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🤿 Sunday Deep Dive: The Wage Gap
The ‘Equal Pay for Equal Work’ movement started way back in the 1860s but here we are in 2022, still talking about the wage gap. Here’s why it still matters and what you need to know.
Where are we now?
Since those early women’s rights activists raised the question of equal pay, there have been legal wins. The Equal Pay Act of 1963 banned bosses from paying women less than men for jobs that required equal skill, effort, and responsibility, although pay could take into account merit and experience. The Lily Ledbetter Fair Pay Act of 2009 was named for a former Goodyear Tire & Rubber Co. plant manager who was awarded $3.3m in damages in an equal-pay lawsuit. The Act made it easier for women to sue employers for pay discrimination. And the Paycheck Fairness Act, which aims to ramp up enforcement of anti-discrimination laws, has passed in the House twice, although it is yet to succeed in the Senate.
There have been tangible wins too - sort of. In the 1960s, the average woman earned 60c on the dollar compared to the average man. In 2018, that figure is 82c - but only 62c for Black women and even less for American Indian and Pacific Islander women.
Isn’t that comparing apples to oranges?
Of course, when we talk about the average man and woman, we’re not comparing people doing the same job. Men are more likely to choose higher-paying careers. At the university level, women favor humanities, education, and social sciences while men lean towards STEM. In fact, women born in the ‘90s chose majors with potential earnings 9.5% lower than their male peers. Even when male and female students indicate similar priorities, males tend to pick more lucrative routes. For example, in a group of students who identified helping others as a career priority, men were more likely to enroll in pre-med majors while women were more likely to pursue nursing. And when female students do enroll in STEM, research shows that they are more likely than male students to respond to declining grades by switching majors.
These choices are related to perceptions about where men and women belong and are likely to succeed. They are influenced by everything from the gendered portrayal of different jobs in the media, to a lack of role models (how often do you get on a plane and hear a female pilot speaking?), to the types of toys we play with as children (pink toy mop and broom anyone?). Career choices also relate to something called the confidence gap. Women tend to rate their performance lower than men, even when they achieve identical results. In math specifically, men tend to significantly overestimate their abilities while women have a more realistic perception. This is despite the fact that, on average, girls outperform boys in math and science.
Women continue to be influenced by these perceptions later on in their careers as well. In healthcare, for example, male doctors favor specialties like plastic surgery and cardiology while females lean towards primary care. Other research shows that jobs can actually attract more credibility and higher salaries because they are considered masculine, and conversely, jobs that are perceived as high-skill, high-pay jobs are more likely to be allocated a ‘man’s job’ status.
Gender also impacts the specific roles we choose. In the US, 12% of employed men work part-time compared to 25% of employed women. In the UK, the difference is even bigger, with only 11% of working men working part-time compared to 40% of working women. Women are more willing to accept lower pay in return for flexibility and security while men are more likely to accept lower pay now for higher potential earnings growth in the future.
But even if we compare earnings in the same job we can still see evidence of inequality. The pay gap for primary care physicians is 18%. Male software developers earn 4% more than women. Even in nursing, a female-dominated career, men earn 2% more.
That might not sound like much, but if you think about the fact that inflation rates of 5.5% led to a cost of living crisis in the UK this January, you can understand the material difference the wage gap makes. The US, meanwhile, is facing its highest rate of inflation in 40 years at 7.5%, giving the wage gap an extra sting in its tail.
So what about legal?
There is some positive news. Recruiting company CareerBuilder ran a study tracking male-dominated careers from 2009 to 2017. They found that lawyer was the role with the most gains for women, with women now occupying 48% of roles.
The overall picture, however, is more negative. Here are some of the more disappointing stats:
The average weekly income for female lawyers is $1,878 while male lawyers earn $2,202.
In-house lawyers fare better with no discernible pay gap for senior and management counsel however, women acting as general counsel make ~$100k less than men.
Male partners earn on average $959k whereas female partners average $627k (yep, you read that right).
Just 22.7% of partners and 19% of equity partners are women.
Only 25.4% of lawyers serving as general counsel for Fortune 500 firms are women
And if we go all the way to the top, only 3 out of 9 Supreme Court justices are women.
This is despite the fact that women have outnumbered men in law schools for several years and the number of female students in top law schools has been steadily increasing.
Wages aside, how do women actually experience workplace discrimination?
According to a 2017 survey, around 40% of working women say they experience gender discrimination at work. Examples include micro-aggressions, being denied a promotion, and being treated as if they were incompetent. Micro-aggressions are subtle or overt acts or words that come across as minor but which, as part of the pattern, are hurtful and create an exclusionary environment. Things like mansplaining, sexist jokes, being labeled emotional and being spoken over more often than others can be pervasive and nearly impossible to punish. These issues often become deeply internalized for women and add to an unacceptable culture of norms that is felt broadly across different workplaces, and careers. And let’s be honest, we’ve all experienced this, or know someone who has.
A global survey of legal workers found that 1 in 3 women had been sexually harassed in the workplace. One study found that female lawyers of color are sometimes mistaken for janitors or administrators. And another study concluded that female court justices are interrupted far more often than male Supreme Court justices.
What about the (baby) elephant in the room?
Wage gap skeptics argue that women bring lower pay upon themselves by having children. It is true that mothers tend to take more parental leave than fathers and are more likely to work reduced hours. However, research finds no difference in the hours worked by male and female lawyers long-term. In fact, women bill an average of 24 minutes more per day than men.
Women who have children experience a “motherhood penalty” with mothers of 1-2 children earning 13-15% less than other women and mothers of 3+ children earning 18% less. Lawyers who take mat leave report that their careers are permanently impacted by the break. In 2019, 6 female lawyers sued their employer, Jones Day, for pregnancy and gender discrimination. One plaintiff claimed she returned from mat leave to a pay freeze, negative performance review, and limited opportunities.
Lost hours and experience may account for some of the motherhood penalty but discrimination certainly plays a role. While men are perceived as more reliable colleagues after becoming parents, the general perception is that motherhood makes you less committed or competent at work. In one study, researchers created fictitious job applications - some which referenced children and things like PTAs and some which didn’t. They found that the ‘childless applicants’ were twice as likely to be called for an interview.
What should firms do next?
In the UK, California, and some European countries, large companies are legally required to report their gender pay gap. Similar nationwide legislation could soon pass in the US. In Denmark, wage reporting has contributed to a 7% drop in the gender pay gap. And in the UK, firms affected by pay reporting rules have seen the gender wage gap shrink by almost a fifth.
Worryingly, it seems that loads of companies are phoning it in. One statistician estimates that 10% of UK companies report incorrect data. Nevertheless, for companies with a sincere interest in tackling inequality, pay data can help clarify what’s going on and why. It’s also useful to gather data on the gender of selection panels, job applicants, and candidates interviewed.
A few years back, the Ninth Circuit determined that salary history does not legitimize pay inequity. Eighteen states now have laws that forbid employers from inquiring about an applicant's salary history. And from May, New York City will join Colorado to become the second US jurisdiction that requires pay range to be listed on job postings - although several more jurisdictions have some kind of salary disclosure rules. These rules make it harder for hiring teams to apply conscious and unconscious gender biases when making applicants an offer.
Another way to encourage equality is to be transparent with staff about what their peers earn. Around 66% of companies discourage or prohibit discussion of salary information while around 17% practice transparency. Social media company Buffer is on the extreme end of the scale and publishes all employee salaries on their public website. Buffer claims that transparency helps them build trust with their staff but laws like these are controversial. Many companies fear transparency could create conflict amongst employees, invite bad PR and make it more expensive to hire and retain staff.
A report by the UK government concluded that flexible working was the key to ending the wage gap. Research suggests that high levels of work-schedule flexibility in countries like the Netherlands and Norway are a major contributor to their low gender wage gap. The legal profession has a reputation for being old-fashioned but firms can attract and retain talented female (and male) legal staff by allowing room for parenting. More than half of women say they would turn down a job that didn’t offer flexible working and 31% of women who take a career break to raise children say they are forced to do so because of inflexibility at work.
Flexibility doesn’t just mean flexible hours. Remote working and accommodating freelancers are also avenues for diversifying the workplace. Two-thirds of millennial women say being able to work remotely is a priority. The number of freelancing mothers grew by 80% between 2008 and 2019. To ignore the flexi-working trend is to miss out on all that female talent.
Help the fellas out
It might sound counterintuitive but firms that care about women should offer good parental leave to men. Paternity leave is associated with all sorts of positive outcomes - from happier marriages to better father-child bonds and better workplace satisfaction. It’s also invaluable to mums because it means co-parents can offer vital support in the post-partum phase meaning women are often able to get back to work more quickly. One study found that mothers’ income rose 7% for each month a father spent on parental leave.
Gender-neutral parental leave can also normalize taking time off to have kids and therefore undermine the motherhood stigma. You could even consider offering paid sabbaticals to long-serving staff who have no interest in becoming parents to counteract any bitterness they might feel about paid parental leave.
Don’t be Don Draper
One fed-up female lawyer put it well when she Tweeted, “Don’t ask the female counsel to fetch the coffee…Try to remember their names. Don’t make repetitive jokes about breasts or skirts.”
Sexist and belittling talk has no place in the workplace, even if framed as a joke. Asking women exclusively to take on unpaid work, like organizing the office Christmas party, is also not cool. Senior employees and men in general should take initiative and call out colleagues who act like they’re on an episode of Mad Men.
It’s not just able-bodied, straight, white women
In 2019, 170 companies sent an open letter to law firms complaining about the lack of diversity in their ranks. Clients like Facebook and HP threatened to drop Big Law firms if they didn’t make moves to become more inclusive. Racial minorities make up just 10% of partners at US firms. One UK law firm recently revealed that white partners earn 34% more than their peers. And less than 1% of attorneys have a reported disability.
People of color, immigrants, people with disabilities, and members of the LGBTQ+ community all deserve equal pay for equal work. Data gathering, mentorship, and inclusive work culture are just a few ways you can tackle workplace discrimination.
There’s still a long way to go but the future looks positive for women. The wage gap is narrower among younger workers (93c on the dollar for workers aged 25 to 34). The American Bar Association has set up a Gender Equity Task Force which aims to address issues like pay equity. And firms have started to take sexual harassment more seriously, with stricter consequences and clearer policies. The pandemic has also helped to normalize flexible working and made more people (female caregivers as well as others) consider the importance of life outside work. But we have to be patient. To quote the late women’s rights advocate and Supreme Court justice, Ruth Bader Ginsburg, “Real change, enduring change, happens one step at a time.”
➕ At Lawtrades, we’re proud that over 52% of our talent network are women. We’re committed to creating an inclusive, welcoming, and accepting talent network that prides itself on flexibility. If you’re thinking of joining the talent network, or would like to post a role, check us out.