Economics Gender Tender

Telecom chief executive Theresa Gattung was headlined “the $2 million woman”, when newspapers reported her restructured pay package and the potential it created for her to earn more than $2 million year. Business writers explained how the figure was constructed – $1 million base salary plus extras determined by performance and an options package related to Telecom’s share price. They didn’t ask: would it have been more if Theresa had been bloke?
The possibility that Gattung has been short-changed, or short-changed herself, is raised by Linda Babcock, an economist at Carnegie Mellon University. Babcock concludes women are satisfied with what they are offered, unsure of what they deserve and fearful of bargaining, but blokes don’t mind negotiating and are confident they deserve more.
Babcock’s work (she has produced book entitled Women Don’t Ask with freelance writer Sara Laschever) was mentioned recently by The Economist in an article examining why, after years of equal opportunity, more men reach the corporate summit than women.
One reason may be that women view work differently to men, The Economist conjectured.
The magazine referred to new research by Catherine Hakim, at the London School of Economics, who found men are three times as likely as women to regard themselves as “work-centred”. Women want opportunities, but not life dominated by work.
The Economist also mentioned American research which suggests women behave in ways that disadvantage them, even in the job market.
First, Uri Gneezy and colleagues at the University of Chicago’s business school have established that women and men have different attitudes to competing. One study involved nine- and 10-year-old children. When they ran race alone, boys and girls clocked similar speeds. When children raced in pairs, girls’ speed hardly altered but boys ran faster when paired with boy and faster still when racing against girl.
Gneezy reasons that if men try harder when competing, they will disproportionately win the top jobs, even when doing job well does not require an ability to compete. Job selection is itself highly competitive.
Second, Babcock found women may do worse than men even when they win job, because of their different approach to negotiations. Women shun negotiations, ask for less than men when they make the all-important opening offer, then concede too quickly.
Babcock first noticed the difference among her graduate students while she was director of the PhD programme at Carnegie. Male graduate students asked for all sorts of things – travel money to go to conferences, exemptions from course requirements, opportunities to teach courses of their own – that female students rarely asked for.
She began wondering if this difference between her students pointed to more pervasive difference between men and women everywhere and devised several studies using very different methods. They all came up with the same result: women are much less likely than men to ask for what they want or to use negotiation to promote their own ambitions or desires.
There are profound consequences.
Women earn much less money than men over the course of their careers. One study found that male graduates of an Ivy League business school negotiated for 4.3 percent higher starting salary than they were initially offered, whereas female graduates negotiated for just 2.7 percent.
According to Babcock and her colleague, by simply accepting what she’s offered at her first job rather than negotiating for more, woman sacrifices more than US$500,000 over the course of her career. “That’s massive loss… for avoiding what is usually no more than five minutes of discomfort,” she says. Yet most employers expect people to negotiate and therefore offer less than they’re prepared to pay.
Another consequence: women often advance more slowly than equally qualified men because men are more likely than women to ask for prestigious assignments, volunteer for opportunities that will give them more visibility, and pursue raises and promotions they think they deserve. Women, in contrast, often expect hard work and high quality work will be recognised and rewarded without their asking.
Because they don’t ask to be considered for the opportunities and advantages for which men ask, they often aren’t recognised for the good work they do and don’t progress as fast or as far in their careers as their talents should take them.
Our Government in May set up task force aimed at hastening progress towards pay and employment equity in the public service. Maybe it should cut to the chase by catching up with the new research. M

Bob Edlin is regular contributor to

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