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Embedded in a new research paper (PDF) by Harvard economist Claudia Goldin is a valuable piece of news for anyone who is frustrated by the stubborn persistence of the gap in earnings between women and men. It has long been held that women earn only $0.77 for ever dollar that men do, in large part because of discrimination. But, Goldin argues, most of the difference comes down to factors that have nothing to do with sexism: The number of hours a person works and the degree of job flexibility.

This means that companies offering true, stigma-free flexibility and linear compensation-meaning the same pay per hour worked, regardless of when it is worked-have the lowest gaps in pay between men and women-and, in many cases, more women employees overall.

All that's left is for corporate America to do something about it.

"The gender gap in pay would be considerably reduced and might vanish altogether if firms did not have an incentive to disproportionately reward individuals who labored long hours and worked particular hours," Goldin writes in "A Grand Gender Convergence: Its Last Chapter." "Such change has taken off in various sectors, such as technology, science, and health, but is less apparent in the corporate, financial, and legal worlds."

The last 100 years have seen huge shifts in the numbers of women and men in the workplace, the number of hours they work, the majors they pursue in college and the number of college degrees they obtain. In general, all those things have converged for the genders. The amount they are paid has converged as well, with the ratio of what women earn to what men earn increasing from a little more than half in 1980, according to Goldin, to nearly three-quarters in 2000. Today it sits at 77 percent. Notably, it has moved little in the last decade.

Part of the gap, Goldin says, can be explained by differences in education and experience, but the residual, unexplained portion remains and is often attributed to outright discrimination. Goldin suggests that it's really about flexibility, which is much easier to address. This explains why the gap gets bigger as workers age, as women are severely penalized in terms of earnings and advancement for taking time off when they have children; even short breaks come at huge cost. Individual men are penalized, too, though fewer have traditionally taken significant time off for parenting.

It won't come as a shock to learn that Goldin singles out law and finance as two of the most rigid-and consequently, worst-offending-fields. She finds (PDF) that the earnings of MBA students are almost the same right out of business school; 16 years later, the women are making 55 percent of what the men earn. Two-thirds of the penalty comes from taking any time out at all.

In law, the trend is similar, exacerbated by the fact that lawyers who work more hours tend to bill higher hourly fees, showing how intertwined the idea of long hours is with value in the legal profession. In pharmacies, by contrast, compensation is completely different and is generally the same, regardless of number of hours logged. Women now represent 55 percent of all pharmacists and 65 percent of new entrants in the field.

The solution, Goldin posits, is for companies and industries to embrace true flexibility, let go of outdated notions of face time, and focus more on results, rather than precisely where or when the work was done.

As Bloomberg Businessweek has shown, men are increasingly the ones demanding more flexibility and balance in their lives. A Pew study last year found that 50 percent of working fathers found it difficult to balance their family demands, compared with 56 percent of working mothers. This is something that Ernst & Young sensed was happening after they studied the issue several years back. The firm conducted a study of younger workers and found that flexibility was their most important "non-cash" priority, then went about designing its benefit programs accordingly. The firm offers paid parental leave to both men and women, full benefits to employees working part-time schedules, and generally encourages a culture of accommodation.

As a result, the gap between men and women leaving Ernst & Young has disappeared, and the number of female partners has gone from 3 percent to 20 percent. "It's been a competitive advantage for us," says Karyn Twaronite, an Ernst & Young partner and the firm's Americas Inclusiveness Officer. "More of our programs are more about fixing the environment, rather than fixing the women -- flexibility for all, women and men," she says. "Everyone who works here wants meaningful personal lives and professional lives. Whether you're a working parent, it's still incredibly important."

Sheelah Kolhatkar is a features editor and national correspondent for Bloomberg Businessweek. Follow her on Twitter @Sheelahk.

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9 Comments

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timkinetron

theres the problem, most jobs require people to work together ( be at the same place or be available at the same time) companies are becoming more and more flexible over the years but to tie this to a solution for the percieved inequality argument..... yuck

March 05 2014 at 10:05 AM Report abuse rate up rate down Reply
prnyl

So the hours a person works, or work ethic as most like to call it, impacts more than anything else as to the disparity- so are women here pining for getting more for not working as many hours?

March 04 2014 at 8:14 PM Report abuse +1 rate up rate down Reply
Ken

As a Social Worker -
I worked 7 years with two ladies my age with new children. Time after time I got "I gotta go take my daughter to grandma's or to diving, or band, or scouts, or buy clothes, you can cover for me for an hour, half hour etc. Or late in the morning, and both have good husbands and nearby mothers. My daughter/son had (name of illness) and I had to get him settled so you can cover for me - Right?

I often put in more time to cover their work load, did they cover my work load the few times I was sick. No, it was neatly piled up. They did pile it up neatly, and if it got to big for my in box, they did hide it in my desk drawer so the boss would not get mad.

Oh, I should point out, I am married to, to a wonderful lady. But that was forgotten easily. If the company needed someone to work overtime and stay till 6 or so they would stare at me, and wait me out. I had a birthday party one mid week night, and said no. I was snubbed the next few days, and made to feel their displeasure.

Overall they were enjoyable to work with, they were happy, as was I in general, but they just assumed I would give in, shut up, and do the extra work. They could have at least asked, or bought me a lunch once in a while.

March 04 2014 at 6:35 PM Report abuse rate up rate down Reply
owenpoole17

What am I missing here? The workers who put in more hours and are more flexible(and therefore, valuable) get paid more. Whether you are talking hourly or salary it's obvious that this is a fair pay scale.

Alternatively, we could just give people more for doing less. It's a ridiculous notion.

March 04 2014 at 4:44 PM Report abuse +1 rate up rate down Reply
skeeter4097

Strange, there apparently were no feminists on board the Titanic demanding equal rights to remain on board with the men.

March 04 2014 at 1:17 PM Report abuse +1 rate up rate down Reply
ralpmg

So the more hours you work the more you get paid. There advise to end this. Thats great as long as i could work less hours and keep my pay also

March 04 2014 at 1:05 PM Report abuse rate up rate down Reply
1 reply to ralpmg's comment
dragondancer1814

Tell that to a stay-at-home mom! Her workday starts as soon as her feet hit the floor and doesn't end until she goes to bed-unless the kids get sick, in which case she's up all night! She sacrifices literally EVERYTHING for her family, and the closest she gets to a paycheck is the loose change in the pockets or between the couch cushions (unless someone else beats her to it).

How is she supposed to feel that her job is worth something when she not only doesn't get paid, but also is made to feel like an "unperson" by society with insults such as "What do you DO all day?" or "When are you going to get a REAL job?"

Anyone who's spent time dealing with the kids, the nonstop housework, or both can tell you that being a SAHP IS a real job and deserves some form of financial compensation!

Why is it that when housework, yard work, child care, etc. are outsourced they're all considered paying jobs, yet when a stay-at-home mom does all that and MORE, she's not worth a plugged nickel?

March 05 2014 at 8:57 AM Report abuse rate up rate down Reply
chrispnet

If there is no bias, then why is there a goal to eliminate the value-based compensation.

Frankly, this study supports what many have long known. Aggregates mask individual choices.

March 04 2014 at 1:03 PM Report abuse rate up rate down Reply
mml

Good. Then let's get equal on child custody and child support, too.

A man should have equal custody and not pay more in support than an ex wife, even if he earns less than she does.

Honestly, this gender gap stuff is becoming ridiculous. There are no effective men's advocacy groups in this U.S., and I"m shocked and surprised we men aren't doing more to change this. Meanwhile, females from birth through their entire lives benefit at all levels from an active complement of women's advocacy groups protecting their interests, often at the expense of men.

Time to reach true parity. Things are quite in favor of women on virtually all fronts these days. And, I'd suspect that payscales are indeed equal. Equal pay for equal work. Working men are working more hours than women...so SHOULD be paid more for their time.

March 04 2014 at 12:00 PM Report abuse +7 rate up rate down Reply
lklex

Is anyone in the federal government or in the private sector genuinely committed to achieving gender equity and to eliminating de jure sex discrimination in employment-related matters? If so, what specifically has been done or advocated for narrowing the enormous gender gap ("chasm" is actually the more apt word) in serious workplace injuries and workplace fatalities, with men accounting for a whopping 92% of workplace fatalities in America? What has the been done toward ending the flagrant de jure sex discrimination of the federal government's having had, for more than ninety years, a Women's Bureau, at the U.S. Department of Labor, to help promote safe working conditions for women, without a corresponding Men's Bureau? There is simply no sound legal argument for reconciling that government-created sex discrimination with the notion of equality of rights under the law or the principle of equal protection of the laws enshrined in the U.S. Constitution.

March 04 2014 at 11:17 AM Report abuse +3 rate up rate down Reply
1 reply to lklex's comment
hegdiamond

Exactly. One item the author fails to mention that accounts for the remainder gap after figuring in hours, etc.. is that jobs that require danger and risk of life and limb usually pay more. Where are all the women lining up for these jobs? How many women are asking for jobs working in 20 below weather or searing heat in the summer? Or on oil rigs in the gulf or fixing electric lines after blizzards or storms? Men are willing to take on these tasks and deserve to get paid accordingly. Also, where is the mention of being able to work part time and less hours because many women also receive alimony and child support (many times bloated so a lot is like alimony)? If we account for all the alimony payments and some child support payments as income, I'm sure combined with the dangerous work and longer hours, the gap would be eliminated if not shift over to women making more. You can see this in single childless women under 30 where women far out-earn men especially in big cities. Where is the author calling for fixing that gap? You never hear anything about a pay gap when women benefit. As long as women trump men, such as in non-STEM vocations- like pharmacists, medical schools, teaching, nursing and other areas women are now controlling, all is fine. If men are ahead in anything, like STEM, there must be something wrong and affirmative action will be put in place to fix it until women supersede.

March 04 2014 at 12:03 PM Report abuse +1 rate up rate down Reply