The Gender Wage Gap And A Solution To Income Inequality

Equality Between SexesHow would you feel making 25% less than your peers who do the same work at your same level? I’d be pissed and demand equal pay for equal work. Depending on which study you read, women earn only around 80 cents to the dollar compared to men. Unless you don’t have a mother, sister, daughter or wife, men need to pay close attention as well.

In order to solve the gender income inequality situation, we must first understand why there is income inequality between males and females. Here are some theories from various sources as to why:

1) Men are more aggressive at asking for raises and promotions.
2) More people in leadership roles are men because men have had a head start. There is a propensity for men to take care of their own.

3) Men are more interested in more lucrative fields such as finance, private equity, management consulting, and engineering of all types.

4) Society puts more pressure on men to be able to make enough and take care of a family.

5) Men can’t give birth.

From the chart above, you can see a steep increase in female wages as a percentage of men’s wages in the 1980′s as dual income households became more common. In 1985 for example, a female college graduate made roughly $62,000, while her male counterpart made $100,000. By 2005, the female worker made roughly $74,000, a healthy 19.3% increase, but still a 24% income discount to her male counterpart.

More recently, the Bureau of Labor Statistics reported that women earned 82.8% of the median weekly wage of men in the second quarter of 2010, the highest ever recorded. However, a 17.2% gap is still not good enough.

There might be a sinister evil empire out there that conspires against women to earn equal pay for equal work. There’s probably some truth to every single one of the five points above that affects pay equality. However, if we strip away all the conjectures, and focus only on fact, there is only one truth: men cannot give birth.

SOMEONE HAS TO GIVE BIRTH

One of my good friends graduated from Harvard business school in 2006 and just gave birth. Before having her first child, she swore to me that she’d be a career woman for life. She loved the challenges of the corporate world and she was good at negotiating deals. After taking three months off for maternity leave, she came  back for a week only to give her boss her two week notice!  Needless to say, her boss was not happy!

My friend lives in a paid off 4,500 square foot mansion in Hillsborough County, one of the richest counties in all of North America. She no longer wants to work because she doesn’t need to work. Her husband is a multi-millionaire. She has a beautiful baby girl at home she can’t stand staying away from. I’d quit too if I were her!

Someone has to give birth, and it so happens the role is placed on females. If you are a manager of a start-up, and have two equally qualified 30 year old candidates, one male, another female, you will consider the likelihood of each candidate’s ability to work the longest throughout the entire year, for as many years as possible.

Start-up life is cutthroat, and you cannot afford any employee to take off longer than 2 weeks at a time. What would you do as a manager? If you don’t have all hands on deck, the limited amount of money in venture funding will run out before you can generate a revenue and then everyone loses. At the margin, it may be logical to bake in an income that incorporates the likelihood chance of a candidate working for 12 months of the year. If the chances are for 10 months of work a year, then the pay might be offered at 83% of par.

Pay discrimination is wrong, but often it’s just business. Unfortunately, it is the woman who suffers from such unspoken calculations when hired. I find this a disturbing reality because I would never want my sister, daughter, wife or mother to not earn what their male counterparts earn for equal work. Hence, I’ve come up with a logical solution.

THE SOLUTION TO NARROWING THE GENDER INCOME INEQUALITY GAP

The solution to gender income equality is passing a law that requires all companies grant the same amount of parental leave for women AND men. If a woman gets three months maternity leave, then the father should also get three months paternity leave. We need to start eradicating the term maternity leave, and start using the words Parental Leave so that both the father, mother, partner can be treated equally.

Some of you might think it’s not fair that the father who doesn’t have to go through nine months of pregnancy and childbirth gets to take the same amount of time off. After all, maternity leave really is considered short-term disability my a majority of firms. However, a good husband will be there for the mother throughout the entire nine months, waiting on her hand and foot, attending classes, and caring for her every need. A good father will worry just as much, if not more so because he might feel helpless since he’s not carrying the child. A good father would love to spend as much time with his new born as well.

EVERYTHING IS ALIGNED

As a hiring manager, once you realize there’s now an equal chance both man and woman to be on Parental Leave, you have a lower propensity to discriminate on pay. You may of course secretly discriminate based on whatever other metrics you find justifiable, but at least one of the main points is now the same.

Regards,

Sam

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Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Jason@LiveRealNow says

    Parental leave won’t fix it because most men won’t take the entire allotmen

    A bigger indicator of statistical differences later in their respective careers is if there was maternity leave taken. It’s not technically a motherhood penalty, but rather, a recognition of the fact that missing 25% of your work year means you lose out on networking, promotion opportunities, cyclical raises, and pure face time. A chronically ill man has the same losses.

    It’s also a strong argument against working from home.

    • Janna says

      I agree that this won’t fix it. The employer was pissed because she quit, not because she took the parental leave. Whether her husband also takes parental leave or not, she still would have quit. And both parents won’t quit, obviously, because someone needs to make money. Historically, it has been the woman who stays home, but this has gradually been changing somewhat.

      Also, @Sam – are you sure you would take parental leave in a heartbeat? Most parental leave is unpaid, for one thing. But you do know that parental leave is not about long lunches and afternoon tennis matches, right? :) It’s about 24-hour care-taking of an infant, which is wonderful, but you won’t experience the type of accomplishments which keep you going at work. You may go days without a shower, smell of spit-up, be exhausted, but can’t for the life of you think of what you did that day!! A lot of men (and women) are very eager to get back to work just to get a break!!

  2. Sydney @ Untemplater says

    As a female it gets under my skin that women are stil paid that much less on average. I’ve openly asked for raises and promotions so my managers were aware that I was committed to working for the firm and wanted to be rewarded for my performance. It made a difference but I sti have no way to prove if my male counterparts are making more than me or not.

    I like your proposal on making companies grant parental leave. I was looking through my company handbook and for my firm it says 1 week of parental leave. That just doesn’t seem anywhere near long enough for fathers! The maternity leave length depends on how long you’ve been at the company and if more time is needed I believe that then falls under short term disability.

    It’s hard when anyone is out of the office for an extended time but I think both parents should get the same time off if possible. I know I’d want my DH to be able to be at home and help me and the baby if we had a child.

        • Money Infant says

          Yep its so, I took a month off when my daughter was born. My wife took the full 3 months, went back to work and…quit lol. Of course now its me who is staying home and her that is working, but I see your point about equality in every aspect. Funny how this has been an ongoing struggle for over 50 years now in the US. When will things become equal…I don’t know.

  3. Niki says

    I love the idea of parental leave. That could be one thing that helps equalize the playing field. I hope as my children enter the workforce things will be more evened out. That’s about 15 years away, but it does seem that we are slowly but surely moving in the right direction.

  4. Liquid Indepdendence says

    We’re also seeing more stay at home dads now so like the idea of just having ‘parental’ leave regardless of your gender. It’s only fair. “Nobody gets pregnant just so they can get time off.” Lol, so true.

  5. Dollar Disciple says

    Paternity leave is something our HR manager is pursuing right now. I hope she pulls it off since I will likely be using it in 2013 :)

    I think you are right, and that pregnancy is probably the single biggest reason for the gap.

  6. JP @ Novel Investor says

    If maternity leave is the primary reason for the pay difference, your solution would give companies a reason cut male salaries in response to the law. Just a guess, but some families and a lot of single men might have a problem parting with 25% of their income. Is taking a 25% pay cut over the life of a career worth having paternity leave?

  7. Laura Vanderkam says

    I’m kind of with Jason here — mothers aren’t required by law to take all the maternity leave available to them. If you want to come back to work after 2 weeks, you can. Having given birth three times, I can tell you I’m reasonably functional at 2-weeks after. It’s just that most women don’t want to. Some companies (not many but some) do offer a reasonable length of paternity leave. A lot of men don’t take all of it because…there’s the ambition issue. You want to be seen as a go-getter, and as a man, taking off 3 months to care for a child doesn’t send that signal. I don’t think that’s right, but it’s also business. I tend to think that a big chunk of the gap stems from women not being raised to think that they need to earn enough to support a family. Boys grow up thinking they need to support a wife and kids, even though most women work for pay. Women assume their husbands will work and that their income will be extra. Even though this is no longer the case for many families. Attitudes change slowly. A guy thinking about supporting his kids is going to negotiate hard for a raise. A woman who is told by society that she shouldn’t be away from her kids at all may not negotiate that hard. Of such things is the pay gap made.

    • Financial Samurai says

      Hi Laura, good to see you here. Didn’t realize you read my little slice of the sphere.

      I’ve asked around 10 male friends about parental leave for them, and they said 1-2 weeks MAX. Never heard of more.

      Let’s just level the parental leave playing field shall we?

  8. Newlyweds on a Budget says

    I love the concept of parental leave although most of the companies I’ve worked for DO offer paternity leave–I’m nbot sure if it’s three months though. I know my husband’s company gives him 3 months. and honestly during those first three months, i would love all the help I can get.

  9. Adam says

    Sigh. While sympathetic to your concerns, I think you’ve made a critical mistake that almost everyone (including me in the past) has made on this issue.

    If you have four minutes, I highly recommend this video, http://www.youtube.com/watch?v=EwogDPh-Sow by Prof Steven Horwitz called Do Women Earn Less than Men?

    In it he rebuts the myth that women earn 75% (or 82.8% as you cite) of what men do because of labor market discrimination. True, women do earn 75% of when men do AS A NATIONAL AVERAGE, but analyzing the data more closely, you finds that women make certain choices, such as degree selection, career selection, and raising children, which tend to result in lower wages than men. When you look at cross-gender comparisons of men and women with the same education background in the exact same career then by and large there is equal pay (about 98%).

    Now, of course, the choices women make (different majors, less well paid careers, leaving workforce for kids) could be the result of personal preferences or sexist cultural expectations for women’s work, but the relative influence of these two factors remains unclear. [Note Horwitz's follow up post here - http://bleedingheartlibertarians.com/2012/01/myths-about-my-views-on-the-myth-of-the-gender-wage-gap/ - which explains that discrimination or sexism may play a small part of the remaining differences, but that the casual connection between sexism and pay gap is mostly in capital market decisions (college and society) and not in the labor market (the workplace)]

    I second JP @ Novel Investor’s concern about lowering male pay just to achieve equality. It is not justice to cut someone down so that they are equal in size to someone else. If men are standing above women, the answer must always be to raise women up. Instead of tearing people down to the level of the disadvantaged, let us instead only try to lift the disadvantaged up.

    As noted in the video, perhaps we should decide to encourage women to enter the hard sciences and other high salary fields in greater numbers, perhaps we should try to change societal expectations so that men share more of the housework, etc. Or maybe society shouldn’t try to dictate to women what choices to make. If for non-discriminatory reasons they choose certain majors/careers or to spend time at home, etc, and this causes a pay gap, isn’t this an acceptable result?

    If the concern is that women receive equal pay for equal work – then women largely have that (remember for a woman and man with equal education, time in workforce, and same careers it is 98% same). But if the concern is to make women and men identical, then you should recognize that that is what you are trying to do. I would, however, prefer to expand both men and women’s choices on career and work at home, not force everyone to make identical choices. The “75% wage gap” is a statistic comparing apples to oranges. Not only does it tend to denigrate the work done at home (because no value is assigned to that work), but it implies the need for nonsensical policies.

    Further reading: http://www.swifteconomics.com/2009/09/21/lies-damned-lies-and-statistics-the-wage-gap/

    • Financial Samurai says

      You’re missing my point. The thesis is that because women are the one’s who have babies, removing themselves from the work force by 1-3 months decreases their pay for the year ceteris paribus. In order to equalize pay, men should also have the ability to take equal amount of parental leave, so the company/boss cannot discriminate as easily.

      • Adam says

        No, I didn’t miss your point. I just didn’t respond to it the way you would have liked. Largely my point was that nearly all of the gap is explained by factors that are not discrimination. Furthermore, only part of the gap is explained by leaving the workforce for childcare purposes (others parts are degree selection, etc). Thus, even if you force employers to give men the same ability to take leave, this does not mean that wages will equalize. At best it means that portion of the gap attributable to childcare duties will go away. And even that is a dubious assumption because it isn’t likely that men will take the leave at the same rate as women or for the same time, because of society’s expectations regarding who should stay home to do child reading.

        Lastly, I know that you think that its unfair for a boss to pay more to a man than a woman solely because she might leave the workforce to have a baby and I’d say you’d have a great point if that was true, but the data I was giving you states that today, men and women entering the workforce with have equal pay IF they make the same choices. That means a woman who chooses to stay in the workforce and does not have children will have the same salary as her male counterpoint. That means the difference in pay in that scenario is not based on gender discrimination, but rather on discrimination between two choices (to have a kid and then stay at home with them vs not doing so). Merely mandating that employers offer paid paternity leave is simply not going to drastically reorder societal expectations. Your proposal *might* make changing societal expectations easier but you are left with conundrum that you WILL have to do that (on both child rearing and other issues) to completely erase the wage gap. I am not saying that expectations shouldn’t be changing in society, but simply passing the parental leave law won’t make the magic employment fairy wave her wand and fix all causes of the gap.

        • Financial Samurai says

          OK, glad you didn’t miss my point.

          Mandating employers provide equal parental leave for fathers is the single biggest step to equaling the wage gap imo. I can’t think of anything else that will be as impactful, and as immediate. It will help eradicate the fear employers have of only women taking time off.

          Do you have a concise suggestion?

    • shanendoah says

      A non-parental leave note on the pay gap:
      It would be so nice to say “oh this isn’t a problem. women just choose lower paying careers, or less lucrative degrees.” Nice, neat,simple and a load of BS.
      The most recent studies account for those things. What they still show, over and over again, is that women coming out of the same college as her male counterparts, with the same degree, and the same grades, will be paid less to start. And as the years go by, and raises are given as percentages of pay, that gap widens.
      This is not to say degrees and self selecting aren’t part of it. The most nuanced report I know of is a text book (The Economics of Women, Men, and Work) and it shows that the self selection accounts for about half of the wage gap. 10% is accounted for by other factors (like women not negotiating and having babies), but that around 40% still can’t be explained by anything other than discrimination.
      The problem isn’t just about employers valuing women less. It is about us as a society and what we teach our daughters. There’s a wonderful book called “Women Don’t Ask” and it’s about how women don’t negotiate for ourselves. If you tell us we’re negotiating on someone else’s behalf, we are as good (or better) at it than men. But for ourselves- we’ve been told that good little girls don’t ask for things, that good little girls take what they are given and are happy with it. We are told that girls who ask are pushy, are nags, are bitches.
      Funnily enough, boys who ask are natural leaders, go getters, and ambitious.
      I am a flaming feminist- a flaming equal rights-ist really. And the pay gap can’t be solely explained away by degrees, job choice, or even having kids (though they all factor in to it in one way or another). The pay gap is can only be fully explained by accounting for the different ways we value women and men’s contributions to society.

      • Adam says

        2 comments:

        1) You said “The most recent studies account for those things. What they still show, over and over again, is that women coming out of the same college as her male counterparts, with the same degree, and the same grades, will be paid less to start. And as the years go by, and raises are given as percentages of pay, that gap widens.”

        Can you actually provide any of those studies. The professor I linked to has a wealth of information and the most recent studies I have read state the opposite of what you state: that women and men coming out of the same college with the same degree and grades have virtually identical pay at start today.

        Also, you mention the textbook says that 40 % of the gap is unexplained, but the info I referred to shows that less that 5 % cannot be explained by degree and self selection and the other factors you mentioned (negotiation, babies, etc). That is a huge discrepancy between those numbers!

        2) You said “It is about us as a society and what we teach our daughters.”

        That’s exactly what I am saying! I agree. But societal expectations are not the same thing as invidious discrimination by employers. And if expectation are the root cause, then logically the solutions rest mainly with changing what we teach our daughters and not in forcing employers to comply with new laws which don’t actually address the causes (at best the address a symptom).

        Also, you finished “The pay gap is can only be fully explained by accounting for the different ways we value womens’ and mens’ contributions to society.” True, but I would add that the problem is also partly that we devalue the work women provide when they raise children or stay at home. Since no monetary value is given to that work, a measure of wages cannot capture the value of that work. Personally, I think the work performed by mothers and homemakers is far more valuable that much of the work performed by those with high wages. Perhaps choosing to measure an individuals value to society solely based on the wages they earn isn’t the best way of measuring at all.

  10. JT says

    Paternity leave is interesting. It would give less incentive to hire younger workers, though, but it would balance a gender gap.

    As we all know age discrimination is very real due to health care costs, it may help counter the imbalance in costs that companies bear when hiring older workers. A 55-year old man may have more health costs. But that 25-year old might have just as much added cost from potential paternity leave. Interesting idea. Net-net, each time something like this solves a problem, I think you create even more problems. If we lack jobs, does adding more cost to employ a worker make sense?

  11. krantcents says

    I think it may help, but it won’t change people’s thinking in itself. As you pointed out, you have a chance to hire one person from a choice of a man or woman. You will decide against the woman not just because of paternal leave, but childcare issues. We discriminate all the time. I experienced age bias, but it wasn’t considered illegal. Companies did not consider my resume because I was too old (experienced) and expensive.
    Just changing the pay is a good first step, but changing the job may be a good second step. Things like flex hours, working from home or job sharing to accomodate people. It may even make people more effective.

  12. Matt says

    As a father, I love your solution. Only one problem I foresee… The proof of who the father is for the parental leave. Maybe require paternity tests for fathers who choose to take this leave? Regardless, I think this would be the biggest step towards income equality. Perhaps a senator or congressperson will read this post and come up with a bill.

  13. Mayor of Humbleville says

    Hello There,

    I would love it if hubby could stay home once we do have a child! I like this Parental leave idea, I’m not sure if employers would go for it though. It’s a very interesting thought. I’ve always been curious how they arrive at the statistics though. If you take the hourly wage into account, then draw that out to an annual salary, you’ll end up with different numbers.

    As an example, I worked at an office where many of the women were chronically out on FMLA because of health issues, but rarely were the men out (to be honest, I can’t recall a single case for men on FMLA). Once sick pay and vacation ran out, the women wouldn’t receive any pay. This fact alone would create a huge discrepancy between the annual income of the men and women.

    I don’t know how those are accounted for in these types of statistics. I agree though, if Men and Women are doing the exact same job at the exact same efficiency, they hourly pay should come out to the same.

    Humbly Yours,
    Humble Laura

    • Financial Samurai says

      Hi Laura,

      Statistics are quite misleading indeed. Given we are in the land of lawsuits, I cannot believe there is much discrepancy on a PER HOURLY wage for the same position. However, for the yearly income total, there might be.

  14. Wealth Artisan says

    Hey Sam,

    Great job on tackling such a controversial topic! I’d be curious to see what actually causes the disparity (if it is subconscious, or intentional). One thing that I always try to remind people is that employers will try to get you at the lowest price they think they can. Employees, in general, will never receive what they are worth in pay, as there would be no financial benefit to a company for hiring them.

    Obviously, there are inefficiencies in the system (such as the lazy guy who works at a mega corporation), but if an employer won’t gain from you financially, then they have little incentive to hire you. Maybe the employers bargain more aggressively with women as they feel less intimidated by them. Either way, it’s a shame. I certainly wouldn’t mind Paternal leave! Good read! :-)

    Thanks,
    Timothy

  15. shanendoah@The Dog Ate My Wallet says

    Here’s the basics- most women don’t get paid maternity leave. They do get up to 3 months leave protected by FMLA after bringing a child in to their family. Men get that exact same protection.
    What women do get that men don’t (usually) is short term disability that pays their salary at 50-66% for 6 weeks after giving birth (or 8 weeks if they have a C section). That’s right, women are considered disabled for 6-8 weeks after giving birth.
    I’m pretty certain that women in poverty stricken countries would be pretty surprised to learn that they are supposedly too disabled to work for 6 weeks after giving birth.
    But wording aside (though I would argue that labels do, in fact, matter) the fact that women are covered under the disability program after giving birth gives rise to two beliefs- that all women have paid maternity leave (nope- covered under the same leave a man would get if he had to have knee surgery), and that women get really long paid maternity leave. Again, the FMLA protection does not require leave be paid, it just requires the person still has a job. However, if you only have to use 33% of your PTO to get your full pay for 6 weeks, that leaves you with 66% of your PTO left to help cover the rest of that 3 months if you want to take it. This means that a women giving birth only needs 320 hours (8 weeks) of PTO to cover a full 12 weeks off at full pay.
    Paternity leave, while protected by FMLA exactly as maternity leave is, does not qualify for disability coverage, so if men want to get paid while on those 3 months of leave, they must have 480 hours (12 weeks) of PTO saved up to to receive their full pay for the entire time.
    I earn 208 hours of PTO every year (26 days- 1 day every 2 weeks). I can store up to 150% of that. If I’m at 150%, I don’t earn more PTO until I start using it. As a woman, that means that if I start at my max PTO and have 6 weeks of disability, I would be able to stay out 11 weeks and 4 working days and still get my full pay.
    If I’m a man, I run out of PTO after 8 weeks and 3 days.

    Now here’s the thing about using disability leave to claim we have paid maternity leave in this country- not only does it imply that women are disabled by giving birth, it also only applies to women who give birth. That means it discriminates against every father and mothers who choose to adopt.
    We call it maternity leave because we know it discriminates against fathers. But it’s not even maternity leave, because we don’t offer it to all mothers. We only offer it to those who are pregnant. In other words, this country has pregnancy leave.

    While I don’t think we need to go as far as the Scandinavian countries (where each parent gets something like 6 months completely paid, can be taken consecutively or concurrently) I agree that we need parental leave in this country. We need to stop calling women who give birth disabled and we need to stop discounting the contribution of parents who don’t give birth.

    I’m lucky in that my company offers 2 weeks child bonding leave, fully paid, without touching PTO for any new parent- no matter how they become a parent (also applies to foster parents when a new child enters their home).
    Now we all know 2 weeks probably isn’t enough to actually adjust to having a new child in the home, but at least it’s something.

    • Financial Samurai says

      Thanks for the clarification on disability, as you are exactly right. Guys get disability too, but of course, since men can’t have babies, they don’t qualify when the wife gives birth. I have no idea, but I am assuming 30 days is generally long enough for a woman to heal?

      Companies can just call disability leave, parental leave for fathers. Or just recategorize all together to just Parental Leave. Can’t it be that simple?

      • shanendoah says

        Companies don’t call it disability- the state does. That’s not something companies have any control over. From my understanding, it’s pretty universal- all states have the 6 weeks for a normal birth, 8 weeks for a c-section, but that is state law, not company policy.
        I should also say it’s not “pregnancy leave”, it’s giving birth leave- women who miscarry don’t get the same amount of leave. But birth mothers- women who give their babies up for adoption, do get the full 6-8 weeks. (Please note as a hopefully soon to be adoptive parent, I am grateful to birth mothers, and am not discounting the fact that they’ve given birth. But women’s bodies are made to be able to give birth and then to be able to care for the child starting pretty immidiately. Giving birth does not disable most women.)
        Calling giving birth a disability was done with women’s best interests at heart- it meant that it didn’t matter if employers offered a maternity benefit or not, women were guaranteed some pay and the protection that goes along with temporary disability. It was a gov’t work around from another era.
        As a society, we have progressed to a point where that work around should become a relic. We need equality in parental leave for all new parents.

        • Financial Samurai says

          Yes, it is quite interesting how a parent who adopts a newborn does not get the same parental leave as a mother who gives birth.

          I’d love to hear other women who’ve given birth chime in on how long it took them to recover, and what their thought process is on pay, time off, etc.

        • Adam says

          As an interesting side-note on the disability point. Did you know that minimum wage and maximum hour laws got their start in this country because states wanted to protect women? Yup, women because “women couldn’t fend for themselves” or “needed extra protection” states passed these laws. At first the Supreme Court struck these laws down because it was thought unjust to make these assumptions about women – the Court was saying that women were equal to men. Of course you can’t boil down about 40 years of legal history and case law to one or two crass points, but one of the principal changes made to the laws that made it so the court upheld them was to apply them to everyone (the other change was a sudden shift in the way the court did business during the New Deal). The relevance here is that laws which got started based on sexist views about needing to “protect” women sometimes do eventually do get expanded to cover everyone. So it wouldn’t surprise me at all if in the next 5 to 10 years paternity leave laws because standard.

        • shanendoah@The Dog Ate My Wallet says

          I also expect that in 5-10 years the US will start catching up with Europe when it comes to parental leave. And I know these changes take time, but it always seems silly to me when we use the excuse “but this is the way it’s always been” to prevent ourselves from fixing what is obvious discrimination.
          We’re getting there, as FMLA protects parental leave equally for mothers and fathers, regardless of giving birth or adopting. It’s the state and company policies that use short term disability to cover maternity leave, that are still behind.

      • shanendoah says

        Most women don’t have a kid every year. (Your not supposed to be able to get pregnant while lactating, though we’ve thrown off this natural balance by bottle feeding- which I’m not judging. It’s simply a matter of biology.)
        But it is frustrating, as someone who hopes to adopt, to know that I won’t be able to have three months off paid with my new child, even if my child is a newborn I bring home from the hospital because I don’t qualify for disability nor can I use my sick time left over from our old system (I’m actually going to be doing some push back on this) because I didn’t physically give birth. Giving birth does not change the demands a new infant places on it’s parents (both of them).
        I think men have a right to be annoyed- not that women get paid maternity leave (kind of), but that we don’t all have the same parental leave benefits.

  16. Mike Hunt says

    It may well vary by country. In my mgmt team in Asia, 80% are all women and women make up the top 3 salaries besides me (who is the boss of the business unit and gets paid the highest, natch). Women also get 8 weeks maternity leave and fathers get 3 days leave.

    Here it seems like women are better negotiators of salary. In many households women run the budgets and the finances. Somehow the men are content to sign over their paychecks and then go out drinking & playing cards. Funny that.

    -Mike

  17. BusyExecutiveMoneyBlog says

    Great topic…this is a tough one. I think it is changing but has a very long way to go. We need to get more women into the pipeline for the highest paying jobs. Women on the other hand, have to stick it out to get the experiential exposure. It starts with the men in charge…identify, and challenge women. Given equal coaching they will succeed. I personally have two female leaders that i highly compensate based on results and potential.

  18. Savvy Scot says

    You hit the nail on the head with this post. Although people would never admit to it – and legally in the UK can’t – the primary reason for hiring a man over a woman (assuming equal resumes) is the fear of the woman getting pregnant and not returning to work. Controversial topic indeed but good for you saying it how it is!

    I agree with other comments that fathers should get equal rights to paternity leave – the rule in itself is sexist; giving woman longer leave than men.

    • Financial Samurai says

      I hear the UK is incredible AWESOME for employees! 6 month maternity leave, 3 months heads up that you are going to get laid off to use the company resources, etc. Is this the case? Help clarify!

      thx

  19. Little House says

    I like the parental leave idea. It could also help with child care costs; mom takes off the first 3 months, dad takes off the following 3 months. Both parents could bond with the baby and not have to worry about day care options until the baby is 6 months old and hopefully can handle germs better. (Day care centers have germs, you know. ;) )

    As for the salary issue, it’s definitely unfair. Even if a woman quits after she has her baby, she was still doing the same job a man would have done in that time. If anything, why don’t companies pay their women the same, but require they pay a “rehire” fee if they decide to quit after having a child. That way the woman earned equal pay, but her manager is reimbursed a small fee for having to go through the hassle of rehiring for her position. Problem solved. Thoughts?

    • Financial Samurai says

      I think that’s a great idea alternating 3 months for the mom, 3 months for the father! It could cause a SERIOUS decline in production output, but hey, that’s equality!

      Taking 3 months off, to only come back and say “I quit” is kind of rough… implementing a reimbursement fee sounds fair if that happens. We have that when companies pay for our MBAs. Got to stay on for 1-2 years or else you must pay back.

  20. Denise @ The Single Saver says

    I very much agree. There are many reasons to advocate for fair treatment of all employees. However, don’t under estimate the role of #2 on your list, either. My company does offer parental leave but the good old boys network is still strong (as it is in most firms) and you can see it in the pay scale.

  21. bax says

    Every single one of my gen-x friends is out-earned by his wife. I think these stats are going to adjust hard as the big money earning boomers leave their positions.

    • Financial Samurai says

      That’s awesome! And I hope you are right! It would be great to get pay equality, and also lessen the burden of men to support the entire family. This could be the dawn of a great era for women and men!

  22. Jeff @ Sustainable Life Blog says

    I like the concept of family leave, but i’m still not sure that it would close the wage gap. Obviously, if each took off the same amount of time and did the same work, they should get paid the same, but what if one was a better performer (male or female) or had more experience? Should a wage gap exist in that situation?

    • Financial Samurai says

      Yes, a wage gap should exist if one employee is more qualified than another for sure.

      There will always be a discount or a premium. The point is to narrow it so that it statistically doesn’t really matter.

      Besides, I just want my 3 month parental leave too.

  23. Leigh says

    I LOVE this idea! I don’t necessarily know if I will have kids, but this would definitely make a huge difference.

    You know what would also be cool? If employers had to actually pay money for the parental leave to BOTH genders.

  24. Tie the Money Knot says

    Equality all around is a great concept. Our society is filled with biases of all sorts, and both women and men get shortchanged at one thing or another. Sometimes, this can cause a real impact on lives when totally unnecessary and preventable It’s good to have such discussions to bring topics in the open so that they can be looked at intellectually.

    I have heard negative things said about a guy who wanted to take paternity leave some years ago. Along the lines of it implying that he’s not a “real” man, not a true provider, a slacker on the job, etc. It left me thinking that the person suggesting those things was a complete tool. Anyway, I do believe that the guy wanting to take leave did in fact do it.

  25. Michelle says

    I’ve been thinking about this a lot lately. I work in a male dominated field (financial services) and while I don’t plan on having any children for around another decade, I do wonder how my work would react.

  26. Mike Hunt says

    Sam,

    I was thinking about your earlier post… more men are unemployed now but in this post it shows men are making more.

    So it means companies are shedding their higher salary people… so woman may make less but have better job security. Not a bad tradeoff…?

    -Mike

  27. Rayna says

    You should take a poll of how many fathers would take maternity leave to aide pregnant women. I’m curious to see how many would accept it.

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