Wall Street's Gender Pay Gap
The strip-club atmosphere may be gone from Wall Street, but gender discrimination lives on in work rules and compensation programs that favor men, according to a book about Wall Street's gender pay gap.
In Selling Women Short: Gender and Money on Wall Street, author Louise Marie Roth concludes that women working on Wall Street make 71 cents on the dollar compared with men who have the same experience and same credentials doing the same jobs. Those findings echo the US Census Bureau's 2007 American Community Survey, which reports that women in finance and insurance occupations earn just 55.2 percent of what men do.
"The fact is that Wall Street claims to pay for performance, but the evaluations of performance are often subjective and women end up not receiving as high evaluations as they should given their performance," says Roth, who based her book on in-depth interviews with 32 men and 34 women from five top-tier MBA programs who accepted positions on Wall Street.
The more successful women in the sample went into sales and trading "where their contributions would be measurable," says Roth. They also avoided relationship-oriented positions in favor of those that involved client deliverables, such as issuing asset-backed securities, she adds.
Despite such strategies, the pay gap persists. "When the managers are men, which most of them are, they tend to offer more things to men -- good accounts [and] mentoring opportunities," says Roth, an assistant professor of sociology at the University of Arizona. "When women are managers, they do the same for other women, but they're not usually in areas of power. They're often in lower-paying areas of the business."
If you work on Wall Street, how can you determine if you're being compensated fairly? Check available sources to see what jobs you're considering should pay, recommends Susan Antilla, author of Tales from the Boom-Boom Room, an account of lewd and obscene behavior on Wall Street.
"Study the reports that come out in BusinessWeek that record what men and women make one year and three years after graduation from business school," she says. "It will give you an idea of what you should be making."
Make Conscious Choices
Women make work choices that limit their earnings, argues Warren Farrell, author of Why Men Earn More: The Startling Truth Behind the Pay Gap -- and What Women Can Do About It.
Childless, never-married women make 117 percent of what their male counterparts earn, says Farrell based on his interpretation of Census data. To earn more, Farrell suggests women:
- Work long hours.
- Go into math and hard-science-based fields.
- Avoid dropping out to have children.
- Take responsibility for bottom-line activities.
- Take commission-based work.
Expand Your Horizons
Merrill Lynch managing director Subha Barry says that while everyone must work hard to succeed in investment banking, it's important for women to reach out and understand how different departments within investment banking operate.
Internal programs, such as Merrill Lynch's Profiles of Women in Leadership conference, client-targeted events showcasing women leaders, women's internship programs and reverse-mentoring (in which Gen X workers share their viewpoints with Baby Boomer colleagues), can also boost your career, Barry says. So can women's networking programs offered by such organizations as the Financial Women's Association, Women on Wall Street or 85 Broads.
Know Your Employer
Not all firms are alike, so it's important to research whether potential employers have a history of gender bias. Antilla suggests using neutral sources such as LexisNexis to look for past news stories about sexual harassment and gender inequity lawsuits filed against a potential employer.
And if you're harassed or treated differently because you're a woman, document everything. If you're groped in a stock room, tell your spouse and your friends at work and report the incident to human resources. "A lot of women don't want to use the company [harassment reporting] system because the second they call HR, HR shifts into high gear to defend the person who harassed them," Antilla says. If that happens, document how people are treating you differently after your complaint.
After writing about gender-based lawsuits filed against investment banking firms, it's not surprising that Antilla has one final piece of advice for those who plan to complain about gender bias: "It doesn't hurt to consult with a lawyer."