Pay Gap Sends Mixed Messages (Editorial)

A study by the American Association of University Women Educational Foundation of Washington, D.C., on the pay gap between women and men in the United States drew quite a bit of attention in mid-April.
The same day the study came out, a report by global outplacement consultants Challenger Gray & Christmas Inc., which tracks CEO changes, said the percentage of outgoing CEOs replaced by women increased 11 percent in 2006 and so far the upward trend appears to be continuing in 2007.
The AAUW report, titled “Behind the Pay Gap,” said that one year out of college, women working full time earn 80 percent of what men earn. Ten years later, women earn only 69 percent as much as men.
But for those who go past the headlines, the study found the choice of fields of concentration in college was significant. Female students tended to study areas with lower pay, while male students dominated higher-paying fields.
So what’s obvious at first glance may not be as alarming as some make it.
Yes, the report does show a gap when factors such as the number of hours worked, occupations or parenthood are considered, but it’s much smaller than the 80 percent gap. Comparing similar jobs for the class of 1993 10 years after graduating, the gap was 12 percent. For the class of 2000, one year after graduating, it was down to just 5 percent.
The Challenger report said that, of the 1,051 CEO departure announcements in 2006 that included succession details 8.2 percent of the replacement CEOs, were women.
So far in 2007, 17 of the 183 (9.2 percent) CEO replacements named have been women.
The Challenger survey also found that of the 86 women replacing outgoing CEOs in 2006, 24, or nearly one in three, were taking over for men.
The AAUW would like for more women to enter male-dominated fields that pay more, such as engineering and business. When they do, the pay gap is smaller. And perhaps, looking at the Challenger report, as more women take over at the top, true pay equity may not be that far behind.
We certainly don’t mean to be flippant about the issue. We recognize that women still must overcome many barriers in the workplace. There are still too many who simply don’t consider women for top positions. Companies that fail to promote women are hurting themselves and their future growth.
Companies should follow the example of those Arkansas companies honored recently with the Governor’s Family Friendly Employer Awards by supporting talented women with more flexible work schedules, telecommuting and child care.
Ponder this: Forty percent of all privately held companies in the U.S. are owned or headed by women, and those companies are creating jobs twice as fast as all other companies combined and pay more salaries than all of the Fortune 500 companies.