Young Women Outearn Men By A Mile For Awhile

Young women outearn their male counterparts by a mile. According to information from Reach Advisers published by The Wall Street Journal, “In 2008, single, childless women between ages 22 and 30 were earning more than their male counterparts in most U.S. cities, with incomes that were 8% greater on average.” In one city–Atlanta-the difference was 121%.

The reasons the report gives for the phenomenon are inadequate. Men have lost their edge in the job market as more women get college degrees. Men hold more blue-collar jobs which have been cut more than executive positions as the recession deepened. Women have begun to push-off the age at which they bear children.

The reasons for the trend may be much more basic and varied. They also change substantially as both women and men age.

Lawsuits by women to get equal wages have been appropriately successful. Analysts need to look no further than the huge class action suit against Walmart (NYSE: WMT) for pay discrimination. The suit, if successful, will affect tens of thousand of women. The legal system has begun to do what private enterprise did not–level the compensation playing field.

The unfortunate side of the pay picture for women is that companies recruit and put women into middle management jobs where they make as much as their male counterparts, especially in the ten or fifteen years after college. The situation changes swiftly as the two groups reach the point at which they can climb into upper management. The number of studies that show that women cannot make it into top jobs and onboards of directors are legion.  What appears to be a trend with promise when women are young is cut off as they move higher on the corporate ladder.

The period which the Reach Advisers survey covers is one in which many women do not have children. The refrain from human resources departments and executive suits is that once a woman has children they take themselves out of the race for better jobs. Even Jack Welch, the most famous CEO of the last quarter of the 20th Century, made this observation.

The Reach Advisers data show how badly a set of information can be skewed by the limits of its scope. Women may have a pay advantage for a brief period, but that advantage disappears when the real power and money are on the table.

Douglas A. McIntyre