowly over the past 30 years, whilst those that require STEM graduates have been growing much faster. This has contributed to disparate career opportunities for individuals that have achieved a same level of education (Master's degree, for instance), and in turn weighs on wages.
  • Entrepreneurship rates also strongly distort wage comparisons. Today almost half of all early-stage business employees or founders are women, but the proportion was much lower 30 years ago. Furthermore, entrepreneurship still has gender gaps. Men remain more involved than women in the very early stages of businesses, and organisations started by men are less likely to be not-for-profits. Since many board members or high-level executives achieved this position through involvement with an early-stage business, the under-participation of women in early-stage businesses also needs to be distinguished from a gender-based wage gap.
  • Lastly, wage comparison is unnecessarily "top-heavy". Because of the baby-boom in the 50s to early 70s, there are more people at the end of their career relative to those entering the job market. Whilst reducing the wage gap for all ages is important, it is worth pointing out that for younger women, the wage gap is within bounds that could reasonably be explained by factors previously mentioned***.
Despite the "tightening" of the wage gap, structurally there is still a strong motivation for it to continue to exist within these conditions. Women need to be more proactive in negotiating an initial salary, and there needs to be greater emphasis placed on outcome potential for various kinds of degrees. STEM curricula are challenging, but they do lead to fields of employment with greater opportunities. Reducing the quality of these curricula is not the right method, and perhaps "intermediate" courses need to be developed, ones that develop both certain facets of STEM training and Arts and Humanities. The under-participation of women in STEM courses can be attributed in part to gender stereotypes in education****, but I do not believe that the lack of female role models or famous women in these fields is a sufficient explanation. Were it the case, then many other fields including in the Arts and Humanities would be shunned by women. Other causes, including peer pressure, methods of teaching and perceived ability likely play strong parts in determining educational paths women undertake. I shall not address these points here.

Alongside the wage gap, there are other issues that affect workplace gender inequality:
  • Women achieve fewer positions of high responsibility, in particular board membership, director or senior executive levels. This is partly correlated to the lesser participation in early-stage businesses, as well as to the fact that people aspiring to high-responsibility positions today are generally over 60, and as such have had educational paths that are quite different from the current situation. Another contributing factor is that male-dominated fields of study are still considered preferable backgrounds for these positions in businesses. Engineers of both genders are much more likely to reach high executive positions than philosophy majors.
  • Work-home balance is still perceived by companies as being a problem rather than an opportunity. Women suffer disproportionate hold-backs in their career compared to the time they are unavailable due to family and personal commitments. In turn, this leads to greater disengagement on behalf of female employees, which acts as a self-fulfilling prophecy on the company's behalf, justifying the disproportionate hold-backs in their career.
  • Attitudes in the workplace to employees of different genders are still markedly different. Women are perceived***** in certain cases to be less capable, authoritative or valuable to the company. Strong legislation against the most visible of these attitudes, sexual harassment, was a good first step towards normalizing attitudes, but there are many other aspects that are more insidious and difficult to legislate against.
These issues are not the only ones women face in the workplace, but they crystallize a certain number of attitudes that are disappearing. Businesses need to realise that in a post-industrial world, where companies are facing great challenges regarding their identity, their behaviour and what kind of vision they can offer their customers through their products and services, the most strongly required skill-sets at executive levels are changing. High-responsibility executives need to be able to see beyond the technical aspects of their job and see how their involvement contributes to building the company in all directions. People with a background in Design, Sociology or Languages can bring vision to a company that extends beyond the "business as usual" confines of technicians that have risen through the ranks. Companies will also need to adapt to more modern work-home balances. Legislation could certainly help in certain regards, but the main factor businesses should consider is that people who are happy with their work-home balance are not only more productive, but they also produce higher-quality work. The generation entering the job market is a lot more prepared to change jobs than previous generations, and will do so to achieve a preferred work-home balance. Businesses that don't re-think deeply their approach to work-home balance are going to miss out on the best talent, a cost that is much greater than the savings they might make by improving productivity. As for attitudes, they are slow to change but they are evolving. In many respects they are still linked to political and ideological debates regarding women's role in society, as well as at home. However, I do believe that attitudes are changing quickly, and amongst people of the generation entering the job market, gender-defined attitudes are receding.

Solving workplace inequality is a win-win proposition for all parties involved. It is not a question of reducing men's wages, nor of artificially inflating women's.
Fundamentally, it relies on helping young women choose their career path and education in a non-gender stereotyped environment, as well as helping businesses identify the opportunities they are missing by maintaining, even informally, gender inequality in the workplace.
I am personally against quotas, since they encourage perverse behaviour, and I feel they would only cover over the symptoms of the problem rather than address the underlying causes. However, I do believe that we are capable of solving these underlying causes.

* Or, their logic is obfuscated by some form of conspiracy, but I'm not going to entertain this notion, despite liking the X-Files.
** If one considers Psychology to be a STEM course, then the gender ratio is closer, but still imbalanced.
*** http://economix.blogs.nytimes.com/2010/07/08/for-younger-women-a-smaller-wage-gap/ women under 35 have a wage gap that is less than 10%, before correcting for types of job, level or type of education.
**** These stereotypes apply equally to teachers and students.
***** Again, this is a self-fulfilling prophecy, since the attitude leads to greater deference and creates a confirmation bias, which in turn validates the à priori impression.

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