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Does Women’s Pay Inequity Really Matter?

Jan Lee
Jan Lee | Wednesday May 28th, 2014 | 3 Comments

women_pay_Kheel_CenterPay inequity issues are on our minds a lot these days. Recent showdowns between fast-food corporations and workers who must rely on food stamps and social assistance to pay their bills have been garnering most of the attention this month. After all, if we’re not filling the shoes of the average restaurant worker, we’re most likely making a stop at the drive-thru window in the evening, or purchasing something over the counter that is staffed by minimum-wage workers. The incongruity can’t help but touch us.

So why do the recent stories of women’s pay inequity problems touch us the same way? The recent court battle by former Anheuser-Bush executive Francine Katz over alleged pay inequities was old news before it hit the Web. The fact that she lost the court case seems to give silent credence to the fact that it was an unnecessary battle. Yet hidden within the statements made about the pay structure of the company, readers can find evidence that there was more than one pay level and that Katz was determined by the management as being worthy of a pay grade almost one-fourth what her male predecessor had earned.

The story of Jill Abramson’s recent kafuffle at the New York Times is equally revealing. When an editor loses her footing, there’s no lack of experienced journalists to pounce on the story and–allegedly–get right to the facts. But even though Ken Auletta of the New Yorker was able to masterfully dig deep enough to explain New York Times Publisher Arthur O. Sulzberger’s assertions that the firing had nothing to do with pay inequity, a key question could still be asked that gets to the heart of why women question pay structures.

“While Sulzberger and Thompson improved her compensation somewhat, the fact that she pressed the issue at all with a lawyer worsened the relationship considerably,” says Auletta in his column on the issue.

Why would questions about pay be an issue, especially if, as Sulzberger acknowledged, benefits and compensation were tailored according to Times’ declining revenue? And wouldn’t a top editor use all the resources at hand, including a lawyer that knows state and federal laws? Wouldn’t Sulzberger?

Toppled editors are a dime a dozen in the newspaper business. But would a personality clash with an interviewee and the resulting fallout be enough to have the executive editor fired for cause in all circumstances?  While you ponder that question, it may be worth noting that “fired for cause” is significant here, because it releases the paper of certain contractual obligations–and makes it harder for her to sue.

In regard to Katz, some critics have suggested that her court loss against Anheuser-Busch means there may be more problems ahead for equal pay proponents.

“In a high profile case like this, when an individual loses, it certainly can discourage others from bringing an action,” said attorney Jerry Dobson in an interview with St. Louis, Missouri television station KSDK-TV. And while Dobson discounted whether her particular case would discourage every woman from stepping forward to ask about pay equity, KSDK reporters Leisa Zigman and Stephanie Diffin note an interesting, though important, point about this case:

“Legal analysts also tell us they believe Katz faced a unique challenge because of her high level of pay. They say it’s a challenge that generally does not come up in gender discrimination cases.”

Hmmm. Something like the challenges that a female editor may face when she discovers a discrepancy with that of her predecessor’s pay? As Auletta put it, “[she] thought she was gently pursuing her salary and pension case” with her boss.

The fact is, pay inequity isn’t a new subject. It may be new to the courts and legal venues for executives like Katz and Abramson, but it’s a topic that has been discussed, debated and deflocked for even longer than the topic of raising minimum wage rates to meet a wildly disproportionate cost of living.

“Pay secrecy fosters discrimination, and we should not tolerate it, not in federal contracting or anywhere else,” said President Barack Obama on April 8, which was recognized as Equal Pay Day for all members of the U.S. working force. Yet somehow, when women who have actually met their professional benchmark challenge the system, they may face “a unique challenge because of [the] high level of pay.”

It’s telling that analysts aren’t really sure how to explain women’s pay inequality problems. Explanations range from “suing is not a practical remedy” to “old stereotypes die hard.”

But the Center for American Progress gets closer, I think: “More than 40 percent of the gender wage gap is ‘unexplained,’ meaning that there is no obvious measurable reason for a difference in pay.” It can be overt discrimination or bias, say the authors, or as simple as the fact that the applicant is reluctant to put a job application on the line by asking for better, more equitable pay. And of course, in such circumstances, the hiring company may not do the right thing and offer more pay if it means it can save some money.

Either way, new studies are even more convincing that pay inequity exists. University of Miami researchers matched average men’s and women’s pay rates to grade-point averages and found that a woman with a flawless GPA is paid about the same as a man with a 2.0 GPA.

“The data indicate that overall high school GPA is significantly higher among women, but men have significantly higher annual earnings,” says the report summary.

But as researchers have pointed out previously, fixing the problem may not lie in understanding the statistics, but in a company’s effort to show it’s being transparent as well as fair in its hiring practices. And that, it seems, may take a bit more time and leadership for some companies to master.

Image credit: Pressers striking, between 1885-1980. Kheel Center


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  • fwhittlesey

    Every article that I read on this topic cites flawed research, shallow logic, and ignorance about employee compensation. This research focused on high school GPA which has nothing to do with what someone chooses for college, graduate school, and career. Or accomplishments. For this so-called “pay inequality” to happen, there would need to be a coordinated conspiracy of hundreds of thousands of pay-setters. As a compensation expert, I think someone would have let me in on the conspiracy at some point and I’ve heard nothing. The difference in pay between males and females, when analyzed by unbiased researchers, has been fully explained. Even Pres. Obama admitted that the number he cited in his SOTU speech was bogus, which it was.

    • J_N_Lee

      Thanks fwhittlesey for your candid comments. I don’t think conspiracy is what is being suggested by those who feel there is inequity, but rather mindset.

      I would love to see some of the data that suggests otherwise. Feel free to contact me through TriplePundit.

      Thanks again for your input on this.