Whether there’s a gender pay gap, what it is if there is, depends rather on what it is that we declare to be a gender pay gap – as Citigroup has just revealed. If we talk about people doing the same jobs then in a modern economy we’ve just about no pay gap at all at either the economy level or the individual firm one. Quite apart from anything else it’s illegal to discriminate on such terms. If we compare the pay of all men and all women then a gap opens up again – but that’s not a gender pay gap, that’s a parenthood one.
Many are leading today with the story that Citigroup has revealed a 29% gender pay gap in its workforce. This isn’t so – what it’s actually shown is that one method of measurement is so misleading we shouldn’t be using it.
So, on the basis of job for job comparison, what’s Citigroup’s gender pay gap?[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Around the same time, and under pressure from Arjuna Capital, Citigroup and several other big U.S. banks reported a different measure for U.S. employees. Instead of comparing the median pay for men and women, the banks “adjusted’’ the pay gap to account for job title, seniority, education and other factors that affect compensation. All the banks, including Citigroup, reported that after adjustments, there was almost no pay gap between men and women.[/perfectpullquote]
All is as it should be therefore. Except this doesn’t satisfy some. Thus today’s reveal:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Citigroup Inc. offered an uncharacteristically blunt assessment of the pay gap between men and women in its global workforce Wednesday, revealing that female employees earn 29 percent less than men do. The disclosure — a comparison of median total compensation — offers a more complete picture of pay, compared with the figures Citigroup and other big banks released last year under pressure from shareholders in the U.S. and regulators in the U.K. [/perfectpullquote]
No, it’s a less complete picture. We are in a market economy, we do expect janitors to make less than Senior VPs. So not adjusting for position or job is going to be misleading. At least it will be misleading if we’ve a gender difference in which jobs are done by whom. And, given that we’re humans, we do.
We find that women who have children take career breaks, perhaps view the greasy pole as less important once they’re mothers. Not all, of course, and we’d not want to assume that a mother would do so. But over the population this is what happens, on average, often enough to skew the number who climb said greasy pole and grasp the brass ring. That’s why there are fewer women in the top positions and getting the serious pay.
No, not because there’s any bias against women but because fewer women strive for it. And that’s it really, that’s the explanation of the gender pay gap that we see both societally and at the individual company level.
Women seem, on average, to greet the arrival of children a little differently than men do. In a mammalian, viviparous species with a long childhood – one that is sexually dimorphic – this is a surprise how? And not just what would we do about it but why would we want to do anything anyway?