Today, I’m departing from my usual fare by presenting a snarky and controversial guest post by Mr. Moneybags, a personal finance blogger I’ve recently come across. I’d characterize his writing style as risque, highly edgy and different (I had to tone down his post somewhat, in order to run it here). For a much tamer look at the gender debate in finance, check out our posts: Managing Money: Men vs Women and Traditional Jobs For Men and Women. I now offer the floor to Mr. Moneybags.
Is there equality for women in the workforce? Sure, you can talk about equality all you want and acknowledge the plight of women and what they have gone through in the last century to achieve socio-economic parity, but the corporate world still seems to disagree.
Employment Discrimination & The Gender Wage Gap
In 2006, the United States Census Bureau determined that women earn an average income of $32,515 every year, while men bring home $42,261 worth of bacon -– that’s a difference of $9,746.
Over the average person’s work life (24 to 65 years old) of 41 years, this amounts to men making almost $400,000 more than the average woman. If you invest that same $9,746 every year growing at an annual compounded rate of return of 15%, that amounts to almost $26 million — the equivalent of 15 beach homes, 260 Porsches or 2.6 million Danielle Steel novels.
So, what is the reason that men make so much more money than women? Is it because men can lift heavy boxes and lug them across far distances? Or could it be because of that thing which requires a magical blue pill for optimal performance?
The purpose of this article is to find out why these compensation differences exist, and what women can do to close that earnings gap short of a sex change operation (a.k.a. Plan B). Let’s get started!
How To Break the Glass Ceiling: 13 Fortunate Women
Of all the companies in the mighty list of the USA’s largest 500 publicly traded companies known as the Fortune 500, only 13 companies (or 2.6%) have had female CEOs. Outside the Fortune 500 companies, the ratio is even lower at 1.5% of CEOs being women.
So, why is this the case even though women now receive about 6 out of every 10 college degrees, have earned more than 40% of MBA designations at top colleges and have performed better than their male counterparts in executive roles at many companies (according to some reports)?
Let’s take a closer look at some of the female CEOs of the top companies:
From left to right we have: Patricial Woertz (Archer Daniels Midland), Indra Nooyi (PepsiCo), Irene Rosenfeld (Kraft Foods), Ellen Kullman (DuPont) and Laura Sen (BJ’s Wholesale Club).
So, what do they all have in common? They all look like men.
And there’s your problem — instead of accentuating the wonderful aspects that makes a woman a woman, these ladies instead lopped off their beautiful tresses and donned pantsuits worthy of taking on Jon Travolta on the dance floor (Saturday Night Fever, anyone?).
And there’s your first tip: if you can’t beat ‘em, join ‘em! Want to make as much money as a man? Then look (work and play) like one!
Of course, many women won’t take kindly to such a proposition, so unless you are fine with changing your identity a la John Travolta in Face/Off then you may want to keep reading.
Do What You Love And The Money Will Follow? Don’t Think So.
In a study performed by some super economists at the University of Chicago, a few rather interesting facts were discerned about the reasons for the gender wage gap, one of them being this:
On average, women score slightly lower GPAs than men and take fewer finance courses.
What does this have to do with the wage gap? Remember those Wall Street jobs that were under scrutiny during the financial crisis? Think of that and everything you have ever heard in the news about the financial industry, and remember the ridiculous salaries and bonuses that the top executives got at these firms and compare it to the average person’s. Now you have your answer.
If you don’t take finance courses or learn about finance and business in some way, chances are that you’re not going to join the financial industry and end up taking your very own jet (forged out of solid gold) to work every day like the rest of us. Since fewer women join the high-paying financial industry, it follows that fewer women are making as much money this way.
Why is this the case? I can assure you that most men don’t fight to the death to get an internship at a leading financial institution because they enjoy studying Aroon Oscillators and utilizing the Elliot Wave Theory. They do it for the money.
Women, on the other hand, know that the size of their bank account doesn’t compensate for the lack of size of certain appendages, and instead, do things that they actually enjoy. It is for this reason that women take the courses they want to study in college as opposed to where they can get the easiest marks, even though doing so may result in a lower GPA. Of course, this may ultimately result in a lower salary as well — but then again, they’re not in it for the money in the first place.
The Other Side of Having Babies
If you are a capitalistic pig such as myself who only cares about money, you may want to avoid having children. Why?
After ten years in the workforce, only 10% of male MBAs went for six months or more without working, compared with 40% of female MBAs. If that wasn’t enough, over the first fifteen years of their careers, women work fewer hours than men (52 per week versus 58) -– adding up to a whole six months’ worth of experience over those 15 years.
In short, women work less than men.
Is it because women would rather kick back in their sofas and read the latest novel of the Twilight saga rather than drag themselves to work? Or is it because they would rather take a “personal day” off at the mall complete with a credit card with no limit?
Not exactly.
It seems that for women, their family and children are more important than working day and night in order to be able to lug some big fat moneybags home –- and I don’t blame them.
Having money is fine and dandy, but having no one to share it with kind of defeats the purpose. This is something that too few men seem to realize. Still, more and more women are straying away from directly competing with men for the high-paying executive positions.
So if you’d like to risk living the rest of your life childless or with a broken family in exchange for a few extra bucks, then I wish you the best of luck.
Parting Thoughts
In the end, we see that women aren’t really equal to men. In fact, it may be the case that women are infinitely superior to men in every way but one. But if not for these differences, how else would I be able to pass on my legacy and build a little army of Mr. Moneybags that will assist me in conquering the world?
Shall we therefore conclude that in order to be on the right track to greater financial success, that we should learn to sacrifice some of the things we love for the money, and perhaps even risk the possibility of growing old without kids or a family?
P.S. I’ve written controversial posts on my own site in the past (such as how a few cows can cause more environmental damage than a parking lot full of Hummers or how to get rich by being racist) but this is definitely my most controversial guest post (so far)!
Mr. Moneybags is the richest being in the universe to have ever existed, and accidentally invented the stock market in 16th century France while searching for a way to smuggle pilgrims across the country. He and his blog are determined to prove to the world that the subject of money shouldn’t make you want to douse yourself in gasoline and run into a forest fire.
Copyright © 2009 The Digerati Life. All Rights Reserved.
{ 22 comments… read them below or add one }
You explored these subjects very well.
John DeFlumeri Jr
Check out this recent lawsuit – one woman’s experience –
Lawsuit says Merrill Lynch favors male employees
I am female and I agree with you. I don’t have children – which the purposes of this topic makes me a pseudo-guy, I suppose. I have listened to other women at work complain about not gettig promotions or plumb assignments, but they are the ones that are always leaving early for one child-related activity or another. When it hits the fan and we all need to put in extra hours, guess who has to leave first? Of courses bosses recognize who is going the extra mile and reward them accordingly.
So, what do they all have in common? They all look like men.
I don’t agree.
But let’s say that we all agreed that it was so.
We could not conclude from it that looking like a man is what makes a woman successful in climbing the corporate ladder. It could be that there are bigger hurdles for women and that the women who look less like men are less inclined to put in the extraordinary effort required (because they have a greater number of appealing alternative options) and that as the hurdles are lessened we will see a greater percentage of woman who look entirely womanly rising to the top of corporations.
Rob
The article starts with average wage data from the Census. The reason that women earn 80% of men on Average is mainly based on occupations. From BLS.gov : “The occupational distributions of female and male full-time workers differ significantly. Relatively few women work in construction, production, or transportation occupations, and
women are far more concentrated in administrative support jobs. “
“In a study performed by some super economists at the University of Chicago, a few rather interesting facts were discerned about the reasons for the gender wage gap, one of them being this:”
Cite? Source? What were the other facts?
I’m tired of reading posts where the author doesn’t bother to cite sources. Digerati–can you make sure sources are properly cited before you accept guest posts from people in the future?
-Erica
Dobie: I wouldn’t go so far as to say you are a pseudo-guy simply because you don’t have children, but there is definitely a correlation between exposure to family matters and work performance as you have so very well shown with your excellent example 🙂
Rob: I think you may have missed the point of my article – I’m not saying you have to LOOK like a man to rise in the corporate ladder but you have to ACT like one. The CEO women looking like men was more an example for comic relief and to set up my actual points – which is that in order for a woman to succeed in a corporate environment she must relinquish many of the distinguishing characteristics that makes a woman a woman.
In my post I stated that I believe that a major fact of what makes a woman a woman is the fact that she actually takes care of her family and would rather develop personal relations as opposed to the overly-material males. In most cases, I would say that it is nearly impossible to be a high-powered executive and still maintain the same family relations that you would normally maintain with a lesser position – unless of course your day has over 30 hours in it.
@Erica,
I can have Mr. Moneybags answer your inquiries. I realize that a lot of people would like to see any statistics and reports cited in an article as backed by legitimate reports — in the future, I’ll do my best to request for actual sources from anyone who contributes to this site. At any rate, I don’t have to look far for evidence that all this is true (to some degree), especially in certain fields. I simply look at my own personal experiences and empirical evidence of the glass ceiling. And hey, I can’t blame upper management either — a lot of politics is involved, and you’ll find it in any organization and community. It’s not all about merit. And that’s the reality of any capitalistic, competitive society. The dynamics of any group works this way no matter where you are. Yeah, I’m old, a bit jaded and have been through the corporate wringer for 15 years, what can I say 😉 . There are just many industries that remain male-dominated and it’s hard to crack through their top levels of executive management.
If you want to be on top, my suggestion is — be your own boss. That is all.
With regards to this guest post — I do not agree with parts of it, while I certainly agree with others. It’s one person’s opinion and I respect it. In fact, I think some areas of the article are “myopic” (like doing what you love vs not love), but it’s cool. We are all here to offer discussion and exchange opinions and ideas all around.
My personal opinion: if you can be outstanding at any one thing and know how to leverage that one thing you are awesome at, then you stack the deck in your favor and you can be very successful. But your work, whatever it is, has to stand out. And you have to be somewhat lucky (Do you know the right people? Are you at the right place at the right time?) I believe that this is true for any type of work/profession/business.
@Mr. Moneybags,
Wondering if you can dig out your sources for the facts, statistics and reports that have been mentioned on this post? Thanks in advance! 🙂 -SVB
@Erica and all:
Apologies for not citing sources properly, guess I got lazy 🙂
Sources: Justin Wolfers, “Diagnosing Discrimination: Stock Returns and CEO Gender,” Journal of the European Economic Association 4, nos. 2-3 (April-May 2006); and Marianne Bertrand, Claudia Goldin, and Lawrence F. Katz, “Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Secotrs,” National Bureau of Economic Research working paper, January 2009.
Then again if I stuffed all my posts with long, boring sources like that then no one would read them, eh? As SVB said, you don’t have to look very far to realize that these statistics are factually founded although I could have definitely done a better job citing my sources.
Seems that the list of women CEO’s shown are selected to pick out just the ones with short haircuts and ignore those with longer hair. Look at this list of Fortune 500 female CEO’s.
The point from the study about men getting higher GPAs and taking more finance courses is specific to the MBA program from the single school they studied. So that is data for one school only. I don’t think you can assume that the grades at one school would apply to everyone everywhere.
@Jim,
I guess I looked past the literal arguments made by Mr. Moneybags and picked up his gist — which is that in order to make it past the glass ceiling, you need to make some sacrifices and learn how to roll with the culture of the organization you’re representing. The more you act and perform like those in top positions, and the more friends you have at the top, the better your chances are of breaking through.
Also, while Mr. Moneybags may have made general arguments regarding GPA and financial studies, again, I tried to look past that to see the general message: if you want to make money, then learn more about it, and be proactive about pursuing it. While it’s one way to earn a higher income, it’s not the only way (nor the best way, necessarily, IMO).
There are debatable points in this post, but I tried to focus on the big picture, which brings to light the issue of the glass ceiling and how people should deal with it.
@ Jim – You raised the very valid point point about differences in occupations.
Often, I see people use the following logic:
A: Women make less than men for the same work
B: Women make $X for every $Y that a man makes this
C: Women for $X for every $Y that a man makes, for the same work.
But you can’t simply combine these statistics. It’s an invalid logical jump (albeit one that you’ll see quite often, in various subject areas, if you watch for it)
Let’s use the following scenario:
Male surgeons make $100,000 per year. Female surgeons make 10% less ($90,000).
Male accountants make $50,000 per year. Female accountants make 10% less ($45,000)
90% of men are surgeons.
90% of women are accountants.
How does the money shake out? Let’s use a group of 10 males and 10 females
Males: total compensation for the group is $950,000 [(100,00 X 9) + (50,000 X 1)]
Females: total compensation is $540,000 [($90,000 X 1) + (45,000 X 9)]
Total compensation for females is 57% of that for males. But note that the majority of this difference is not due to the fact that they are being paid less for the same work, but that they are doing different work.
So we can say:
A: Women make less than men for the same work (10% less in our case)
B: Women earn 57 cents for each dollar that men work
but we cannot say:
C: Women make 57 cents for each dollar that men make, for the same work
Is the gender gap a true, and troubling problem. Certainly. But people who don’t separate out the various causes fro gaps aren’t going themselves any favors. I call this illogical jump from A to B to C the “transitive property of statistics” and when I see it practiced, I immediately knock the credibility of the person down a notch. When I see people do a proper breakout (comparing surgeons to surgeons and accountants to accountants), I gain respect for them.
In short:
It is true that companies shouldn’t discriminate of the basis of gender, and should simply reward the contributions to the company. A good worker is a good worker, regardless of gender, race, sexual orientation, or hair color.
Further analysis should be done on the second issue of why women tend to work in lower income fields and men in higher income fields. For example, Information Technology is male dominated. In my company, a woman can rise quite high in the systems area (and they make up a decent percentage of the executives) but at the rank and file level, there simply aren’t many females. Is this an actual problem of lack of access to the training for those occupations? If so, we should take steps to alleviate this. But if this is simply a matter of personal preference, I’m not sure what can (or should) be done. If someone (male of female) wants to be a kindergarten teacher so that they can make a difference in the lives of children, is this really a problem?
Oh – if it wasn’t apparent, my scenario is fictional and was used just to illustrate the danger of combining facts A and B.
I can’t believe how narrow all these comments are (with the exception of Digerati). I’ve been a follower of Mr. Moneybags’ for a long time and I can tell you that the point of his articles (with the exclusion of the educational ones) are meant to INSPIRE CRITICAL THINKING and to promote discussion. Had he not written the article the way he did it simply would not achieve the same results – just by all of you leaving all these comments you have already proved him right.
It appears that the majority of these readers have been so used to having their hands held for them at all times and having all of the thinking be done for them that when something comes along that requires some brain power they simply dismiss it. Look at how Digerati approached the article to see how the article should be approached – YOU HAVE TO THINK!
Rant over! Great post, gets you thinking, shows a different perspective that many people fail to realize, bravo!
@Kosmo: you are absolutley correct and I couldn’t agree with you more. It pains me to use this phrase, but you have to compare apples to apples. As for your last question, that is exactly the point of my entire article – women do what makes them happy as opposed to what brings them more money, i.e. becoming a kindergarten teacher. I have infinitely more respect for people who decide to do what they love instead of what makes the most economic sense.
@ SVB and Johnny: thanks for the support!
Kosmo makes some great points. On the flipside, I have also seen companies go specifically out of their way to address the diversity issue, so much so, that the whole “equal opportunity” motto becomes a mission. My guess is that depending on where you work, what industry you work in and even what country you reside in, you will get a variety of results. And by the way, what irks me more than the existence of the fabled glass ceiling is taking affirmative action too far (okay, this would be another major point of debate for many people). The irony is that when we try to address discrimination with anti-discrimination policies, things can go overboard and can foster an atmosphere of reverse discrimination.
@Johnny, controversial posts will draw fire, debate and hopefully, a thought-provoking discussion. Thanks for the input!
The point from the study about men getting higher GPAs and taking more finance courses is specific to the MBA program from the single school they studied. So that is data for one school only. I don’t think you can assume that the grades at one school would apply to everyone everywhere.
I am female and I agree with you.
What an excellent, excellent post! I found it extremely ironic that most of the women agree with this article (judging from the comments) and it is the men that are actually attacking the author’s great work…maybe the men are trying to prove something? 🙂
Interesting article. I’m not sure that I follow the authors arguments, however.
-I thought that the “13 fortunate women” that the author referred to appeared feminine, but professional in appearance. Certain attire is simply not comfortable, or appropriate in the board room (mini-skirts, stilettos, etc.). They also appeared to be highly educated and experienced, given their credentials, which would make them worthy of respect. That is, if the fact that they are someones mother, daughter, or sister, isn’t enough to make them worthy.
-How is enrolling in a “finance course at university” even relevant to whether or not women are paid equally to men? I did very well in calculus despite limited interest, and I suspect that I could have done equally well in finance, but it wouldn’t have affected whether or not I’d be paid equally to my male peers, which is the whole point. Women want the same pay for the same work, whether it’s high-paying (finance) or low-paying.
-On “having children,” all that mothers want is to be treated equally to fathers in the workplace. No one will disagree with the fact that children require the ‘presence’ of their mothers in their formative years. As the mother of a young son, I would also assert that children require the ‘presence’ of their fathers, and other strong male role models, in their formative years. I don’t think anyone would disagree with that either.
I wonder if a man writing about what its like to be a woman is similar to a catholic writing about what its like to be jewish. I also wonder about all of the men that commented on how well the author explored what its like to be a woman… How do they know?
By they way, your site seems to be advertising “hottest Costa Rica women”. Something you might want to look into.
From my point of view, I applaud the attempt to at least call this out.
In Asia, the bias is not on women but on race; it runs deep and unspoken. There are times that I was dead sure it wasn’t the talent that got that person the job, but his network and skin.
All this attempt to try and “save face” actually exists here in Asia. I couldn’t say its a totally bad thing. It get things done, if it works in your favor.
Irwin K Chua