Does it matter if women earn less than men?

You might think – with all the attention being paid to women in the workforce, and gender equality, and pay on merit – that the differences between the take-home pay of women and men who do the same jobs would have disappeared, right?

Wrong. Well, wrong in the USA between 1995 and 2000, according to the federal General Accounting Office. During that period, in seven of the ten industries that employ the most women, things got worse. I don't know about local survey data, but my impression is that the same situation exists in here New Zealand. Interesting question: Why?

It's not the no-brainer it seems. It turns out that in the USA, men and women earn about the same until age 33, which is when many university-educated, management-track women begin to raise families, according to Fortune Magazine's Anne Fisher (May 27, 2002). Once they have kids, women managers earn only two thirds as much as their male counterparts.

To reinforce that point, the Economic Policy Foundation ( compared the earnings of single unattached males and single unattached females, and discovered that the unattached females actually earned slightly more than the guys.

What's that mean? Dropping out of the workforce to have children costs women at least some of their future earning power. Is that the only reason women earn less? Probably not: Anne Fisher also suggests that women generally tend to be less aggressive when it comes to bargaining about pay increases, and more inclined to accept what is being offered. And then, of course, there's straight-out discrimination – some organisations and some industry sectors pay women less because … well, just because they pay them less.

What's the Q-NewZ point? If how much people get paid is a satisfier – if it affects how satisfied people feel about their jobs – then employers who want to, or need to, recruit or retain mid-career women should think about implementing human resource strategies that compensate them for their time out to have families; and find ways to reward excellent performance that doesn't depend on assertive workplace bargaining. You can't expect to have satisfied customers if you've got dissatisfied staff, and customer satisfaction is a good lead indicator of revenue growth and profitability. So gender equality is not just about being fair and ethical, boss, its also good business.

Which raises another interesting HR question: Just how important is pay as a satisfier? You'd think, watching teachers and others in the public sector conducting noisy protests about pay, that it would be number one. Wrong again! I don't know about teachers, but as a general case, survey after survey in all sorts of work environments show that when asked, people rate pay at about three or four in a list of things that influence their satisfaction.

To illustrate: In the same issue of Fortune, a survey showed that almost half of all workers aged 25 to 34 agreed that “feeling proud of your work is more important than getting a raise.” The effect wears off with age though. Only one in five workers aged 55 and over thinks pride in work outweighs a raise. But the point is made.

I don't recall ever seeing data about gender differences in employee satisfaction, but I'll bet that women name different things and rank them differently when asked what they most like and dislike about their work and workplaces. That's something to think about. Maybe comparing take-home pay when checking for gender inequalities is missing the point?

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