Gender Pay Equality

I saw a short video clip this afternoon about this topic where Senator Elizabeth Warren was railing to her colleagues that the average pay gap between men and women in this country was such that women only made $.79 for every $1.00 that men made. Those reporting on this story then revealed that in her own office, the women on her staff only made $.71 for every $1.00 that the men on her staff make, so her own staff is even worse off than the national average – making her a hypocrite.

I won’t pretend that I agree with much of what Senator Warren says or what her political leanings are. But I think we need to be really careful when we throw around figures and statements such as the above. There is an old adage, “figures don’t lie, but liars figure.” This has been attributed to Mark Twain (Samuel Clemens). And I think that when discussing average salaries we leave out of our discussion many of the factors that go into determining both “averages” and the determination of an individual’s salary. In this particular case, I think that not only is Senator Warren leaving out these items, but so are the people who are pointing the finger at her.

Let me discuss the topic of “averages” first. Hypothetically, let’s say that Senator Warren has only four people on her staff. Three of them are lawyers-in-training (legislative assistants), and one is an “administrative assistant” (what in the old days we might have called a secretary, but now they do many other things). And let’s presume that she pays all her legislative assistants the same salary regardless of gender ($100K) and that the job of administrative assistant has a salary of $50K. Two of her legislative assistants are men and one is a woman, and the administrative assistant is a woman. In this rather simplified case, the “average salary” paid to the men in her office is $100K and the “average salary” paid to the women in her office is $75K. So one could then claim that she is only paying the women in her office $.75 for every dollar that she pays the men in her office! Statistically, that is true (i.e. figures don’t lie), but it ignores the different types of positions in the office and the fact that she is, in fact, paying “equal pay for equal work”. But that’s the way that averages work. And the claim by others that she is “being hypocritical” is a bit phony.

Secondly, let’s look at the “equal work” portion of this topic. Someone’s salary is based on a whole host of factors beyond their job title. A few of them are: education requirements (college degrees, etc.); amount of experience; willingness to go “above and beyond” when needed; and there are many others. One cannot simply look at two people having the same job title and require that they be paid the same without knowing all the other factors. If person A has been doing the job for 10 years and is really skilled in how they are doing the job, then they should qualify for more pay than person B who has just started and may often need help at the finer aspects of the position. Similarly, if person C is willing to work late or to travel when needed and person D always clocks out at 5pm every day and declines requests for travel, then it’s reasonable to pay person C more than person D as compensation for all the extra hours. And it’s often these types of “intangibles” that are at play that make the “equal pay for equal work” such a difficult thing to determine. If there is one person who values their life outside of work, e.g. their family and community, higher than their employer’s demands, then whether we like it or not they may be less valued by their employer than someone who puts their job over everything else.

Although I’m a man, I know that this was a conscious choice that I made early in my career. I saw many of my managers and compatriots taking home a large briefcase at the end of every day, knowing that they would be working several more hours that evening. But I decided that I would leave my work “at work” and spend my time at home with my family. I did this knowing that it might “count against me”. I was willing to work as hard as anyone else while I was working, but I prioritized my home life higher. I also chose to remain in the same community where my children had a consistent school system, we could attend the same church every week, make good friends, etc. I saw others who were willing to take job transfers to an office elsewhere in the country or even in another country and who would later return in a higher-level job than I had. But I deliberately chose my path. I also saw some of these same compatriots have marriages that failed or have health issues due to stress. I still think I chose wisely. And I applaud others, including many women, who make this same choice – to value their families and children, etc. over their “career”, even if it means that at the end of the day their monetary compensation may be less (as mine was). It’s not that I was poorly paid, indeed I was well compensated, but I knew that there were others who “passed me by” at least financially.

I worked for most of my working life for a large Fortune 500 company that had a pretty “formulaic” salary schedule. (I’m going to give a few details here – they may no longer be true and I’m only giving an overview, so I might not have every figure correct, but I want to give a general idea only.) Each salary grade was about “50% wide”, i.e. if the minimum salary in that grade was X then the maximum in that grade was 1.5X. Also, there was about a 10% variation from one grade to the next, i.e. if the minimum salary in one grade was X, then the minimum salary in the next higher grade was 1.1X. Finally, when annual raises were given, the raise applied to any individual depended on where in the range a person’s salary was, so, for example, if the average raise was 3%, then the people in the bottom third of the range might get 4% (to take them close to the middle), the people in the middle third would get the average 3%, and the people in the upper third of the range would only get 2% (so they wouldn’t be constantly bumping up against the upper limit of that range). Thus, for annual raises, it didn’t matter what your gender was, everyone had the same formula applied to them.

However, there was more involved than just annual raises. There were two ways that you could give “pay for performance” that was beyond this formula. One was that one could be recognized for outstanding work and get a “bonus” in addition to the annual raise. But this was not included in your base salary and so didn’t move you up in the range. The other was that you could get promoted, i.e. by meeting the job requirements of the next higher grade level you could be moved from one salary grade to the next. That also might mean that even if your pay remained the same that you might have moved from the upper third of grade X to the middle third of grade X+1 where you would then be eligible for a higher percentage of annual raise. To the best of my knowledge both bonuses and promotions were also awarded pretty equally to men and women. However, anyone like myself (and like many women) who chose to prioritize their non-work lives differently, might not be recognized as often for a bonus or promotion – which, over time, might have resulted in a certain amount of disparity if one looked at “averages”.

I’d like to end by telling a true story. There was an individual, a woman, who had started at the company as an “administrative assistant”. She had only an associate’s degree. But she wanted to better herself and was also going to school in the evenings working on a BS in Computer Science (since she was in the IT department that made sense). When she finished her degree she asked if she could move from her administrative assistant position to one of the more technical positions in the department for which she was now qualified by virtue of her degree. The company agreed, and moved her to an entry-level technical position in the same workgroup. At that point I became her supervisor. But the company initially just moved her from the non-exempt labor grades (which were numbered 1, 2, 3, 4, etc.) to the exempt labor grades (which were numbered 101, 102, 103, etc.) and placed her in grade 101 – an increase in overall salary, but not a large increase. However, the typical initial grade placement for new college graduates in the IT field was a 104 (and thus about a 30% higher salary given the 10% differential between grade levels). This was something that both she and I noticed and neither one of us felt that it was “fair.” Why should she accept a so much lower salary for the “same work” when she had been at the company for several years already and knew “the business” better than other recent college graduates that we were hiring.

I “went to bat” for her with upper management (and the HR department). After some initial period of stonewalling, I finally got someone to listen when I informed them that if she simply quit her job and reapplied for the same position that she had quit from that her initial salary would be the starting salary for that type of position (and ignoring her experience with the company) and that we would be offering a position of labor grade 104. That statement of the situation was pretty hard to dispute and so, albeit with some reluctance, the company agreed to advance her from grade 101 to 104 and with the associated pay increase. Needless to say, she was pleased!

I believe in equal pay for equal work. I have had the pleasure over my working life of working alongside of individuals of both sexes. And I have had the opportunity of having managers of both sexes as well. I have enjoyed my interactions with them. Nonetheless, I remain skeptical of many of the impassioned arguments that ignore all the factors that go into determining any one person’s salary as well as the specious arguments when one calculates “averages”. So, while I agree in principle with equal pay for equal work, I reject arguments that leave out all the things I’ve described above - including both Senator Warren’s vitriolic speeches as well as the claims of hypocrisy that have been leveled against her.