Eh? How does this work?

Natasha Lamb, a managing director at investor Arjuna Capital, is using her firm’s position as a shareholder at American Express, Bank of America, Citigroup, JP Morgan, MasterCard, and Wells Fargo to pressure the firms to disclose how female employees’ pay stacks up against the men’s.
“We see gender pay equity as one of the structural barriers that’s keeping women from moving up the corporate ladder into positions of leadership,” she said.

If women are paid less then why would that limit, rather than promote, their progress up the management ladder?

26 thoughts on “Eh? How does this work?”

  1. Business offers every employee the least it thinks it can get away with.

    Women are often a combination of more desperate and less demanding. The left claims it is wrong to act on this fact. The left also claims that socialism works and Venezuela is a paradise.

  2. If similarly-skilled wimminz really did cost less than men, they’d be employed preferentially. Why pay more for the same performance?

  3. Dave, that’s exactly the problem with the woman’s argument.

    The low pay is not a barrier in itself. As Tim points out, why would it be? It can correlate with the true cause, be a sign of underappreciation, yes. But that makes it some degree of sexism, the argument is expressly framed as systematic discrimination by sex.

    Sexism can’t be solved by treating the symptom, the (perceived!) pay discrepancy.

    I suspect Ms Lamb is perfectly well aware her argument is nonsense, but is sailing close to the wind to get some good PR.

  4. Back when I was studying engineering, it was notoriously underpaid, which caused a lot of the best graduates to go elsewhere. Moreover, engineering companies used to pay graduates the same whether they were coming in to do HR or engineering, which they loudly trumpeted as an example of their “equality”, while simultaneously whining that they had a shortage of engineers.

    Eventually, reality knocked that shit out of them. But it was noticeable that as relative wages rose, so did the prestige of engineering, which attracted people more interested in working in it after graduation.

  5. Let’s say you have a man and a women at the same level, earning £25 and £20/hr respectively. It shouldn’t happen, but it does: perhaps the man negotiated better; perhaps two companies merged and they had people on different wages; but for whatever reason, we’re there now.

    Now you have to choose one person to promote; and a budget of £3/hr with which to do so. You have two choices:

    1) Give the £3/hr to the man. His wage rises to £28/hr; he’ll be happy; and as a bonus, the woman can no longer sue for wage discrimination.

    2) Give the £3/hr to the woman. Her wage rises to £23/hr. In her new position she has access to accounting systems, and she can see the wages of the people below her. She screams that she’s being paid LESS than her new underling. All hell breaks loose.

    So yes, a pre-existing wage gap can, in theory, be a barrier to promotion.

    More likely, management see that they can give the man a promotion without raising his wage at all, whereas they’d have to pay the woman at least £6/hr more. Again, promoting the person who already earns more is the rational choice (assuming two equal candidates).

  6. I’m trying to reconcile Natasha’s job of maximising her investors’ return with what she’s pushing for. Transparency of pay contracts could promote that then again it could not.

    I suppose it works if transparency brings down high earners demands more than it raises lower earners demands, with no impacts on retention and performance.

    Possibly it could do neither but harm morale, which once that effect was noticed would have to be addressed probably by giving more compensation.

    I suppose if she’s suggesting this approach to her board…she’ll have some research that bears the approach out. If she’s just doing it based on theory well then i guess she’s her own market experiment.
    Another thought – it could be the policy is attractive to ‘virtue’ investors ?

  7. Andrew

    So yes, a pre-existing wage gap can, in theory, be a barrier to promotion.

    But the assumption there is that the ‘higher grade’ deserves to be better paid. What if the ‘underling’ is the one generating the revenue, actually earning the cash?

    Should a female team leader in HR earn more than a male salesman selling millions of pounds of sales for the company?

  8. Anyway, as soon as you dig into these stories you find they are comparing women against men in not just different companies, but different jobs, different ages, even different sectors. It’s nonsensical.

  9. I’d expect that in highly paid corporate jobs women would be paid more than men, as follows.

    You are a firm that feels under political pressure to appoint more women to top jobs. Women’s distribution of IQ and other measurable psychological traits tend to be distinctly narrower than men’s. So, put bluntly, there are fewer very clever women around than very clever men. So market forces should end up with the very clever women being paid more than their male peers.

    A counter-argument would be that there are some traits where the standard deviation isn’t a big deal: what matter is whether the mean is very different for the two sexes. So if women tend to be distinctly better than men at something-or-other (fine motor skills is a well-known example) then market forces would not favour women in the direction discussed in the previous para.

  10. If you want to be PAID more you have to EARN more. If you want to EARN more you have to DO more. These people just want to be paid more without earning it or doing anything to earn it. Demands that 40-year-old person X with ten year’s experience be paid exactly the same as 40-year-old person Y with 20 years’ experience. Demands that person X who does 20-hours-value work be paid the same as person Y who does 40-hours-value work.

  11. Doesn’t really matter. Arjuna AUM appears to be $170m, apparently from <200 accounts. BOA free float is around $10b, total market cap around $230b.

    As a shareholder, Arjuna can control at most 17% of the free float, or the square root of sweet FA of the issued capital.

    It's about growing AUM from their preferred bunch of suckers.

  12. DMcD – I skipped over a figure of $1bn AUM , but either way a rounding in error in terms of an equity holding in a major bank or for AUM of even a niche asset manager, ie they are an outfit for cranks, arseholes and badly-run very small public sector pension schemes.

    So anything Arjuna says is like your granny complaining that M&S – in which she has 3 shares – sells saucy pants.

  13. Dearieme>

    “Women’s distribution of IQ and other measurable psychological traits tend to be distinctly narrower than men’s. So, put bluntly, there are fewer very clever women around than very clever men.”

    That turned out not to be true.

  14. Er, because it would be a sign that women are being underappreciated, obviously.

    Only if people know.

    Most workplaces no-one knows what other people earn.

  15. @ Dave
    It *is* true. Men’s IQ has a much larger standard deviation than women’s. There are a handful of brilliant women (e.g. my little sister) but I have never met a woman who was as good at my job as I am – and I used to claim that I was the family dunce. All the most intellectually-demanding professions are do9minated by men, while women dominate HR and typing.

  16. Intellectual activities such as chess suggest there is a difference between men and women. The current highest ranked woman doesn’t make the world top 120. There has NEVER been a woman capable of challenging the top men. Lame whines about it being “cultural or something” fail in the face of Chinese and USSR/eastern European countries’ traditions.

    Activities where men’s natural physical advantages are negated are the same. Darts, snooker and so on. The money is there. If a woman could take on the men the public would love it.

    So there are differences in the ways the brains operate. To deny it is pointless.

    Maybe it is all a conspiracy by evil capitalist men to mould the world to fit what they are good at. Who cares?

    At the end of the day it is all about shagging. And being a successful bloke gets you more shags than being a leftie bloke who oozes sympathy for feminists.

  17. For non-chess-players (I’m not good, just a former member of the school and, later, the office team) I should mention that Judit Polgar qualified as a Chess Grandmaster slightly younger than Bobby Fischer did! She got to a peak rating of #8 in the world before she retired.
    She proves that it is possible for women to be good at chess, while it is very rare. Someone will doubtless correct me but I think her sister was the next-best female player.
    Among the peak performers men outnumber women by something like 50 to 1, but that means that there will be the occasional, very rare, female top performers.

  18. As I said. There has never been a woman capable of challenging the best men. The strongest woman of all time never got into the contemporary top 5. She is the only female to ever get an ELO rating above 2700. There are currently 40+ men with 2700+.

    It proves that one woman once got into the top 10 in an activity where men should have no advantage at all if their brains work in the same way as women’s.

  19. I was once good enough to be playing Nigel Short but nowhere good enough to beat him (or even make it difficult for him to beat me).

  20. Is IQ as important as cunning.
    The great tyrants – Hitler, Mao, Stalin etc didn’t need a high IQ. But they got to the top. (And were all men). Much the same in crime really.

  21. At the end of the day it is all about shagging.

    That’s where the programming and the reality differ. We’re programmed that it’s all about the shagging but it’s actually all, in the end, about having (grand) kids.

    Another arena where evolution simply hasn’t caught up with modern mores and technology.

  22. In order to attract a desirable mate, men must compete with other men for their rank in the male dominance hierarchy, and this translates into men contesting each other for positions within the workplace. There is no parallel for women.

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