Breaking news: this week was the announcement that the five original cast members of primetime’s number one show, The Big Bang Theory, are reportedly each taking a pay cut to fund raises for female co-stars Mayim Bialik and Melissa Rauch.
Jim Parsons, Johnny Galecki, Kaley Cuoco, Kunal Nayyar and Simon Helberg all make 1 million dollars per episode, whereas their long-time female co-stars are making $200,000. This altruistic and grand gesture means a raise to about $450,000 per episode for Bialik and Rauch, but that is far from parity. And, it also begs the question, should it be coming from the cast members instead of Warner Brothers? Since Bialik started on the show, she has earned four Emmy nominations. Rauch is equally important to maintaining the integrity of the show. Whether or not this particular pay gap is a question of gender pay inequality in Hollywood or a simple matter of costs and profits for Warner Brothers is not something we will answer today. For instance, Kaley Cuoco is paid on par with her fellow male leads.
The news about The Big Bang Theory led me to dig deeper in understanding the extent and pervasiveness of the gender pay gap. The most commonly cited statistic is that an American woman earns 79 cents for every dollar an American man makes. According to Wikipedia, the “gender pay gap in the United States is the ratio of female to male median yearly earnings among full-time, year-round workers. The average woman’s unadjusted annual salary has been cited as 78% to 82% of that of the average man’s.”
What I learned is that this isn’t exactly an apples to apples comparison. A common misconception for many is that women are getting paid 21 percent less for doing the same job. According to recent research from Glassdoor, study findings revealed an “adjusted” pay gap of 94.6 cents per dollar compared to men. The “adjusted” pay gap factors in differences in education, experience, age, location, job title, industry and even company. The fact that any “adjusted” gender pay exists is still outrageous and certain occupations still maintain a heavier “adjusted” pay gender pay gap.
The 94.6 “adjusted” gender pay gap, does however, explain encouraging articles like the one from Fast Company, which recently reported that millennial women will close the pay gap. It also explains why data from a 2013 Pew Research report, stated that today’s young women “are the first in modern history” to start their work lives at near parity with men. While this outlook is brighter it is nowhere near perfect. And the true imbalance lies with workplace parity and gender imbalance in leadership. But that is a post for another day.
Last year, American cloud computing company, Salesforce, made an internal pay audit for 17,000 employees, spending about $3 million to make salary adjustments for nearly six percent of its workers. This inspired Elon Musk, CEO of aerospace tech company SpaceX to announce a companywide audit to fix the gender pay gap. Apple announced last April that it had officially eliminated its gender pay gap.
According to BuzzFeed, Google reported that it constantly analyzes performance, compensation and promotion to ensure that there is no gender pay gap. The company also sets salaries based on market rate of the job (as opposed to the person’s last salary). This approach has been shown to reduce the gender pay gap. Tellingly because of this, women that join Google often see a larger pay increase than when men join. Amazon reports that it found no wage gap between women, men or the minorities it employs.
Smart employers will take note that about 9 in 10 employees (according to Glassdoor) believe men and women should be paid equally for equal work. No organization can risk not being able to recruit the best talent.
And brands beware. If you launch a campaign about female empowerment and engendering a new generation of strong female leaders, make sure your company is not just talking the talk, but walking the walk – with not only equal pay for equal work but with a strong representation of female leadership.