I enjoyed interning with six other males in a team. But do women in general have such positive experiences?
This past Sunday, social media outlets such as Twitter, Facebook, and Instagram were abuzz with the hashtag #InternationalWomensDay. Posts that empowered women, as well as those noting shortcomings regarding gender equality, were ubiquitous. As someone who is “accused” of being a feminist, I found the existence and widespread celebration of such a day to be quite telling of the current state of our society, especially in the business setting. Since I am pursuing a career in this sphere, I often analyze the role women play in corporate America and how they are treated relative to their male counterparts in order to get a sense of what is in store for me.
The equal ratio of men to women here is not an accurate depiction of the corporate world. Indeed, since The Apprentice is a reality show, many aspects of business on this show were watered down or inaccurate.
Business in America is notorious for being dominated by males. Indeed, women are painfully underrepresented, especially in executive roles. In the financial services industry, less than 20% are board directors; none are CEOs. These statistics only serve to reinforce the stereotypical image of a boardroom filled exclusively with scheming, unctuous males eager to dominate the world through any and all corrupt means.
A CEO of a NASDAQ behemoth who is a women and is under the age of 40? Marissa Meyer is breaking barriers and is inspiring a future generation of female leaders.
Of course, there are outliers who serve as my inspiration. Sheryl Sandberg is the Chief Operating Officer of Facebook; Marissa Meyer is the president and CEO of Yahoo; Tory Burch is the founder and CEO of her namesake company. Each plays a leading role in successful, established companies that are always reported in the news. Unfortunately, since so many more men hold top positions, the female presence is overshadowed.
This past summer, I heard from Lilach Asher-Topilsky (second from right), the CEO of Discount Bank in Israel.
In other progressive Western societies, the issue of female under-representation does not pose quite as big a problem. When I was in Israel, I noticed an even representation of men and women in positions of power. The ratio of male to female CEOs is about 1:1. Seeing a female CEO, I was told, was not that uncommon. I was taken aback by this cavalier attitude, especially when I discovered that most female CEO’s also had multiple children. In their society, there was not such a significant tradeoff between being in a position of power and being a caretaker for a family.
Angela Merkel is in a powerful position as Chancellor of Germany, the largest economy in Europe.
Unlike the de facto equal representation in Israel, Germany now embraces a de jure approach to ensure gender equality in business. Last week, their lower parliaments passed legislation that requires companies to allocate 30% of seats on corporate boards to women. This is a major shakeup for the corporate climate in Europe, which has been historically dominated by males. It is also notable that Angela Merkel, the female Chancellor of Germany for the past decade, was the one who backed this legislation; as a woman in charge, she promotes female leadership in business, too.
Choosing to pass the Lily Ledbetter Act as his first upon taking office, President Obama highlighted the issue of wage discrimination.
In addition to suffering from a dearth of women in top corporate positions, America is plagued by wage discrimination. The female to male earnings ratio is about 0.81; for every dollar a man earns, a female earns $0.81. While this disparity may not seem like much, it translates into discrepancies of thousands of dollars. Time and time again, we see instances of women being paid less than their male counterpart for having the same position. Indeed, this issue gained national attention when President Obama, in his first act as president, passed the Lilly Ledbetter Fair Pay Act, which extended the time period in which claimants can bring pay discrimination claims against employers.
As the graph depicts, the supply curve shifts left, from S1 to S2. This causes to equilibrium price to rise.
The government attempts to actively close the wage gap through various forms of legislation. Their intervention, though, is not guaranteed to be effective, as it can be undermined by public sentiment and ultimately backfire. According to economics, there is no need to get involved because wage equality will occur naturally, through the workings of an efficient market. Since a wage gap means that women are cheaper labor than men, firms will choose to hire the former. Over time, there will be a decreasing supply of females. On a graph, this translates to a supply curve that shifts left. Consequently, the equilibrium price increases, and the issue of wage disparity disappears.
Of course, a major shortcoming in depending on the invisible hand that Adam Smith says guides the free market is that there is no way to determine how long it takes to achieve equilibrium. A change in preference for only female workers is determined by society and therefore unpredictable. Legislation is equally fallible because it takes years to take effect.
Hiring the best candidates and paying equally, no matter their gender, will mean that best, most efficient ideas will emerge.
Women may play a smaller role in in business and finance, but they ultimately have a tremendous impact. Bringing a new perspective to the table, and being able to appeal to a demographic that comprises half the globe, is invaluable to even the most misogynistic of businessmen. At the end of the day, it is not a matter of being a feminist or not, but simply about finding a way to maximize profits.
