Mellody Hobson talks about women and money on today’s “Money Mondays” segment.
I know we touched on this last month when we talked about a survey that found women are becoming more and more financially savvy and as a result are investing more to meet their goals. But today, I want to delve deeper into the “pay gap”—why it’s still there and what it means for our economy.
What is the current gender pay gap?
On average, women in the United States today are paid 77 cents for every dollar paid to men. That’s staggering and a number that has barely budged in over a decade.
Why are women still making less than men?
There are a few reasons. First, there’s the issue of less women at the top earning high-paying salaries. This ties into the “drop-out story” of women leaving the workplace to raise children. Second, women struggle with salary negotiations—partly out of fear of being negatively labeled. If a woman advocates for more money, she is seen as overly aggressive and self-centered, while a man is seen as going after what he wants. Third, there is the theory that women consistently undervalue themselves economically. Sheryl Sandberg mentions this in her book “Lean In.” Time and again, women look for opportunity advancements rather than financial compensation when moving up the corporate ladder. Sheryl also points out that women are often less liked as they climb the ladder than men. Because people are promoted based on not only competence, but also likeability, this can put women at a distinct disadvantage.