Women struggle to close corporate America’s gender gap
US women typically earn 82 cents for every dollar earned by men, according to research by Pew © FT montage/Getty/Dreamstime
“The landmark Civil Rights Act of 1965 spawned an era of training ... in response to the barrage of discrimination suits,” a 2008 review of the programmes in the Academy of Management Learning and Education said. Most managers were given “a litany of do’s and don’ts and maybe a couple of case studies” during sessions that tended to last roughly four hours, the authors found.
Despite its perfunctory nature, the training was one factor that paved the way for a wave of women to enter higher-paid, male-dominated fields such as law, finance and business. Expanded access to college education and birth control also helped push the median wage for US women up from 65 per cent of men’s earnings in 1962 to 80 per cent in 2002, according to an analysis by Pew.
But that wage growth has since stalled, as has progress in making workplaces more balanced between men and women — even as corporations have made public commitments to build more diverse workforces.
US women typically earn 82 cents for every dollar earned by men, little changed from the 80 cents they earned 20 years ago, according to research by Pew. “The convergence we saw in the 1980s and 1990s has died away,” Rakesh Kochhar, a researcher at the think-tank said.
Activists say the US’s gender pay gap can only be fully closed by government-led structural changes, such as universal child care and legislation mandating equal pay. But studies published this week, coinciding with International Women’s Day, show how little progress corporate America has made on its promises to improve equality in male-dominated fields.
For instance, in finance, women remain highly concentrated in the lower levels of companies, and occupy fewer than 16 per cent of senior positions at alternative investment groups on average, a new study by Preqin found.
While diversity within these firms has shown slight improvement, most gains were within certain roles such as HR, administration and investor relations. Overall, investment and portfolio management teams had the fewest women, usually less than 20 per cent of the women at the firm, and half the number employed in marketing, Preqin found.
“We are starting to see the [diversity] numbers [from companies] become more transparent, which is allowing us to ask these questions like, is this all secretaries or are women starting to move up the corporate ladder,” said Megan Harris, one of the Preqin study’s authors. “There’s a societal narrative about what women are capable of.”
Overcoming that narrative can be challenging, according to Robert Raben, founder of the Washington-based Diverse Asset Managers Initiative and a former US assistant attorney-general. He pointed to a 2021 study by Morgan Stanley that found 70 per cent of white, male decision makers at major asset allocators such as pension funds and endowments believed having a woman or racially diverse talent handling investments meant sacrificing returns.
“I don’t have any patience anymore for people who pretend we have a pipeline problem,” Raben said. “You cannot bring women . . . into a firm if decision makers think that they are not as competent, and think that something is going to change.”
The problem persists even in industries with greater female participation, such as law. Firms hire more women out of law school than men, but many women are dropping out mid-career, leaving a smaller pool of senior female staff for promotion to partner, according to a study by data firm Leopard Solutions.
Last year, 27 per cent of partners at the top 200 US law firms were women. Even once other employees such as associates were taken into account, women accounted for 39 per cent of total headcount, Leopard found.
“There are still several roadblocks for women on the path to partnership that simply do not exist for their male counterparts. Women cite a lack of opportunity, unconscious bias, and lack of acknowledgment of their successes, to name a few,” the report said.
Even when women do manage to reach the top, companies often struggle to retain them — especially at the highest levels where they are least represented. A 2022 study by McKinsey found turnover among women executives was at an all-time high. Half of senior women who switched positions did so because they believed it was easier to advance their careers by leaving rather than climbing the corporate ladder at the company where they already worked, the consultancy found.
Activists say it is unlikely corporate America will be able to achieve gender parity without government intervention. Some places have tried a variety of approaches to keep women in the workforce, from universal pre-school in places such as New York City and Florida to paid family leave laws in 13 states including California and Virginia.
California passed a law in 2018 requiring public companies headquartered there to have at least three female directors, although it was overturned in court last year. Other jurisdictions, including Colorado and New York City, have begun requiring employers to advertise salary ranges for job openings in hopes of limiting discrimination.
Some business leaders insist they can achieve gender balance on their own. In 2015, software company Salesforce adjusted the pay of all of its employees to close its gender pay gap. But subsequent reviews found the gap reappears with changes in the labour market and the company, as it bought and integrated new units. The company raises salaries to close the gap each March.
“There is a moment where personally, I cannot believe that we are still doing this,” said Lori Castillo Martinez, Salesforce’s chief equality officer. “And then I think, it is really the systems that we need to break and redesign.”
Additional reporting by Joe Miller in New York
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