The Model to Close the (Real) Gender Wage Gap
As a gender demographic, women’s lifetime earnings are substantially less than men’s.
That is undoubtedly, in part, a function of both unequal opportunities (particularly in career advancement) and unequal social and familial expectations of women. I suspect the latter fuel latent, even unintentional, institutional gender discrimination. It certainly raises questions about why women and men make different career choices.
That is a problem, and it is a problem that a For-Profit Moral Community must be concerned with. If individual women are earning less than they would sans the chauvinist pressures society foists on them and the bias that lingers against them, it should outrage us.
On the other hand, a business has no obligation to subsidize any individual’s life choices. To wit, many individual men also earn less than their potential because of social and familial pressures. Ultimately, it is an individual's obligation to make her or his own way and forge her or his own associations and to be responsible for them and to bear their costs, even the cost of foregone earnings.
But with that responsibility comes the absolute right to reap the full rewards and profit from those decisions. Women have historically been forbidden that responsibility and refused its rewards.
It behooves companies to aggressively guard against any forms of the lingering, latent misogyny, particularly if it creates a whiff of pay discrepancy.
We must actively recruit, hire, promote, and pay in such a way to jealously guard the right of each individual to reap the full rewards of her work and value contributed. That brings us back to the wage gap:
What do we do about it?
Blow Up the Equal Work Myth
Can we get over the idea of equal work? It is a holdover of the assembly line, cog-employee era, reinforced and amplified by Fredrick Taylor’s notion of interchangeable workers and hourly wages.
Aside from the obvious moral imperative of reducing no person to a cog that can be purchased and replaced at will, in a company even considering, let alone remotely approaching, a culture of value and innovation, “equal work” is a myth and an obvious one.
And it has nothing to do with gender.
No two people possess the same skill sets, motivation, perspectives, or experiences. Therefore, no two individuals create the same value, or make the same contributions. Doesn’t, “equal pay for equal work” begin with the assumption men are the measuring stick, rather than the individual herself?
To assume women are “equal to men” is metaphysically correct, but it ignores the value of individual women and the fact that that many women are superior in many ways to their male colleagues.
Why should they make only what he does? And, reciprocally, why should a man make only what an inferior female colleague does? The answer, of course, is that neither should.
If profit belongs to the individual who creates value, more profit belongs to those who create more value. Equal pay for equal work perhaps respects women as a demographic, but it does not respect and reward individual women because it does not respect and reward individuals.
Focus on Colleagues, not Demographics
If you have paid attention, though, you have noticed that there is no longer an equal pay for equal work debate. The rhetoric has shifted to “women earn less than men.” That’s likely because the adjusted wage gap, that is what cannot be accounted for by proper regression analysis, is between five and ten percent.
That means when we control for relevant variables — as personal, education, demographic, job, and company differences between men and women — individual women earn 90 to 95 cents for every dollar their male colleagues make. The AAUW puts it at 6.6 percent; we will use that figure as an average.
Ninety cents on the dollar is far less alarming, and, in fact, a far smaller problem, than the the 77 cent figure the political Left tosses around, but it is still a problem. The wage gap does not “disappear” when controlled for variables and a 6.6 percent disparity between collegial earnings is certainly not irrelevant, as the political Right insists.
If 6.6 percent is irrelevant, it should be no problem for men to take a 3.3 percent pay cut that could be redistributed to their female colleagues, right? Of course, nobody claiming irrelevance will embrace that plan, which is the de facto admission that it is very relevant.
The gender wage gap should should offend and anger us without rhetorically inflated figures. And it should particularly infuriate us when Rosie is superior to Johnny.
So, what do we do?
Shift focus from pay to profit
I discussed before five implications of profit justly and naturally belonging to the individual who creates value, not the company that “employs” her and how it will look in an organization. It is also the solution to not only closing the gender wage gap, but making the discussion irrelevant, as each individual is not paid top down but takes profit bottom up.
Here is the model:
- Each individual in the company, from the C-ustodian to the C-EO earns an identical living salary.
- At least 1/3 (because labor is one of three factors of production) of net profit belongs to employees.
- Each job within the organization has an objective and clearly defined formula to measure “value created” (think integrated score cards) which determine the percent of that profit they take.
Thus, individuals with the same job create profit measured by the same standard which is added to the same living salary. Pay discrimination is impossible because the model respects the individual and recognizes that she or he own the profit generated by the value they create.
That is egalitarian opportunity and point blank equality.
#GTIdeology Happy Hour Chat
We discussed these issues in The @SkolnyOrg’s #GTIdeology Happy Hour Twitter Chat on March 19, 2015. The complete chat reset with transcript is forthcoming.
You are invited and welcome to join us every Thursday at 4:00 PT | 7:00 ET to discuss various aspects of our GTIdeology — the ideology of Greatness Through the Individual applied to business.
About Vince Skolny
Vince Skolny is the Founding Chair of The Skolny Organization, an unabashedly for-profit venture marketing organization that exists to impact the world by creating and encouraging greatness through the individual.
Vince is a fierce advocate for the individual and intends it to lead an entire social revolution, reorienting society around individual persons, point blank equality, and genuine egalitarian opportunity.
He speaks to groups, conducts workshops, and facilitates discussions on the ideology of Greatness Through the Individual as the foundation of life, society, and business.
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Copyright © 2015 by Vince Skolny. You are free to share and disseminate this article however you wish, but don’t even think of selling it or claiming it as your own. You’re better than that.
