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The Surprising Key to Closing the Gender Pay Gap

March 12, 2014
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The Surprising Key to Closing the Gender Pay Gap
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The loosening of traditional office hours not only increases productivity but levels the paying field, too.

Dr. Claudia Goldin has a novel solution for the pesky pay gap that persists between men and women, and its benefits could extend well beyond the workplace.

Goldin, a Harvard University economist, hypothesizes that if companies allow employees to work flexible schedules and reward them based on what they actually accomplish — not the hours they toil away in the office — the pay gap between men and women will be whittled away. “The gender gap in pay would be considerably reduced and might even vanish if firms did not have an incentive to disproportionately reward individuals who worked long hours and who worked particular hours,” she writes in a study published in the American Economic Review. To boil it down, according to Goldin’s extensive research, the wage gap isn’t just about gender. It’s about time. Literally.

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The oft-cited statistic about the gender gap is that a woman earns 77 cents for every $1 a man makes. This, of course, doesn’t account for the fact that women often choose lower-paying careers. They also choose to leave the workforce at certain points — many times due to family responsibilities — meaning that they actually have less work experience than men when they get into the latter part of their careers, as Derek Thompson points out in The Atlantic. Still, when you adjust for all those variables, a wage gap of around 9 percent persists. Goldin argues that this isn’t due to straight-out discrimination, but rather, hours worked.

Say a woman and a man are up for a promotion in a corporate job. They have similar qualifications and are equally strong candidates. The only thing that distinguishes them is that the man logged more hours overall because the woman took maternity leave or stayed home with a sick child from time to time. Because of these common scenarios, men often end up getting the promotion simply because they have spent more time working. It’s not exactly fair, but it’s not unfair either, given that they have equal qualifications.

Instead of focusing on the standard 9-to-5 (and then some) workday, which has been the norm for generations, Goldin suggests that companies give their employees more autonomy, allowing them to create schedules that work for their lifestyles. In order to do this, Goldin recommends a pay-per-hour policy, which has been proven to lessen the wage gap between male and female workers. For example, pharmacists are paid in a “linear” fashion, meaning that men and women on the same level get paid the same amount. The more hours they work, the more they get paid, and vice-versa. There’s no cultural penalty for leaving work at a normal hour to get dinner on the table. Coincidentally, this profession boasts some of the lowest gender pay gaps among high-earning occupations.

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Of course, it’s not easy to change work culture, especially in corporations where face time is often considered more important than actual productivity. However, flexible work schedules can lead to a range of positive results beyond lessening the gender pay gap. It encourages telecommuting, which cuts down on a company’s operations costs, reduces traffic (a bonus for the environment), and increases productivity. Working too many hours is also proven to increase stress, reduce productivity and decrease overall happiness. Not to mention the fact that many people work extra hours without extra pay. Work flexibility will not only help even out the wage gap, but could also breed happier, healthier employees. Who wouldn’t want that?

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