Know Your Value: The gender wage gap and the perception of value

Chapter 3: What’s a Woman Worth?

The Gender Wage Gap and the Perception of Value

With Marie C. Wilson, Ilene H. Lang, Brian Nosek, Tina Brown, Jack Welch, Donald Trump, Donny Deutsch, Susie Essman, Senator Claire McCaskill, Brooksley Born, Sheila Bair, and Hannah Riley Bowles

Not Yet Equal

Women are not just lagging in wages; they are far behind when it comes to leadership. Women make up only seventeen percent of the United States Congress. The United States ranks seventy-second of 189 countries in terms of the proportion of women in their national legislatures—behind France and even Afghanistan and Pakistan. Across such industries as business, law, academia, journalism, and politics, on average, women hold fewer than twenty percent of the top positions. Only three percent of Fortune 500 companies have female CEOs. Researchers say that the percentage of women in the executive suites has been growing for decades, but in the past five years that growth has stalled.

So if women are now fifty percent of the workforce, why aren’t more women in charge?

Problem? What Problem?

The truth is that the general populace thinks women are already leading across all sectors of the economy. “That’s what Deborah Rhode, a scholar at Stanford, wrote of this phenomenon about a decade ago, and it’s still true,” says women’s advocate Marie C. Wilson.

Wilson is a co-creator of Take Our Daughters and Sons to Work Day® and founder and president of the White House Project, a national nonpartisan nonprofit that aims to advance women’s leadership in all communities and sectors. The problem, she explained, is that if people think women have already reached parity, the political will doesn’t exist to continue fighting for change. “Even though the majority of Americans are comfortable with women leading in all sectors, women’s leadership numbers are static at an average of eighteen percent across all ten examined sectors,” Wilson says. “When we have actually gotten small groups of CEOs together and interviewed them about why there are not more women leading, they will say, ‘I’m not comfortable—I’m just not comfortable.’ Some of that is because there are so few women, they think they’re going to say the wrong thing.” She suggests that men may be hesitant to give women direct feedback for fear of retaliatory lawsuits. And there just aren’t enough women leading to fundamentally change the dynamic.

Wilson says that “the magic number seems to be thirty-three percent. If you have one-third women, like you now have on the Supreme Court, it starts to not be about gender, it starts to be about what each of us is talking about. Until you have one-third you are still looked at through a gender lens.”

None of this comes as a surprise to women themselves. As columnist Lisa Belkin noted in a recent New York Times Magazine article, “Telling women they have reached parity is like telling an unemployed worker the recession is over. It isn’t true until it feels true.” Most women can tell you from personal experience that they’ve been paid less than men for the same work.

Researchers agree that a lot of the gender wage gap is explainable. Women take time off to have children, so their careers are interrupted and they’re not putting in the same number of hours. Women are the caregivers—they’re more likely to be the ones taking care of the kids, their aging parents, and their extended family. They also do the majority of housework even when they’re the primary breadwinners. Men will choose higher-paying occupations and women will choose more portable (and lower-paying) occupations that allow them to move with a higher-earning spouse. So conventional wisdom says women don’t commit as strongly to the labor market, and as a result, they don’t earn as much over the course of a lifetime.

But women’s choices don’t explain everything. “What you find is that when you pull out all of those factors, you still have about forty percent of the wage gap—9.2 cents—unexplained,” says Ariane Hegewisch, a study director at the Institute for Women’s Policy Research.

Subconscious Bias

The sad fact is that both men and women are more likely to consider men to be valuable employees. Researchers referred to one experiment in particular that’s been repeated in many different places. Ilene H. Lang, a former tech CEO now at the helm of Catalyst, a leading research organization that studies women in the workforce, summed up the findings this way: “Basically, if you take resumes and strip them of names and all gender information, then take the exact same resumes and put a man’s name on some with links to a man, and put a woman’s name on others with links to a woman, and send them out, hiring managers say that the women are unqualified and the men are terrific candidates. Men get the promotion or job and the women do not. Once you attach a gender link or a gender label, it gets devalued if it’s female. This happens over and over again, and it is not because people are intentionally biased or intentionally sexist, but they do not see potential and leadership in women, particularly nonwhite women.”

What was really shocking to me was the fact that women were as likely as men to ascribe leadership qualities to men, and dismiss equally qualified women.

Brian Nosek is the director of Project Implicit, a collaboration of scientists at Harvard, the University of Washington, and the University of Virginia. The project uses an online word association test to gauge subconscious bias. For instance, the test measures how quickly you pair words such as male and career. (The test is on the Web, and anyone can take it: https://implicit.harvard.edu.) When I took it I found that—even though I was writing this book—I, too, subconsciously associate males with career and females with family.

Nosek says these subconscious beliefs could manifest themselves in a variety of ways. For example, “[a manager] may be less likely to ask a female staff member to take a job that requires travel, whereas the same thought might not occur to a manager with a male staffer.” And, Nosek points out, this can happen whether the manager is a man or a woman.

When I ask how this might have an impact on my quest for a raise, Nosek says, “The way in which this implicit stereotype might manifest is just a general feeling of not belonging, an uncertainty that this is something I am, or can do . . . whether it’s appropriate to even ask, whereas it may not occur to a man in the same situation to even think about whether it’s appropriate or not. He might think, ‘I’ve been working here three years—time for a raise, damn it!’”

I ask Catalyst President and CEO Ilene H. Lang why women just aren’t seen as leaders. One of the reasons, she says, is that bias is perpetuated by the workplace itself. Her organization has studied how employees are chosen in companies that have leadership-development programs. “Most companies have competency-based models . . . They start out by saying, ‘Who’s successful in our company? What do those successful leaders in our company look like?’” Lang tells me. The companies then design their program for screening high-potential individuals around those key attributes. But because subconscious bias plays its part, the companies end up institutionalizing a preference for men. “The performance-management system will say ‘this is how we spot the up-and-coming talent; these are the things you have to be good at,’ and, well, when you look at most of those characteristics what you find is that of the top ten, six or seven reflect characteristics of the current leadership, which is most often male,” she says.

Like many of us, Tina Brown sees the institutionalized preference for men in action all the time. “You discover with a sort of incredulity that men don’t even picture a woman in a job.” She offers a recent example in which she was talking to a television executive about staffing changes at his ­organization: “I asked, ‘Who are you thinking of bringing in to be the overall boss of the situation?’ And he looked around the room, and he said, ‘Well, I was thinking about maybe somebody like—’ and he named a guy who was a complete mid-level player, in my judgment. I was incredulous. I’m thinking, ‘Wait a minute. Within this organization that we’re discussing, I could think of three brilliant women who could easily do that job. They’re not even on the drawing board. He’s thinking about going outside to a mid-level man who’s had a lot of corporate buzz and he’s ignoring the three women in the company who I know for a fact are far superior.’”

Behind the Starting Line

What surprised me most was the news that most women, even if they get their well-deserved raise, won’t ever close the wage gap. Even if women get promotions and raises at the same rate as men, if in their first job they were placed at a lower position and salary than their male colleagues, the same promotion and compensation increase rates will not close the gap. Ilene H. Lang points to a recent Catalyst study of female and male MBA graduates. “Women are pegged at a lower level and lower salary from the very first job out of their MBA program if they start at entry-level. If they are hired at a mid-career level, women and men fare pretty much the same, and they track the same afterward. But somehow, at that entry level, men are seen as much more promising and much more valuable, just because they’re men. More women take a hit, just because they’re women.” So that’s hidden bias in action, and where the gender wage gap begins to grow. Says Lang: “The metaphor I use is, imagine that there’s a big race and your daughter or your granddaughter or your sister—whoever it is—is really good at track and field and she’s training, and she trains with the best of them. She goes to the start line, and you look up and she’s not on the start line. She’s 100 feet back. Would you accept this? So that’s the challenge: women are starting out behind the start line. And they don’t catch up.”

But Aren’t Women Good for Business?

These gender disparities exist despite studies that suggest having more women in the top spots boosts the bottom line. That’s why the European telecommunications giant Deutsche Telekom mandates that one-third of its top jobs be filled by women. The company’s CEO said in a statement, “Taking on more women in management positions is not about the enforcement of misconstrued egalitarianism; having more women at the top will simply help us operate better.”

A study by the University of British Columbia’s Sauder School of Business found that female CEOs and female company directors tend to pay less in corporate takeovers, creating less debt and saving their shareholders money. Research shows that when more women are on the board of directors, companies are less likely to pay those outrageous compensations we’ve heard so much about on the news. That’s why Norway put a law on the books requiring that at least forty percent of the boards of directors of public companies be female.

Much of the research about gender and performance, however, is still under debate. Academics who challenge the current findings ask, “If companies that hire more women do better, how do we really know what role women play in that success? Are companies that seek out divergent perspectives simply more innovative and therefore make more money?”

Curiously, two men I interviewed—both of them tremendously successful captains of industry—argued that there’s no substantial difference between male and female executives at the very top. Both Jack Welch and Donald Trump argue that the best corporate leaders are gender-neutral.

***

“When you get a good woman leader, she is every bit as good as a man . . . good leaders are gender-neutral.”—Jack Welch

***

In his twenty years as CEO of General Electric, the parent company of NBC, Jack Welch was credited with turning that company into one of America’s largest and most valuable. His management skills are legendary, and earned him a reputation as one of America’s toughest bosses. If his managers weren’t producing, they no longer had a job.

I present Welch with the theory I’d heard from other ­interviewees, that executives love hiring women because women work harder and aren’t always asking for things like bigger offices and more money, and they don’t spend a lot of time drawing attention to themselves and self-promoting. Does he agree?

Welch takes the contrarian point of view: “I think the distinction in many ways is a phony distinction. A players, really great managers and leaders, are almost gender-neutral. When you get a good woman leader, she is every bit as good as a man and has many of the same characteristics. One thing I would say is that certain industries are much more amenable to women leaders and they all will be eventually . . . But good leaders are gender-neutral.”

Welch believes that truly great executives don’t even have to take their gender into consideration. “They’re comfortable with their gender, male or female. They’re not going to mask one or the other,” he says.

Or could it be that truly great female executives navigate gender differences so instinctively and effectively that the men don’t notice?

Donald Trump is another American business legend. Chairman and president of the Trump Organization, his real estate development firm, as well as the founder of Trump Entertainment Resorts, Trump is also the tremendously popular host and executive producer of the NBC reality show The Apprentice.

So, does Trump agree with the theory that women executives work harder than men? Trump says that twenty years ago one could make that argument, but not today: “Some of the best people I’ve ever hired were women,” he says. He put a woman in charge of the construction of Trump Tower, as well as the construction of the Grand Hyatt Hotel in New York, at a time when women in the construction field probably felt they had to try harder in order to prove themselves, he tells me.

“Now I think twenty years ago there was a big difference. There was a theory that women had an inferiority complex when it came to the workplace, right?” Trump says. But that theory doesn’t necessarily hold true anymore, because “now when they’re really good, they know they’re really good.”

Could it be that everyone who works for Trump is equally aggressive simply because he hires aggressive people?

“If they’re stars I generally find they’re aggressive and it doesn’t matter whether they’re women or men. I hire people who are A types and once they reach a certain level of success, the way they will negotiate with you or talk to you becomes very much the same.”

So what makes them successful? What breaks the mold?

Trump says simply, “They have to have drive. Look, you have to start off with the brain. If you don’t have the brainpower, the game is over. So let’s assume we’re dealing with all intelligent people. The one thing that I’ve seen that separates the really successful people from the people that don’t quite get there is the drive. It’s that never-ending drive. I went to the Wharton School of Finance, that’s the best [business] school, and we had the smartest guys there. I can tell you there were guys in my class who were really smart who never made it because they didn’t have the drive.”

While I certainly agree with both Welch and Trump that women are equally capable, I have to believe that women bring different abilities and sensibilities to their work, and in many cases that works to their advantage, and to their companies’ advantage. Gender research is ongoing, but anecdotal evidence is a powerful thing. All the other women—and men—I spoke with pointed to the fact that women are simply more collaborative.

***

“Give me a man and a woman of the same talent, and I will take the woman every single time.” —Donny Deutsch

***

“Surrounding myself with women is a real key to my success,” Donny Deutsch tells me. Of course he said that! If you’ve seen Deutsch on Morning Joe, you know that we have an ongoing on-air joke about his attitude toward women. He even bought me a pair of $800 shoes to “buy back” my favor after insulting me on air with sarcastic remarks that some regarded as borderline misogynistic. But Deutsch has valuable contributions to make to this conversation. The chairman of a multibillion-dollar advertising agency, he has big money to match his big personality and fancy wardrobe. The man thinks big, and he explains how I can too.

“Give me a man and a woman of the same talent, and I will take the woman every single time,” he says.

Why? He tells me to take a look at advertising: “If you watch little girls in a Saturday morning TV commercial for a Barbie, game, or anything, it’s always the same: it’s three or four girls sitting around a kitchen table playing together collaboratively—that’s the commercial. If you watch a commercial for a little boys’ game or toy, at the end one boy always raises his fists: ‘I won!’ I think in many ways senior women executives are superior in that for them it’s not a zero-sum game. They want to work collaboratively, they want to support, they want to be part of the team. It’s not as much how big is my paycheck, how big is my office . . .”

His is a mixed message: on one hand, Deutsch says, yes women may want to be liked, and yes, they do the invisible jobs; that’s why he likes women, that’s why they are valuable employees. But it is the next words out of his mouth that explain why women so often end up with much of the work and little of the glory: “What I have also found is that—once again, this is not a rule either, there are exceptions to it—but for that very reason sometimes men have made better CEOs because that charge-the-hill aggression, that ‘what’s in it for me,’ the very thing that makes it harder to manage them is what makes them better in the top spot.”

I tell Deutsch that there are feminists who are not going to like what he says.

“I’m the ultimate feminist,” he fires back. “Eight out of my ten senior partners are women. This is a company I built; the CEO is a woman, the CFO is a woman . . . I’m just saying that some of the time the things that make women more successful in the most senior positions can also work against them.”

Although I don’t like hearing it, I appreciate Deutsch’s honesty. And he’s certainly right: women need to get better at charging the hill. I hear essentially the same message from everyone I speak with. Deutsch is simply being generous enough to tell the truth: either we own our value and get to the top, or we can work hard and let the men take the credit.

Most everyone also agreed that women just work harder. Certainly I was working as hard as my cohost, and harder than all the other men around me, though I was getting nowhere.

“It’s the Fred Astaire–Ginger Rogers thing,” Ilene H. Lang says after I recount my story. “Women do the same steps as men, but they do them backwards and in high heels. That’s what women have to go through to show that they’re as good as men. They have to work harder, they take much longer to be promoted, and they have to prove themselves over and over again.”

***

“I always felt like I had to be so much better, and in a way that did me a favor.”—Susie Essman

***

My friend and frequent Morning Joe guest Susie Essman may be better known as Susie Green, the foul-mouthed ball-breaking character she plays on the critically acclaimed HBO series Curb Your Enthusiasm. But Essman isn’t anything like her alter ego Green, who tells her husband to go F himself if she doesn’t get what she wants; the real Essman says that despite her success, she is nagged by the feeling that she has to keep proving herself.

Essman has spent most of her career as a stand-up comic. “Talk about a boys’ club!” she says of the 1980s New York City comedy circuit. Essman says because the clubs hired mostly men, women had a hard time getting on stage at all, let alone at a decent hour. Women, she says, were ­often relegated to performing in the wee hours of the ­morning.

“I always felt like I had to be so much better, and in a way that did me a favor,” Essman tells me. “Instead of saying, ‘Oh, they’re not going to give me a good spot in the clubs because I’m a female,’ I was going to be so good they couldn’t deny me.

“Was it fair? No. But life isn’t fair,” Essman says. “I remember that my dad, who was a physician, told me, ‘Whenever you go to the doctor, go to a female doctor because they have to work so much harder to get where they are that they’re probably better.’”

My favorite senator, Claire McCaskill of Missouri, has spent decades proving herself in the male-dominated world of American politics. When I ask which areas of the economy could benefit from a greater number of women, she tells me, “It is my observation that the women who have done well have been hyperprepared. Being prepared means completely understanding what you’re doing. I’ve always had the feeling someone is going to tap me on the shoulder and say, ‘What are you doing here?’ So I wanted to be prepared when they did; I wanted to know the answer. And if there’s anything that the Wall Street meltdown showed us, it’s that a lot of people were engaging in complex financial interactions that they didn’t completely understand. My observation is, perhaps if there were more women on board saying, ‘Wait a minute, are we sure we understand what this actually is?’, then maybe it might have slowed down the train.”

There’s also the feeling that women, especially when they’re in the minority, offer fresh perspective. As I interviewed highly successful women in finance and government, I began to wonder if being in the minority might sometimes work to their advantage.

That’s often the case on Morning Joe. On days when I’m outnumbered by men, when, for example, Donny Deutsch, Dylan Ratigan, and Lawrence O’Donnell get on a testosterone-fueled roll, I’m the one to say, “Hold on, big boys.”

The absence of women in the top spots on Wall Street was blatantly obvious at the height of the financial crisis. If you turned on the television news in the middle of it all, you’ll probably recall that iconic scene of the seven heads of the biggest banks hauled before Congress. One couldn’t help but notice the total lack of diversity in that line-up.

Some behavioral economists believe there are biological reasons men make crazy bets. Joe Herbert, a neuroscientist at Cambridge University who studied the effects of testosterone on stock traders, told New York magazine, “The banking crisis was caused by doing what no society ever allows, permitting young males to behave in an unregulated way. Anyone who studied neurobiology would have predicted disaster.”

Headlines such as New York magazine’s “What If Women Ran Wall Street?” and the Washington Post’s “In Banking Crisis, Guys Get the Blame, More Women Needed in Top Jobs, Critics Say” promoted the idea that we all might benefit from having more women in positions of power on Wall Street.

Would Wall Street have crumbled in 2008 if women were running the show? I ask both Brooksley Born, former head of the Commodity Futures Trading Commission, and Sheila Bair, current head of the Federal Deposit Insurance Corporation. Both are rarities in the world of government: they’ve held powerful positions overseeing the banking industry, they famously clashed with Wall Street during their tenure as financial regulators, and both are well-known for displaying political bravery in their (ultimately unsuccessful) attempts to warn the country of looming threats to the American economy. As head of the CFTC during the Clinton administration, Born was among the first to call for greater disclosure and regulation of the rapidly growing market in financial derivatives. As head of the FDIC, the government agency which regulates banks and insures depositors, Sheila Bair has been a prominent figure in the current economic meltdown and was also recognized for her early attempt to get the second Bush administration to address the imminent subprime mortgage crisis.

Neither is willing to categorize women as less likely to be risk takers. Both point to the fact that women in the finance world are outsiders, however, and to some degree that fact helped them bring a new perspective to bear on the industry’s problems.

Born says, “You know, I’ve read these studies about risk taking, but I don’t have the expertise to evaluate them. I do think that if you are a bit of an outsider, which certainly a woman in that position [as a government banking regulator] was then, and to some extent is now, you may not be blinded by the conventional wisdom, or the group-think, that is the views held by your peers. You obviously aren’t part of the club and therefore don’t have pressure to remain in everybody’s good graces in quite the same way. Maybe you can analyze things a little independently, and if you come to a different conclusion than the others, maybe you have the courage to express that conclusion.”

But the flip side of that coin is, if you’re an outsider, nobody’s taking you seriously. Born was trained as a lawyer, not a banker, and she acknowledges that that played a role in her inability to force change: “I was not from Wall Street, which many of them were. And in fact, many of them were from the very highest ranks of Wall Street. And that, in and of itself, was a bit of a club, to which I did not belong . . . I also think that they all knew each other to some extent from their previous lives. They didn’t know me. I was in a small agency, much smaller than any of the other financial regulatory agencies. It had traditionally been a rather weak agency, a backwater if you will, that happened to oversee derivatives. And in fact, I think [the fact that the agency was a backwater] may have been the reason why, in that era, some women had been head of the CFTC, but no women had been chair of the SEC or of the Fed.”

The FDIC’s Sheila Bair echoes Born’s sentiments. “I do think that to the extent you let outsiders into the financial sector, that’s good, and it really is a club world . . . to the extent women have been outsiders, getting them in to take fresh looks and offer fresh perspectives is very helpful.” Did being the rare female working in finance put her at a disadvantage when she was calling for reform in the subprime mortgage market? “The media and others have focused on my gender,” she explains, “but I think just as relevant is that I am a Midwesterner, and I graduated from a public university, so I was never part of the East Coast, New York financial establishment. I think my frankness was unusual as was my outspokenness, particularly coming from the FDIC, which has historically taken a back seat among financial regulators. While some may have focused on my gender, I think my views may have been too much, too soon for others to adopt them.”

I argue that as outsiders in the world of high finance, women like Born and Bair can think more clearly and offer new insights. But in practice, if you’re an outsider and nobody’s taking your perspective seriously, your insights have no effect because nobody hears you. When I give her my reasoning, Born says, “Exactly. That’s the problem!”

Professor Hannah Riley Bowles studies gender in negotiation and leadership at Harvard University. She describes diversity as a double-edged sword: “Diverse teams often perform better than teams that are less diverse,” but only if people in the workplace actually value diversity and want to benefit from the fact that dissimilar people will bring alternate experiences and viewpoints to bear on their input. “If you’re in a context where people say things like ‘diversity doesn’t matter, we’re really all the same around here, we’re color blind, gender blind, or whatever,’ then people feel self-conscious about their differences. Then those differences become suppressed, and the potential for communication failures increase,” she says, citing research done by Robin Ely and David Thomas at Harvard Business School.

Born’s and Bair’s unheeded warnings about potentially cataclysmic banking practices could be considered communication failures of the greatest degree.

Obviously there are still major obstacles that keep women from achieving parity in the workplace. But were my own problems caused by gender bias? Have I been discriminated against in my career? Probably, somewhere along the line. But being angry and blaming men (and even high-level women) for holding me back isn’t constructive. I take full responsibility, and therefore full credit, for my career. My feeling is, I can only control what I can control. Instead of just being frustrated about the wage disparities that exist in my field, I’d rather think about what I can do within the parameters of my situation. When it came time to take drastic action to resolve my salary problem, I wanted to find ways to take matters into my own hands.