How 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.
Fight The Gender Wage Gap
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.
Slow Improvements In Female Wages
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.
The Gender Wage Gap Is Unfair Because 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.
Solution To Solving The Gender Wage 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.
Positives Of Parental Leave
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.
Related: How A High-Performing Employee Can Negotiate A Severance – This is my wife’s story after she got unfairly passed over for a promotion.
Fix The Gender Wage Gap
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.
If you’re unhappy with your employment situation, then I highly recommend you negotiate a severance. I was sick and tired of working more and getting paid less in 2012, so I negotiate a severance worth six years of living expenses.
Get Paid What You’re Worth
The experience was so transformational that I wrote a book about how to do the same thing called: How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye.
It’s the only book that teaches you how to negotiate a severance. In addition, it was recently updated and expanded thanks to tremendous reader feedback and successful case studies.
If you feel you’re not getting paid what you’re worth, start your own business online on the side! It used to cost a fortune and a lot of employees to start your business. Now you can start it for next to nothing with a hosting company like Bluehost for under $4/month and they’ll give you a free domain for a year to boot.
Brand yourself online, connect with like-minded people, find new consulting gigs, and potentially make a good amount of income online one day by selling your product or recommending other great products. Not a day goes by where I’m not thankful for starting Financial Samurai in 2009.
Here is my step-by-step guide on how to start your own website.
Updated for 2020 and beyond.
[…] at a lower pay and title than colleagues who kept working while she was away. Regarding finding a solution to the gender wage gap for equal pay for equal work, the fix I’ve come up with is to have equal paternity leave […]
[…] it’s the year 2015, all men and women are more or less equal. The gender wage gap for work performed is hardly noticeable now, and there are plenty of female breadwinners as more […]
Skylar Williams says
Thank you for your tip to start your own online business as a way to fight the gender pay gap. I think I am getting underpaid at my job and I think that is unfair but I’m not sure what to do about it. I wish there was some software that could help.
Hi. I’m not sure anyone is reading this as it is an old post. You did not mention the most likely cause and solution: There is no significant gender gap and thus no intervention is necessary.
The problem is that many studies compare apples and oranges. As you mentioned, someone has to make babies. You are therefore, for example, not comparing one working who shows up at 8 and leaves at 6 every day for 40 years with another of a different gender. You are comparing one such worker with another worker who takes a 6-month gap in work, then needs more flexible hours thereafter. I don’t remember if it was the Obama campaign or the Hilary campaign, but one of the Democrat campaigns raised this as an issue and when their staff was evaluated it was found that their women were paid much much less than your difference. They countered but the higher paying positions are mostly men and the lower paying positions are mostly women. That is kind of the point that there is no real systemic gender discrimination.
The obvious conclusion of course, is that if women were paid 80% of what men were paid _for exactly the same work_ EVERY smart manager would hire only women because you were saving 20% on your labor costs. You couldn’t hire a man. They cost too much. This doesn’t happen because the gender gap is an illusion.
I read a study at some time – and yes I acknowledge that social science studies largely start with a conclusion and the author finds data to back it up rather than how real science works where you start with data and the conclusion follows the data – where when apples were truly compared with apples women made something like 97% of what men made. The author could not find a discrete reason why and that was bothersome, but did find that there was little real discrimination.
My two cents.