Thursday, March 10, 2011

Why Men Make More Money than Women

We often hear statistics about how men and women doing the same jobs aren’t paid the same. I’ve heard that women make anywhere from 60% to 90% of what men make. I don't trust these figures because the people who quote them often have axes to grind, but I do believe that a gap exists. I don’t think this gap is likely to close completely any time soon.

The reason for this gap is usually attributed to sexism. I don’t know how much of a problem this is today but it definitely was a problem in the past. See a job posting from one of my father’s job searches back in the 1964. However, I think there is another reason why women doing the same job as men get paid less, on average.

I could have been paid much more in my career if I had devoted more energy to it. If I had worked more and spent less time with my wife and sons, my income would have been higher. I consistently made choices favouring a balanced life rather than devoting myself completely to my work. More than once I turned down a promotion that I knew would require more work and travel. I don’t regret these choices, but they did cost me money.

Just to simplify the discussion, let’s divide the world into two categories of people: (1) those who are driven and consistently sacrifice their personal lives for work, and (2) those who are balanced and consistently seek a rich personal life at the expense of workplace success.

I think most people belong to the balanced category, including me. There is little doubt that driven people make more money than balanced people, on average, even when they are in the same careers. In my limited experience, most driven people are men. I have met women who are driven, but they are significantly outnumbered by driven men.

It stands to reason that men will make more money than women, on average, because of the driven men messing up the averages. Quite frankly, I think women are smarter for more often choosing a balanced life over a life devoted solely to work, but the downside of this choice is a lower income.

I have nothing against driven people. They pay a lot of taxes and create jobs for the rest of us. But I’m happy to count myself among those who make less than they could make but have a rich personal life.

19 comments:

  1. Interesting article. I agree with you that work/life balance is a dominant factor in the amount of money a person makes. It will be interesting to see how the transition from Boomers to Gen-Ys are the majority of the workforce affects corporate productivity. Back to the wage gap, here is an interesting analysis on the issue in the US http://bit.ly/fCxSo2

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  2. I'm not sure what happened, but the following comment from Daniel Picard somehow disappeared:

    "Interesting article. I agree with you that work/life balance is a dominant factor in the amount of money a person makes. It will be interesting to see how the transition from Boomers to Gen-Ys are the majority of the workforce affects corporate productivity. Back to the wage gap, here is an interesting analysis on the issue in the US http://bit.ly/fCxSo2"

    @Daniel: That article says something similar to what I'm saying, but the article has much more detail and makes the point more aggressively.

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  3. I seem to recall seeing some studies that found women had the same, or even higher, salary within specified employment categories, after adjusting for education and other non-gender factors.

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  4. I am a female computer engineer...not a feminist but I do have my own preconceived notions (based on my experiences).

    But here is something that happened to me. I was a high achiever (read that to mean that I was one of those people who gave everything for their job.)

    I usually got an excelled on my reviews and the boss would tell me how wonderful I was and then I'd get a raise and that was that.

    When I got to be a manager I found out that all of the senior guys working for me made more than I did. Now I had a great deal more experience than them (5 years more) and frankly I added way more to the company bottom line. AND I was their MANAGER.

    But they all made more than me. Why? Because I was happy with a pat on the head and a excelled rating. I assumed that the money I got was comparable to others of my caliber. But because of the no talk about raises rule I never knew until I was a manager that I was naive. The guys as I found out, wanted to get the money and were not afraid to ask for it. And ask they did, often with outside offers in their hands, demanding big raises or other compensation. The women in my group never did that.

    There is a great deal of support in studies that have been done that a woman and a man who ask for a raise with the exact same words, the woman will be seen as ummm....overly aggressive (That b-word was used a lot). The man is seen in a positive light. It is borne out by my experience to be sure.

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  5. Good post, though I think we may see women going ahead of men as their domination in certain professions like medicine, teaching and law begin to assert themselves.

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  6. And do you think that there is something inherent about femininity that pushes them towards a more balanced lifestyle, or might women be discouraged from being driven by it being a harder lifestyle, or raised in a biased way?

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  7. @Larry: I've heard about such studies showing that women make more when enough factors are accounted for. As usual I'll remain skeptical until I actually read the details of the study.

    @Anonymous: I've heard of differences in negotiating skills as an explanation of the wage gap. I find that the majority of engineers just take what they are given. But among the minority who are effective at asking for more it could be that women are under-represented.

    @Canadian Investor: The trend is for women to start dominating certain fields, but this is by their numbers and not necessarily by their average earnings in those fields.

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  8. @Timmyson: I don't think I have much to add when it comes to speculating on why fewer women choose to sacrifice their personal lives for work.

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  9. I am a woman, but far from a feminist. I'm (mostly) a stay-at-home-mom, who works a little while her little one sleeps. I've run my own company for half a decade. But when I was working for another firm (accounting), I was definitely the kind of person who was happy with the pat on the head, and the nominal little raises I got. I was not the aggressive kind to ask for more money. I even had an offered raise reduced once by one of my bosses because he misunderstood what my new duties would be under the new arrangement - and I didn't complain. But I don't blame that on my gender, just my shy and retiring personality. I would guess that many women are the same, but that there are also bold women, and shy men, and the boldness or shyness of a person would have more to do with a person's earnings in most professions. Just my own guess.

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  10. @Jolayne: Sometimes it's about what you take rather than what is given to you. The question is how much gender bias there is among the shy vs. aggressive numbers.

    P.S. I find it interesting that so many women are careful to say that they are not feminists. I think this has to do with how feminism has changed. It's traditional roots were the desire for equality of opportunity. Modern feminism seems to have left equality of opportunity and seeks equality of outcome. These are very different things. I don't blame women for rejecting a desire for equality of outcome.

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  11. It really feels like you are missing the point here.

    You suggest that it isn't sexism but that really some people are more driven than others and they are usually men.

    Let's take a couple made up of a child bearer and their partner. By your definition, the child bearer is life balanced and therefore not dedicated. This leaves the other partner free to be dedicated and earn more.

    This describes most of our families. One partner will then always make more than the other.

    The child bearer is always a woman. So this whole economic system has women making less money, which isn't very fair.

    Is there a way we can change the economic system to stop punish women for having children?

    By trying to rephrase the issue as just some people being more dedicated than others, you are hiding the underlying issue and nothing will be done to resolve it.

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  12. @Aolis: If I understand you correctly, I don't think the world should change in the way you want it to. I've known women who have children and manage to maintain a strong dedication to work. Apart from taking maternity leave, they left their kids in daycare and worked long hours to build their careers. This isn't a choice I would make, but it's what they chose. No doubt these women who sacrificed their family lives made more money than women who chose to make work sacrifices by turning down promotions that require longer working hours or travel.

    The question then is whether women who put more effort into their careers should be paid more. I think the obvious answer is yes. I have a lot of respect for women who sacrifice money to have a better family life (I've made those choices myself), but I think it would be destructive if the government were to try to somehow legislate equal pay for women regardless of their dedication to their jobs.

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  13. @Aolis

    Women are not punihsed for having children. The family unit is the one to decide which parent (if either) will focus on raising the children, not government or employers. There are many examples where the wife is the one that continues to build their career after children and it is their partner that focuses on raising the children.

    Every situation is different and I don't think there is one answer that will fit everyone. It all comes down to individual decisions at certain points in time. You could only determine if there is a difference in pay if you compared a man and a woman that made exactly the same decisions, at exactly the same time in exactly the same scenarios. Unless these were held the same some men wouldn't be paid the same as other men.

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  14. I think you misunderstood what I was saying:

    "@Anonymous: I've heard of differences in negotiating skills as an explanation of the wage gap. I find that the majority of engineers just take what they are given. But among the minority who are effective at asking for more it could be that women are under-represented."

    It is not a difference in negotiating skills, it is a difference in how any negotiating is perceived. Women are perceived as aggressive *if* they ever ask for a increase. They know this at some level and don't negotiate in order to keep being well thought of.

    As an engineering manager, I can tell you that the engineers who reported to me did not just take what they were given. Maybe because I am a women they felt comfortable pushing the envelope.

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  15. @Anonymous: I understand that you were offering a reason why aggressiveness in men and women is perceived differently. I thought about this as a possible reason why women, on average, may choose to be less aggressive. This would then become part of the explanation of the wage gap.

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  16. @Michael
    I admit to be very lucky in Quebec with subsidized daycare. The reality is that for most people in the world, daycare is expensively out of reach.

    Day care has been an important goal of the Canadian Women's movement. It is helping to reduce the pay gap.

    @Daniel
    We can compare the average woman to the average man and see that they are coming out behind in average salary.

    You seem to be implying that women are free to choose either to stay home or to work. This has not been the case until very recently in Canada.

    It comes down to how you describe the issue. If you describe it as one of simply personal choice and unique circumstances then of course there is no problem.

    But if you describe the issue as society putting pressure on women, then you can start asking, "How can we change society to readjust this imbalance?" This seems more productive to me.

    For example, Daycare is more available now than ever before.

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  17. Good book on the subject.


    http://www.amazon.ca/Why-Earn-More-Warren-Farrell/dp/0814472109/ref=sr_1_30?ie=UTF8&qid=1300070064&sr=8-30

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  18. Your argument completely overlooks the norms and stereotypes that we have placed on women and men.

    Men who are aggressive are characterized as strong willed, work oriented, etc.

    While women that display the same traits are considered to be pushy feminists who have abandoned their family.

    There will continue to be a gap until we accept women as working equals in all senses.

    On a side note, our government has gone a long way to hurt the cause of working women buy killing the potential national daycare program.

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  19. @Anonymous: It's not so much that I overlooked potential reasons for the differences between men and women in their tendency to devote time and effort to their careers. Rather I just observe that there is a difference. You propose reasons for this difference. I haven't made up my mind why the difference exists.

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