Since the Paycheck Fairness Act of 2012 is getting a cloture vote in the Senate today, I thought I’d start a conversation about worker compensation. It used to be understood that most households could get by on one paycheck and that the father was the one presumed to be responsible for that income. If a woman was working, it was kind of assumed that her income was supplemental. These presumptions justified overt pay discrimination against women. The men literally needed the money more than the women. As society changed, the old presumptions went from being presumptuous to being offensive on their face. If people still make arguments in favor of wage discrimination, they use other rationales, like the fact that women are more likely to leave the workplace for maternity leave or to care for a parent. Most people would say that that is irrelevant and you shouldn’t treat a woman differently from a man just because she might have a baby or she might be more likely to leave the job to look after her family.
In any case, let’s try a thought experiment. A company has two entry-level job openings. They decide to fill the jobs with two Stanford graduates, one a man and the other a woman. They have identical degrees and totally equivalent work experience. They will be doing the exact same job for the company. Now, let’s say that company has a pay range for these openings. They’ve budgeted a minimum of $50,000/year and a maximum of $70,000/year. The man asks for something closer to the maximum, say $65,000. The woman asks for something closer to the minimum, say $55,000. Does the company have an obligation to ignore their requests and give them both the same starting salary?
What if it proves to be the case that women are statistically less successful in salary negotiations than men? How do you actually conclude that it’s the women’s fault and not a bias on the part of the people who do the hiring? Could they just be less willing to make concessions to women? I’ve seen studies that showed that both women and blacks wind up paying more for cars than men and white men, respectively. This was in part because car dealers made higher initial offers to women and blacks, and drove a harder bargain with them. But it was also partly because women and blacks were less willing to haggle. There’s a bit of a chicken and egg problem with sorting that all out. But one way to solve it is to eliminate the haggling. The car has one price, and so does the job.
Are there good reasons to make pay negotiable? Or should job postings come with firm salaries attached to them? I think it would be hard to do that because a job might be available to people with widely different work experience. A company might not want to limit the applicant pool to recent college grads, and might be willing to pay more for the right person who has some experience.
Anyway, what are your experiences in the workplace, and what do you think should be done, if anything, to address wage disparities and gender discrimination?