One More Time: There Is No Gender Pay Gap

Published: June 11, 2007

by Nate Viall

During April 2007, several national news organizations once again highlighted the much ballyhooed gender pay gap. Women appear to make only 81 cents on the dollar compared to their male counterparts. In addition, the April Behind the Pay Gap report from the American Association of University Women highlighted a purported disparity between salaries earned by men and women. One year after graduation, women appear to be paid only 80 percent of what men are paid, the report found. After 10 years, their pay dropped to 69 percent.

That would be terrible, if it were true. Instead, the gender pay gap is a false premise, and it risks distracting our IT profession and the nation from focusing on innovative ways to lead and develop the work force in changing times.

Any discussion of apparent gender salary differences must make the distinction between career earnings (does someone choose to be a grade-school teacher or an engineer, a documentation specialist or a software architect?) and the pay or salary for a given job function, title, or grade level. There is no gender pay gap at the level of title or pay grade, including in the IT field.

Why? In part, women choose professional careers that pay less in the entry-level marketplace. That is a career choice, not a pay gap. For most professionals, including those in the IT field, there are typically no more than seven statistical pay steps from a junior staff position to the high-paying middle management function. Some professions pay middle managers only at level 5 or 6. It looks like this:

Figure 1. Salary Estimates by Step or Grade Level

If you choose grade-school teaching or PC support, you will start at level 1 and reach a career cap sooner than if you choose computer science or engineering, where you will start at level 3. In a market-driven economy, choose wisely.

The second message of the AAUW report is that even after accounting for factors that impact wages such as occupation, industry, experience, and education, the pay gap attributable to gender is still 5 percent one year after graduation and 12 percent after 10 years. How is that possible, given that:

• Sex discrimination laws have been on the books for more than 25 years.
• Gender equity is top-of-mind for human-resources professionals, many of them women.
• Business leadership, from the board of directors down, reviews salary equity frequently.
• Unemployment is very low, implying salary equity for good employees who could otherwise choose to leave.

I have unique insights into this topic, starting with degrees emphasizing organizational psychology and statistics. Since 1982, I have recruited information technology staff and managers nationally, giving me thousands of "case studies." Candidates seldom mention gender bias. And I've conducted statistical studies and refined my salary models since 1984. Gender has not proved a significant factor in salary differences in my research. Why? In part, salary data is very messy, with wide ranges within an occupational function. For software developers (four grade levels), the middle two-thirds of their salary data varies by more than $32,000.

Figure 2. Salaries for System i Developers Extend Over a Wide Range

What did the AAUW researchers overlook or omit that might account for their statistical gender-salary difference? Some of the factors:

• Title or grade level within an occupation was not available to them. They could not account for differences between a research assistant and a professor, between a help-desk technician and a senior software developer. In my IT data, the functional job title alone accounts for more than 40 percent of the apparent gender salary difference. The latest Dice salary survey has a table with the gender comparisons. For the "manager" title, their more tightly defined middle manager function, females are actually paid slightly more than males.
• Without a title comparison, it is more difficult to account for "career management," that is, the speed up the career ladder.
• The data measure cost-of-living differences by only four regions of the United States, not by city size. For professionals, salaries in the early career years are lower in rural areas but higher in the largest urban centers. Women who follow their spouses to rural communities often accept and remain in lower-paying positions due to lack of choice.
• The AAUW data did not measure experience relevance or performance. Not all experience is valued the same. In the IT world, those with "hot" skills get paid more. Over time, the differences fade as the market increases the supply. Women appear to be less likely to move into new "skills" once established on a career track. Through the 1990s, females in IT also changed companies less frequently.

The AAUW report offered some excellent recommendations on career choices. Perhaps that should be the focus for leaders interested in narrowing the real gap in career earnings. For those with a more serious level of interest, download a free copy of the 45-page AAUW report at www.aauw.org/research/behindpaygap

Work force changes are upon us. For those of us in the IT world, this is our opportunity to lead on issues that have little to do with gender.

1.    Today's students are bright. Women have responded to the lack of hiring and perceived job insecurity in the well-paying technical and engineering fields and made other career choices. For IT, the shift is large. In 1999, a typical blended business and computer science college department had 500 juniors and seniors enrolled in the CIS major. Of those, 200 to 225 (40+ percent) were women. Today, that program would have only 150 students total, with fewer than 10 women (less than 10 percent). For the smaller programs in computer engineering and pure computer science, their enrollment is typically down 40 percent to 60 percent, and the percentage of women has dropped from around 20 percent in 2000 to 4 percent to 8 percent now. Our System i world has similar drops. Corporate America is just beginning to wake up to this shift. This is an outstanding time for women to pursue technical fields. School counselors, IT leaders, parents and mentors: Recommend these career choices.

2.    During 1999 and 2000, corporate America "begged" for more technology and engineering workers under threat of offshoring the work. Finally, in September 2000, Congress increased the number of temporary professional visas (H-1B) to nearly 200,000 annually, beginning with fiscal 2001. Half were used up by January 2001 and all were taken by May 2001. In the meantime, the same industry leaders began laying off thousands of American technology and engineering workers, and at an ever accelerating pace. It is not a surprise that college students, especially women, abandoned these professions.

The current 2007 immigration bill before Congress provides for an increase in the number of H-1B visas. The limit would rise from 65,000 currently to 115,000 plus numerous additional exemptions. If it passes in its present form, the technology graduates from the Class of 2008 and Class of 2009 will have much greater difficulty getting a job offer upon graduation. The underclassmen will continue to pick other majors, further diminishing the supply of talent. Professionals: Express your opinion to your Congressional representatives this week. There is still time. Legislators: Return the H-1B limit to 65,000.

3.    Employment as measured by the survey of larger businesses is up 5.2 million since the spring of 2001, according to the June 2007 data from the Bureau of Labor Statistics. In its alternate "household" survey, employment is up 10.8 million. Part of the difference is small business formation. Policymakers: Promote more entrepreneurialism.

4.    Iowa, and many other northern and central states, are in the midst of a K-12 school census decline, meaning fewer high school and college graduates each year. For example, based on current Iowa birth rates and net out-migration rates, plus aging and retirement trends, Iowa will be the first major state to hit a population and employment peak, coming about 2025. That is just 18 years away. Everyone who will be in the Iowa work force in 2025 has already been born! (It still takes 19 years, after all, to create a 18-year-old.) In the System i world, our "birth rate" for new workers has been nearly zero since 2001. Executives and IT leaders: Start preparing for the demographic shifts now by making your company the employer of choice.

5.    The new "Net generation" coming into the work force is more oriented toward non-work factors. This group saw their Boomer parents and relatives face layoffs at the beginning of the decade. More middle-tier positions were outsourced or sent offshore. Employers: Become creative with job flexibility, training, telecommuting, performance measurements, and related retention issues.

6.    The Boomers and Gen-Xers are at the forefront of the largest wealth transfer in history. For the first time, a significant portion of the work force is in a position to choose their work, even having the potential to choose to work for only 25 years. As a recruiter, I am increasingly hearing them tell me, "Nate, I want to go make a difference somewhere." Employers: Will they make that difference at your company?

Nate Viall is based in Des Moines, Iowa, and been recruiting AS/400, iSeries, and System i professionals nationally for 25 years. He can be reached at NateV@Compuserve.com or by phone at 515-274-3090.

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