A social experiment shows women may be as likely as men to accept a gender pay gap if they benefit from it

business meeting
Most women still make $0.84 on the dollar of what men earn.

  • Marlon Williams is an assistant professor of economics at the University of Dayton.
  • In a recent experiment, he found women were as likely as men to vote against closing the pay gap when they earn more money.
  • Williams hopes this research will lead people to consider how self-interest may be driving their arguments.
  • See more stories on Insider’s business page.

The big idea

Women are just as inclined as men to vote against a policy to reduce a gender pay gap if they are personally benefiting from the status quo. This is one of the main findings of my new study, which was published in January 2021 in the journal Applied Economics Letters.

I conducted a series of laboratory experiments in which I recruited participants to do a 30-question quiz. The participants knew from the start that they would be paid based on the number of questions they answered correctly. In roughly half of the sessions, the quiz was written in a way to give men an advantage. I achieved this by choosing questions that were mainly on topics that surveys show men tend to be more interested in than women, such as sports and certain movie genres. The quiz for the other half of the sessions were designed in a similar way to give women an advantage.

In the version with a male bias, men answered an average of 21 questions correctly, while women answered only 13 right. This was meant to mimic the current real-world situation in which men, on average, earn more than women. The questions were carefully chosen so that the quiz that favored women had mirrored results: The average woman answered 21 correctly, the average man just 13.

Read more: I moved to the Alaskan Bush to become a teacher after COVID-19 ruined my plans. It’s wildly expensive, but I feel at home in my village of 270 people.

Three times at different stages of the experiment participants voted to either be paid $1 for every correct answer or to give the group that was at a disadvantage a leg up. If the second payment option won the majority vote, the disadvantaged participants would get $1.25 per right answer, while those who benefited from the biased test would receive just 85 cents.

In all three votes, which had similar results, I found that women were actually more likely than men to vote against the policy that would have led to a narrowing of the pay gap when they earned more money in the quiz. On average, 96.8% of women’s votes were against the proposed corrective payment policy when they were more likely to correctly answer the questions, compared with 90.5% of the men’s votes when they had the edge.

In addition, when women were at a disadvantage, they were more likely to vote in favor of the corrective policy, with 79.5% supporting it versus 73% for the men.

While social science laboratory experiments like mine cannot fully capture every nuance, I believe my qualitative results are similar to what we would find in the real world.

Why it matters

Debate over the gender pay gap can become quite heated.

The latest data from Pew Research Center show women make $0.84 on the dollar of what men earn – a gap that hasn’t changed much in recent years.

And surveys have found that men are more likely to oppose measures to correct this gap and even question whether the gap exists in the first place. A 2019 SurveyMonkey poll showed that 46% of men believe the gender pay gap “is made up to serve a political purpose” rather than a “legitimate issue.”

My research suggests women might feel the same if the positions were reversed. Additionally, it suggests that men would also likely be equally vociferous in calling for a narrowing of the gap if they found themselves in a world where they were holding the short end of the stick.

Ideally, I hope this research will lead people to reexamine the positions they hold on issues like this one and consider how self-interest may be driving their arguments. Maybe it can lead to more understanding and increase the focus in these debates on the available evidence.

What’s next

In my current and future work, I seek to experimentally determine people’s willingness to sacrifice personal financial gains in favor of an outcome that they see as serving the common good. This involves, for example, testing how much income the average employee or executive is willing to sacrifice to reduce income inequality.

Marlon Williams, assistant professor of economics, University of Dayton

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Google is facing a class-action lawsuit over claims it paid female employees nearly $17,000 less per year than male staff for the same work

Google CEO Sundar Pichai speaks during the Google I/O 2016 developers conference in Mountain View, California
Google CEO Sundar Pichai speaks during a developers conference.

  • Former female Google staff won class-action status for a gender equity lawsuit against the company.
  • The four women alleged that Google paid female staff nearly $17,000 less per year than the men.
  • The claimants represent 10,800 women who claim Google pays women less than men for the same job.
  • See more stories on Insider’s business page.

Google on Thursday suffered a setback as a San Francisco state judge awarded class-action status to a lawsuit over unequal pay between men and women for the same work, Bloomberg first reported.

The lawsuit was first filed by four former female workers at Google in 2017. In it, the women allege that Google violated California’s Equal Pay Act “by paying female employees lower compensation than Google pays to male employees performing substantially similar work.”

A previously disclosed analysis seen by Bloomberg showed that the case seeks more than $600 million in damages.

The women represent around 10,800 women employed by Google who claim that the company pays men more for doing the same job, according to a July court filing. The court filing said that the search engine company paid female employees around $16,794 less per year than “the similarly-situated man.”

“Google paid women less base salary, smaller bonuses, and less stock than men in the same job code and location,” the July filing said.

“We strongly believe in the equity of our policies and practices,” a Google spokesperson told Insider. “For the past eight years, we have run a rigorous pay equity analysis to make sure salaries, bonuses and equity awards are fair. If we find any differences in proposed pay, including between men and women, we make upward adjustments to remove them before new compensation goes into effect. In 2020 alone, we made upward adjustments for 2,352 employees, across nearly every demographic category, totalling $4.4M. We also undertake rigorous analyses to ensure fairness in role leveling and performance ratings.”

Kelly Dermody, a lawyer representing the women, said in an email to Bloomberg that the next step is getting the case to trial which could happen in 2022.

“This is a significant day for women at Google and in the technology sector, and we are so proud of our brave clients for leading the way,” Dermody said. “This order shows that it is critical that companies prioritize paying women equitably over spending money fighting them in litigation.”

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Amazon is hiring 5,000 new employees in Germany, with some roles paying up to $82,000 per year

This picture shows the logo of US online retail giant Amazon at the distribution center in Moenchengladbach, western Germany, on December 17, 2019.
The company recently expanded its logistics empire to cope with rising demand over the holiday season.

  • Amazon will hire 5,000 more permanent employees in Germany in areas from shipping to marketing.
  • In a press release, the company said it encouraged applications from those seeking job security.
  • Entry-level Amazon logistics wages range from $13.25 to $14.90 per hour but are location-dependent.
  • See more stories on Insider’s business page.

Amazon already has 23,000 employees in Germany but is now looking to add more people to its workforce.

The delivery giant said in a press release on Friday that it would hire another 5,000 staff in areas from shipping to marketing.

Most Amazon employees work in logistics, where entry-level wages range from $13.25 to $14.90 gross per hour depending on the location. Germany’s current minimum wage is $11.14 per hour but will rise to $12.26 by July 2022.

At its logistics center in S├╝lzetal near Magdeburg, the minimum is $13.92 per hour; in Koblenz, it is $14.19; at the air freight handling facility in Leipzig it’s $15.83. Wages automatically rise after 12 and 24 months.

After two years, employees earned an average of around $3,500 gross per month including restricted employee shares, according to Amazon. There were bonus payments and other benefits.

It hasn’t been an easy year for the German branch of Amazon, with workers striking in June over rising COVID-19 infections at the company and again in October after their COVID-19 bonus payments were scrapped.

German trade union Verdi called for a four-day strike at Easter to demand a pay rise for workers in the retail and mail-order sectors. Amazon has also been subjected to an antitrust investigation over relationships with its third-party sellers in Germany.

In its press release, Amazon said it was calling for applications from those worried about the future of their jobs and was recruiting from a wide range of sectors.

Amazon Logistics Center
Amazon has 15 logistics centers spread across Germany.

“This is a great opportunity for career changers because we are open to a wide range of talents and qualifications,” said Amazon Germany country manager Ralf Kleber.

The company’s German headquarters are located in Munch while its research and development center is in Berlin. There are also a total of 15 logistics centers spread across the country.

Amazon itself does not provide any information about the salaries offered to employees in other sectors. According to employer rating portal Kununu, customer service employees earn about the same as their colleagues in warehouse and shipping.

Kununu’s data showed an account manager at Amazon earned almost $67,000 per year while a marketing officer earned around $62,000 and a human resources officer around $60,000.

According to Glassdoor, software engineers earn significantly more with a salary of over $82,000.

The company recently expanded its logistics empire to cope with rising demand over the holiday season and its delivery service could be worth up to $230 billion by 2025, according to Bank of America estimates.

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Closing the global gender gap will take an extra 36 years due to the impact of the pandemic, the World Economic Forum said

Hundreds of women gather in Russell Square for the Women's Strike Assembly on International Women's Day on 8th March 2018 in London, England, United Kingdom.
Hundreds of women gather in Russell Square for the Women’s Strike Assembly on International Women’s Day on 8th March 2018 in London, England, United Kingdom.

  • Closing the gender pay gap will take an extra 36 years, the World Economic Forum said Tuesday.
  • The prediction has climbed from 100 years to 136 years because of the impact of the pandemic.
  • 5% of all employed women lost their jobs during the pandemic, compared with 3.9% of employed men.
  • See more stories on Insider’s business page.

Achieving global gender parity will take an extra 36 years because of the coronavirus pandemic, a World Economic Forum (WEF) report said.

Previously, the WEF estimated that the gender pay gap could take around 100 years to close. It’s now increased its prediction to nearly 136 years.

“Preliminary evidence suggests that the health emergency and the related economic downturn have impacted women more severely than men, partially re-opening gaps that had already been closed,” the report said.

The WEF calculated worldwide gender parity through economic participation and opportunity, political empowerment, health and education across 156 countries.

It will take around 146 years to attain gender equality in politics, and 268 years for men and women to get the same salary for similar work, the report said. It added that the data doesn’t yet fully reflect the impact of the pandemic, which could extend the gaps further.

Gender parity has improved in the education sector, taking another 14 years to completely close, and the gap in health between men and women will take a similar amount of time.

The WEF report cited the International Labour Organization (ILO) that said 5% of all employed women lost their jobs during the pandemic, compared with 3.9% of employed men. There was also a decline in hiring women into senior positions, according to LinkedIn data.

“There is a persistent lack of women in leadership positions, with women representing only 27% of all manager positions,” the report said.

Sectors such as cloud computing, engineering, data and AI are more likely to have gender gaps as the uptake of women for these kinds of jobs is fairly low, the WEF added.

Read more: Here’s how to find out if you’re underpaid at work, and the exact script to use when asking your boss for a salary increase

WEF managing director Saadia Zahidi wrote in the report: “The hardest-hit sectors by lockdowns and rapid digitalization are those where women are more frequently employed.”

“Combined with the additional pressures of providing care in the home, the crisis has halted progress toward gender parity in several economies and industries,” she said.

Zahidi added that she hoped the report would be a “call to action” for countries to focus on gender equality in the post-pandemic recovery.

According to data from the Bureau of Labor Statistics, average weekly earnings for men who were older than 16 and working full-time was $408 compared to $251 for women – that’s 61.5% of a man’s weekly earnings. This has increased to 81.7% in the third quarter of 2020.

Insider reported in March that the gender wage gap in the US varies widely by state, city and race, with Black and Hispanic women facing the largest pay gap in comparison to non-Hispanic white men’s earnings.

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Warren Buffett’s annual salary has been $100,000 for 40 years. Here’s a look at the billionaire investor’s unique compensation.

warren buffett
Warren Buffett.

  • Warren Buffett’s annual salary has been $100,000 for the past 40 years.
  • Berkshire Hathaway spends triple that amount on his security each year.
  • Buffett owns about $100 billion of Berkshire stock and lives modestly.
  • See more stories on Insider’s business page.

Warren Buffett is a legendary investor, leads one of the world’s biggest companies, and has ranked among the world’s wealthiest people for decades. Yet he earns a modest annual salary of $100,000 – and hasn’t had a pay rise in 40 years, SEC filings show.

As Berkshire Hathaway’s CEO and chairman, Buffett recommends to his board of directors how much he should be paid, and decides the the rest of the executives’ compensation. The 90-year-old has received $100,000 a year since 1980 – a fraction of the $15 million average pay of S&P 500 CEOs in 2019.

Buffett doesn’t earn much from other sources either. He netted double his salary in annual directors’ fees in the 1990s and early 2000s, before he resigned as a director of The Washington Post Company and stepped down from other corporate boards.

The highest total compensation he’s ever received at Berkshire was $525,000 in 2010, comprising his $100,000 salary, $75,000 in directors’ fees, and $350,000 allocated to his security costs.

Berkshire spends far more on Buffett’s personal and home security than it pays him directly. Keeping the boss safe has cost the company an average of $339,000 a year since 2008, or $4.4 million in total.

Buffett isn’t in desperate need of a big salary. He owns roughly $100 billion of Berkshire stock – which he’s gradually giving away – and doesn’t spend much: he lives in a modest family home, drives a basic car, and eats breakfast at McDonald’s.

The investor also doesn’t use a company car, belong to any clubs where Berkshire pays his dues, or commandeer company-owned aircraft for his personal use.

Buffett shared his views on salaries at Berkshire’s annual shareholder meeting in 2017, when he was asked how much his successor would be paid. He expressed hope that the next CEO would already be rich, and wouldn’t be motivated to earn 10 or 100 times the money their family needs to live on.

“They might even wish to, perhaps, set an example by engaging for something far lower than, actually, what you can say their true market value is,” he continued, adding it would be “terrific” if that was the case.

Buffett is a firm believer that CEOs should be incentivized to deliver long-term success for their companies. He believes massive annual salaries, bonuses, and short-term stock options encourage short-term thinking.

Charlie Munger – Buffett’s right-hand-man and Berkshire’s vice-chairman – has followed Buffett’s example. He’s also received a salary of $100,000 a year for several decades now, SEC filings show.

In contrast, Ajit Jain and Greg Abel, who head up Berkshire’s insurance and non-insurance divisions respectively, are paid far more handsomely. Both men have earned a $16 million salary in each of the past of three years, plus total bonuses of $7 million each.

Finally, Berkshire’s finance chief, Marc Hamburg, has seen his salary grow from about $300,000 in 1996 to $3.3 million last year.

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