The Gender Wage Gap: Context & Solutions

As part of her research on the gender wage gap, Dr. Laura Kray — Faculty Director of EGAL and Professor at Berkeley Haas — conducted a survey of several hundred people in the US, finding that about a third of male respondents didn’t believe in the existence of a gender wage gap. They attributed discrepancies in pay to women not working as hard, or choosing to take career breaks — highlighting a few of the common misconceptions around why women get paid less than men.

Pictured left to right: Genevieve Smith, Laura Kray, Breanna Zwart, Jeanna Steele | Photo by Jim Block

On February 18, 2020, Berkeley Haas’ Center for Equity, Gender, & Leadership (EGAL) hosted an event to explore the underlying causes of the prevailing gender wage gap and spark an engaging conversation around measures necessary to mitigate it. The panel, moderated by Genevieve Smith (Associate Director at EGAL), featured three leading experts in the field: Dr. Laura Kray, Jeanna Steele (General Counsel at Sunrun; previous member of California’s Pay Equity Task Force), and Breanna Zwart (President of the SF Commission on the Status of Women and Associate Principal of Social Impact at YouTube).

Over the course of an hour-long conversation, the panelists shared perspectives from their respective research, as well as corporate and public sector experiences to provide context, debunk myths, and push for systemic changes to address the wage gap across industries. Here are three major takeaways from the discussion:

Research shows that more traditionally “masculine” traits are rewarded in the workplace resulting in higher positions and compensation than equally important, but traditionally “feminine,” traits.

Offering key insights from her review of compensation data from Haas FTMBA alumni over the last decade, Dr. Kray revealed that while men and women may have started their careers at the same or similar levels of pay, the gender wage gap widened as they moved up the hierarchy and bonuses and discretionary pay came into the picture. While the law mandates equal pay for equal work, the fact is that further up the corporate ladder, each job is unique, making it difficult to identify “identical” roles.

In addition, social psychology research shows that stereotypically masculine leadership traits (being more demanding, task-oriented) are often associated with leading larger teams, while stereotypically female leadership characteristics (being more collaborative, interpersonally-oriented) seem better suited for smaller teams. Dr. Kray questioned the rationale behind rewarding one set of traits over the other by making team size a significant predictor of compensation for leaders.

Dr. Kray also debunked the popular explanation that women perpetuate the wage gap by not negotiating as much. While research does show that women tend to negotiate less than men overall, Dr. Kray outlined a harsher reality that prevents women from negotiating effectively: as they gain experience, both men and women negotiate more; women just tend to be told no more often. Zwart added that women’s asks are often misconstrued, and that they are more likely to be seen as and penalized for being “overambitious”, recounting a personal anecdote in which she was told she couldn’t possibly make more than the man on her team.

Encouraging transparency around pay equity will require public policy intervention in the free market.

The trio emphasized the importance of data and transparency when it comes to creating a culture of pay equity in organizations. Steele outlined the laws in place as well as the importance of knowing your rights.

Citing Ericka Baker’s move to encourage Google employees to share their base pay, equity, and location information, Zwart highlighted the role of transparency in correcting past discrimination in firms, which have typically had more leverage when it comes to information about employees’ compensation. She noted that policies, such as the one eliminating past salary information, are a positive step towards reducing information inequity. Both Steele and Zwart did acknowledge, though, that some states are making it illegal for employees to share salary information — in effect violating federal law.

In light of this, Zwart emphasized the importance of grassroots change to move things forward, arguing that it is likely to be driven at a local / city level — as seen with the UN legislation (CEDAW) that the US as a whole hasn’t signed, but that around 50 cities are implementing in order to hold public and civic society accountable. In San Francisco, this entails partnering with private corporations as well, potentially requiring them to disclose their pay data and answer questions around supporting parental leave etc. before moving into the city.

Along similar lines, Dr. Kray advocated for the use of collective bargaining powers to demand accountability in the academic sphere, by requiring firms to report/explain their pay gap in order to recruit on campus. Steele added a caveat around stringent laws that might hinder companies from sharing data, suggesting that it might be easier for companies to adjust internally. She joined the California Pay Equity Task Force when the Fair Pay Act was passed, and found that the law needed to work in conjunction with private stakeholders.

Creating a culture of pay equity will require multi-stakeholder partnerships, with a combination of policies and broader structural changes

Using Sunrun as an example, Steele laid out the business case for closing the pay gap, highlighting how fair compensation can improve attraction and retention of top talent. She also emphasized that this isn’t just a “female issue” — as more and more couples are moving away from a traditional breadwinner format to a dual-career one, men are feeling the negative impacts of women’s wages not coming into their family income.

At a corporate level, Steele suggested outlining a compensation philosophy and conducting an audit every year to identify and correct and discrepancies. She cited the materials she created while on the Task Force as a starting point for this, which is a menu of items for a company to address in a year. The holistic approach familiarizes managers with existing laws and helps them understand how leave policies and representation are crucial to ensuring best practices around gender equity, how to examine hiring best practices, and more.

All three panelists also acknowledged that addressing pay equity means ensuring that workplaces are equitable regardless of gender. Policies such as paid parental leave and support for caretaking for both men and women is necessary. Men taking parental leave helps set expectations around equal caretaking responsibilities. Policy reform to support leave and caretaking needs to occur both within companies and throughout the government.

The panel ended with an understanding that this dialogue has to continue — that there is no one size fits all solution, but that this multi-faceted range of steps should be pursued by all affected stakeholders in order to close the gender wage gap.

Photos by Jim Block

At the heart of UC Berkeley's Business School, the Center for Equity, Gender, and Leadership educates equity-fluent leaders to ignite and accelerate change.

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