Good evening. I’m delighted to be here tonight. When I hear that American productivity is the highest ever, I know why: it’s the women. This room is filled with women of passion and purpose who are making a difference in their jobs, in our society, and in the American economy. And you represent the very real power of women in business.

That’s a power that we now need to bring to bear on an important issue, which I’ve been asked to talk to you about tonight: the gender wage gap.

First, I’d like to give you some background information, then go over some numbers, and then talk about what we can do about the injustice of the gender wage gap.

In 1963, when women earned 63 cents to the man’s dollar, Congress passed the Equal Pay Act. Not a bill with a lot of teeth in it, because it didn’t offer much in the way of remedies. Since then, the wage gap has closed only 13 cents – and much of that came from a decrease in men’s wages.

And during the 1990s, that time of wild prosperity in America, the wage gap closed by less than 2 percent. At that rate, women’s earnings won’t equal men’s for 120 years.

Last week women observed Equal Pay Day. That’s the April day that symbolizes how long women work into the new year to catch up to what men earned the previous year. Right now, the average woman who works full-time, year-round, earns 76 percent of what the average man earns.

But how do women’s wages compare to white men’s. Asian women do best: they earn 75 cents to the white man’s dollar. White women earn 70 cents. African-American women earn 63 cents and Hispanic women earn 53 cents.

This is 40 years after the Equal Pay Act.

Let’s look at how this plays out in different industries. It’s actually really hard to find comparative wage data, so NAFE does an annual comparison salary every fall which we publish for members in NAFE Magazine. It’s hard to get this information because employers don’t want you to know. They don’t even want to know themselves, because that information could be used against them in lawsuits. (As we saw recently with the Merrill Lynch case, where one woman was awarded $2.2 million for a pattern of discrimination. In arbitration, they subpoenaed the company’s salary data.)

NAFE can’t compel data, but we dig around and publish what we can find. For our 2003 salary survey, we located comparison information for 21 business sectors. Overall, women earned between $10,000 and $20,000 a year less than men in the exact same jobs, with comparable experience.

$10K a year less over your 40-year career comes to $400,000 less that a woman earns in the identical job as her male colleague.

Women in accounting, advertising, law, and public relations pocket about $20K a year less than men in the same jobs. Even in sales, where you’d expect a level playing field, women face a gender wage gap of more than $30K annually.

Here are some numbers for different kinds of jobs:
University professors earn 11% less.
Creative directors in advertising earn 20% less, or $40K
Insurance adjusters earn 23% less
Physicians assistants earn 42% less
Chemists: 18%

How is this possible?

Some common sense reasons are given for the gender wage gap:

Women are more likely than men to take time out of the workforce. Motherhood being the principal reason. But the only study done of this found that 30-year old childless mothers earn 90% of what their male colleagues earn. More women work in lower-paying, female professions like education. In fact, studies show that the higher the percentage of women in a field, the lower the salary. Factors like union membership and education level.

But even when you control for the factors listed above, studies find a 12-20% wage gap that can’t be explained by childraising, industry differences, or occupation. And please explain to me how motherhood or education or profession could possibly lead to this discrepancy: male lawyers start out earning $5000 more than women lawyers. (Aside: there’s another commonly heard reason for the gap: women don’t negotiate as well as men. I’ll get back to that one.)

The only way to explain this 12-20% wage gap is discrimination, according to Jared Bernstein, a guy who’s a senior economist at the Economic Policy Institute, a nonpartisan think tank.

Discrimination that’s part of the glass ceiling that not only keeps women out of the highest paying jobs in many fields, it also means lower opening offers, smaller raises less often. Because women still face myths: leave to have babies, less loyal, not risktakers, less committed.

Now if you haven’t had enough bad news ...there’s another factor at play in the gender wage gap, and that’s geography. How well you get paid compared to men varies with where you live.

If you’re a woman living in Washington, D.C., you’re at the top of the heap. Women in the nation’s capital earn 92 cents to the man’s dollar. Next best is Hawaii, although that drops down to 83 cents; then Maryland, at 81 cents. New York ranks 24th in the nation, at 75 cents. And the worst place for women: Wyoming, don’t give me a home where the Hummers do roam. There, women earn 66 cents to the man’s dollar.

But if you think the wage gap’s bad now…just wait for the gender pension gap! This is a looming crisis for baby boomer women. Women live longer than men, so we need more retirement savings. But we earn less than men, so it’s harder to save.

Women over 65 earn 43 percent less income than men. That’s the most recent data, from 1999. Most women don’t have retirement plans: only 45 percent of working women, compared with 54 percent of working men participate. Please, if you’re eligible in your current job, start putting away the maximum the IRS allows, because you’ll need it.

So women over 65 receive 64% less in pensions than men. In other words, the gender pension gap is a whopping 64 percent.

So women over 75 are more likely than men to live in poverty; and single women over 50 are more likely to be poor than any other group – single or married men, or married women.

What can be done? We have to work to close the wage gap. In a serious manner. We have to educate others. Go home and tell your husband, and tomorrow tell your colleagues and your friends.

The AFL-CIO estimates that the average American family loses about $4000 a year due to the wage gap. So they’ve teamed up with The National Committee on Pay Equity and other women’s groups to push for change.

They’ve renewed effort to promote “pay equity” legislation. And you can get state legislators on this. This is actually an old movement. Pay equity seeks to ensure that jobs traditionally held by women don’t pay less than jobs of equivalent value traditionally held by men. For example, social worker and parole officer would be equivalent. There are about 50 bills pending in various states.

Heidi Hartmann, CEO of the IWPR, found when a state spends one percent of more of their budgets on pay remedies can see the wage gap shrink by nearly a third.

Maine passed one of the best laws. Talk to your legislator and push for this one. It says that private employers who do a self-evalution of pay practices and then take steps toward fixing or preventing discrimination – these companies earn a presumption of compliance in any lawsuit. That places a heavier burden of proof on employees filing discrimination complaints.

So what can you do, if you’re as outraged as I am? Nothing’s going to happen if we don’t put pressure on them. Because Congress doesn’t want to pressure private employers to pay anyone more. And let’s face it, what employer is going to pay you more than they can get away with?

You can pressure your legislators for stronger enforcement of the Equal Pay Act -- by enacting provisions of the Paycheck Fairness Act, now part of the omnibus Civil Rights Act of 2004. The Paycheck Fairness Act makes it easier to sue on behalf of groups of women. Get them to support it.
You can urge passage of the Fair Pay Act, which addresses the problem of lower wages in fields dominated by women and people of color.

So there’s one more thing that you can do: you can become a better negotiator for yourself. Women are great at negotiating for others -- great lawyers and agents. But negotiating for ourselves...we don’t like confrontation. We don’t see it as a game. We want to preserve the relationship. And we see the offer on the table as a starting point, not the only offer we’ll ever get. My advice, no matter your level: if you’re not comfortable, get some training. NAFE offers a discount on an online course that you may know about, since your Carol Frohlinger is one of the masterminds. It’s called theshadownegotiation.com.

And talk to your HR department. A few companies are taking steps. The best I’ve seen is IBM: they assess gender salary data annually. When they find an inequity, they require the person’s manager and the manager’s manager to explain in writing. If unjustified, the department must correct it. If the department hasn’t got the money, HQ makes it available. That’s a program with teeth.

Yes, there is some good news for women that I’d like to talk to you about – it’s about companies out there that are doing the right thing. NAFE recently named the 2004 Top 30 Companies for Executive Women. And I’m happy to tell you, there’s some real good news out there. First, let me tell you about how a company makes the list.

To apply, they must have at least two women on the board. But two women out of ten gets more points than two out of 20.
We look for a woman CEO and women in the C-suite: COO, CIO, CFO, etc, and create a percentage compared to men.
Then we assess titles to see which of those have profit-and-loss responsibility. It’s P&L jobs that lead to the corner office: they generate revenue. Men still hold 90% of these positions in corporate America. This is where the glass ceiling is still really thick. When we find women in the C-suite now, it’s mostly in jobs like CFO or General Council – great jobs, but not routes to the top. Some call these pink collar ghettos – finance, legal – just like HR and Communications have traditionally held more women.

We take this hard look all down the ranks: how many women are running manufacturing operations, divisions, country operations? What about middle-management women: how is the P&L pipeline?

Also important: how many women are among the 5 top earners that companies report to the securities and exchange commission? In the Fortune 500, men in hold 95 percent of these jobs.

Then we check training programs for women, who’s looking at succession plans and compensation equity. At our #1 company, the board reviews lists annually for gender equity – and compensation equity. We make sure that managers are held accountable, preferable with compensation. And of course, we look at the work/life balance programs.

Avon is the #1 company for the sixth consecutive year, the only company with a majority of women on the board. However, they’ve got real competition in #2 Scholastic and #3 Liz Claiborne, which have more women in P&L jobs than men. Only one company in the country has four women out of five top earners, and that’s Scholastic.

Women are faring a lot better at the Top Companies for Executive Women. I compared them to the Fortune 500 in a few categories.

How many companies have 3 or more women on the board? Only 14% of F500 companies; but in the NAFE Top 30, 70% have three or more women on the board.

What about money? In the F500, 5.2 percent of top earners are women. But on the NAFE Top 30, 17%; Top 10, that rises to 38% women.

As for CEOs: on the F500, 1.6% are women; in the Top 30, it’s 13% women; and in the Top 10, 33% of CEOs are women.

Let’s take a moment with that one. One third of the top 10 companies for women – one third of the companies with the most women in top jobs -- are run by women. Yes, when you’ve got women at the top, you’ve got more women succeeding at the company. Companies run by women show some of the highest numbers of senior women.

Surprised? Women hire women. Women know that women can run things.

Susan Kropf, the chief operating officer at Avon, told NAFE, “There’s no doubt in my mind that women can run divisions.” When women do the hiring, they don’t ask, “Will she be committed to the job?” They don’t ask, “Can she manage men?” It doesn’t enter their minds to wonder, “Does she have the knowledge, the nerve to run a business?”

So Andrea Jung runs Avon along with a woman COO; at Hewlett-Packard, Ann Livermore heads HP Services for CEO Carly Fiorina; at the NYT, Cindy Augustine works alongside CEO Janet Robinson to bring in 98% of company revenue; at Charming Shoppes, with its woman CEO, women run all three retail units; and at Phoenix Companies, also with a woman CEO, women run two of our business lines. The more women that make it, the more women will follow.

And our economy will only get better for it. Catalyst recently examined companies on the F500 to correlate financial performance and representation of women. They found that the companies with the most women in senior management had a 35% higher return on equity. In other words, companies with the most women senior managers do better.

But no news there: we know that women are terrific. We are leading the way out of the recession.

And so, too, we can lead the way in closing the gender wage gap. Let your Senators and Representatives know you want them to take action. Contact the White House. Vote for local and national candidates with proven track records on women’s issues and who have taken a stance for closing the wage gap.

Women are making corporate America more profitable. We should be taking home our fair share.

Thank you.

May 2004
www.liwomen.com