The Gender Pay Gap and Your Bank Account
I recently read about Carrie Gracie, a 30 year BBC reporter that quit her job as head of the China bureau to protest the pay inequity she was experiencing. “I simply want the BBC to abide by the law and value men and women equally,” Ms. Gracie wrote, citing the Equality Act 2010, which states that men and women doing equal work must receive equal pay.
While she did not reveal her salary, she said that of the four international news editors, the two men earned 50 percent more than the two women. Yes you read that right, 50% more. This is a staggering number over time.
Let’s look at an example of what 50% percent more a year looks like. Let’s say the woman is making $100,000 per year, the man at 50% more a year makes $150,000 per year. What’s the cost of that over time? In this case the man is making 50,000 more per year. Over a 5 year period, he makes $250,000 more than her, over 10 years, $500,000 more. Over a career span of 20 years, $1,000,000 more. This does not even take into account that pay raises and stock options are generally tied to existing salary. Or that the additional money could have been invested and grown over time. No wonder Carrie Gracie was angry. I’m angry just writing this article.
As someone who worked on Wall Street, I saw the gender pay gap inequity first hand. I fought my own fight for equality, I asked for more money and got it, thankfully not having to quit to get it. I admire her for taking that step, but most women are not in a position financially to quit in protest. So, what can we do as women to make sure we start on a more equal playing field?
If you are considering a position at a company-
NEGOTIATE: Research shows 57 percent of men negotiate their salaries compared to only 7 percent of women. And when women do negotiate salaries, they tend to ask for less money! For example, a study conducted in 2010 found that women ask for an average of 7,000 less than men when negotiating.
Let’s look at the cost of not negotiating using again the example of a $100,000 salary:
The man negotiates and gets $107,000, and the woman 100,000. What’s the cost of that? Some might say, “It’s only $7,000, is that really that much?” No, $7,000 is not, but similar to the example above, the $7,000 is compounded.
If you and your male counterpart who negotiated a higher amount are treated identically by the company—you are given the same raises and promotions—35 years later, you will have to work eight more years to be as wealthy as your male counterpart at retirement. Now, the question is: $7,000 may not seem like much at the time, but how about eight years of your life? It’s clear we women all need to startIt’s time to start negotiating!
BE CONFIDENT & EMPHASIZE COMMON GOALS: Know what you bring to the table and what your skill set is worth. As the AAUW’s annual report on the gender pay gap states, “Negotiation skills are especially tricky for women because some behaviors, like self-promotion, that work for men might backfire for women.” Using a communal orientation—it’s not about me, but it’s about what I can do for you—mitigates the negative reputational effects for women.
And for those of you already working at a company, it is never too late to try to be on equal footing.
TOOT YOUR OWN HORN: A Catalyst study of MBA grads found that, of those women who said they made their achievements known to others in the organization, 30% had greater compensation growth than peers who did not promote themselves. Some of the qualities found in these folks: “ensuring their manager was aware of their accomplishments, seeking feedback and credit as appropriate, and asking for a promotion when they felt it was deserved.”
Sounds easy enough but in reality this kind of self-promotion isn’t always easy for women. My suggestion is to be selective with not only who, but when you choose to do this. Focus on the facts and how they reflect on you rather than just being ‘self-congratulatory’. For example, “We just signed the largest client the firm has ever brought on”(give solid numbers as to how this is going to grow the revenue, etc for the firm). In addition to better compensation, this can also help you gain notice from people that may turn out to be important allies and help further advance your career down the road.
DISCUSS PAY WITH YOUR CO-WORKERS: We as women need to start discussing salaries. If you are looking for a raise or a promotion it helps to have an idea of how much to ask for. Pay transparency can level the playing field, when you know what others are being paid, it gives you a starting point for negotiation.
DO AWAY WITH IMPOSTER SYNDROME: It’s hard to be negotiating for a better position or higher salary if you’re convinced you’re not worthy of it, that you’re a fraud. This psychological phenomenon, known as imposter syndrome, reflects a belief that you’re an inadequate and incompetent failure despite evidence that indicates you’re skilled and quite successful.
It’s estimated that 70% of people have imposter syndrome with women being especially vulnerable to it. An internal survey done at Hewlett Packard found that women “applied for a promotion only when they believed they met 100 percent of the qualifications listed for the job. Men were happy to apply when they thought they could meet 60 percent of the job requirements.” So the next time you hesitate to ask for that promotion because you’re not sure you deserve it — remind yourself of the less-qualified dudes who are applying for it.
Sheryl Sandberg, the COO of Facebook was quoted as saying, “Every time I was called on in class, I was sure that I was about to embarrass myself. Every time I took a test, I was sure that it had gone badly. And every time I didn’t embarrass myself — or even excelled — I believed that I had fooled everyone yet again and that one day soon, the jig would be up …”
And it does not matter the industry, even Academy Award winners feel it. Kate Winslet, Jessica Chastain, Lupita Nyong’o and Jodie Foster have all said they have felt like imposters.
Just remember, you did not pull a fast on on anyone. Don’t doubt the intelligence of those who have promoted you, hired you, or offered you opportunities. They have not made a mistake, they have made deliberate choices based on your experience and potential. You really do deserve to be there. And you definitely deserve that promotion, or raise.
The Gender Pay Gap and Your Bank Account