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WOMEN IN MANAGEMENT:
ARE THEY BREAKING THE GLASS CEILING?

TESTIMONY OF CHRISTINE STOLBA

Senior Fellow, Independent Women's Forum Before the Committee on Government Reform Subcommittee on Government Efficiency, Financial Management, and Intergovernmental Relations U.S. House of Representatives Washington, DC

April 22, 2002

Mr. Chairman and distinguished members of the Subcommittee, good morning. I am honored to have the opportunity to testify on the issue of "Women in Management: Are They Breaking the Glass Ceiling?"

My name is Christine Stolba, and I am a senior fellow at the Independent Women's Forum. The Independent Women's Forum is a non-profit, non-partisan organization dedicated to research and public education on policy issues concerning women. The Independent Women's Forum neither solicits, nor accepts government funds. Pursuant to House Rule XI, clause 2(g)(4), I confirm that IWF has at no time received any federal grant, contract or subcontract.

My testimony is drawn in part from two books about women's economic progress that I have written with my co-author, Diana Furchtgott-Roth: Women's Figures: An Illustrated Guide to the Economic Progress of Women in America (AEI Press, 1999) and The Feminist Dilemma: When Success is Not Enough (AEI Press, 2001).

The Wage Gap and the Glass Ceiling: Do They Exist?

The existence of a wage gap and a glass ceiling are often cited as evidence of discrimination against women in the labor market. Yet the statistics and arguments do not withstand careful scrutiny. In 1999, average annual full-time wages of women were 73 percent of those of men. This average figure fails to consider crucial determinants of wages, including major variations between men and women in factors such as hours worked, education, age, part- or full-time status, experience, number of children, and consecutive years in the work force. When these factors are considered, economists find an adjusted wage gap far smaller than the 73 percent figure, with studies ranging from 88 to 99 percent.

For example, tenure and experience are two of the most important factors in explaining the wage gap. According to the U.S. Bureau of the Census, women on average spend a far higher percentage of their working years out of the work force than men. As many empirical studies have demonstrated, this means that when women return to work, they will not earn as much as their male or female counterparts who have more uninterrupted experience in the workplace.

In many studies, when all relevant factors are considered, the wage gap virtually disappears. For example, University of Maryland professor Judith Hellerstein found that women in the banking and miscellaneous products and plastics industries made 99 percent of what men earned. A recent study by the Employment Policy Foundation, analyzing March 2001 Current Population Survey data, found that single women who have never married, live alone and have full-time jobs earn more than their male equivalents by 28 cents per hour.

Misleading rhetoric also characterizes discussions of the glass ceiling, the supposedly impenetrable barrier that prevents women from advancing in the corporate world. The 1995 report issued by the Glass Ceiling Commission revealed that only 5 percent of senior managers at Fortune 1000 and Fortune 500 service companies were women, and implied that systemic discrimination was the cause. Yet the Glass Ceiling Commission report suffered from serious methodological flaws. Typical qualifications for corporate senior management positions include both an MBA and twenty-five years of work experience. Logic would suggest that the Commission make comparisons among this qualified labor pool of men and women to determine if discrimination was hampering women's advancement. But the Commission instead compared the number of women in the total labor force, without reference to experience or education, with the number wielding power at large corporations, yielding the 5 percent figure. A cursory glance at the history of professional school degrees reveals that few of the graduates of the 1950s and 1960s, who today would be at the pinnacle of their professions, were women. This suggests a "pipeline theory," where women are moving their way through the pipeline and into top corporate jobs. As well, evidence from organizations such as Catalyst suggests that the pipeline might be leaking, because women themselves leave jobs in the corporate world to take employment elsewhere, including in businesses they themselves start.

Herein lies the crucial oversight of those who claim a glass ceiling is holding back American women: women's own choices and decisions about their careers are never factored into the equation. Studies of workplace behavior have also found a clear difference in behavior and attitudes toward work between men and women, including that women are less willing to work long hours and relocate, and more eager for part-time work arrangements. Logging long hours and relocating are both routes to future promotion in corporate America. Ultimately, the only ceiling that exists in corporate America is gender-neutral - it prevents those who choose to devote more time to their personal lives from advancing at the same rate as those who devote more uninterrupted time to the workplace.

Finally, it is worth noting that we already have laws on the books that protect women from discrimination in pay and promotion: the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964. These statutes promote equal opportunity in the workplace and should continue to be vigorously enforced.

The Maloney/Dingell Report: "A New Look Through the Glass Ceiling: Where are the Women? The Status of Women in Management in Ten Selected Industries"

Although Representatives Maloney and Dingell are to be commended for their interest in the issue of women's advancement in the workplace, their report, "A New Look Through the Glass Ceiling: Where are the Women?" (hereafter referred to as the Report) suffers from several serious methodological flaws that render suspect its conclusions about the existence of discrimination against women in management.

First, the Report concedes that the data it used, from the federal Current Population Survey, do not account for "two important factors for determining salary levels: years of experience and level of managerial responsibility" (pg. 6, Dingell/Maloney report). The exclusion of these important variables, both of which are crucial determinants of compensation and workplace advancement, raises questions about the Report's conclusions about discrimination in wages. To make a finding of discrimination, any comparison of men's and women's salaries must take into account age, education, consecutive years of experience, and the size of the businesses or firms being compared. Only after holding these factors constant can we make determinations about the existence of discrimination. As noted above, academic studies of the wage gap have found far lower disparities in wages than those in the Report. For example, Professors Marianne Bertrand of the University of Chicago and Kevin Hallock of the University of Illinois, writing in the October 2001 issue of Cornell University's Industrial and Labor Relations Review, found that women's earnings at the top of corporate America were not significantly different from men's, when all relevant factors such as age, education, and experience were taken into account. Moreover, between 1992 and 1997, women nearly tripled their presence in the top executive ranks and strongly improved their compensation relative to men. Similarly, a 1999 National Science Foundation study of 1.5 million engineers concluded that female engineers make 98 cents on the dollar earned by their male counterparts.

Second, the Report concedes, "women managers are more likely to work part-time than their male counterparts." This means that we can expect women managers' salaries to be lower than their male counterparts who work longer hours.

Third, the Report is merely a snapshot of ten industries. Broader evidence reveals that women continue to make gains in the labor market, and experience faster wage growth than men.

Finally, and most importantly, the underlying tone of the report suggests that equality for women means statistical parity with men in all fields. By this definition, women will have achieved success only when they are half of all corporate CEOs earning exactly the same average wages as men do. But this is a misguided standard of success, because it fails to account for the heterogeneity of the female population and the powerful force of individual choice. The assumption that, without discrimination, we would make exactly the same choices as men ignores the available evidence on women's preferences and is an assumption that many women find demeaning, for it suggests that we are incapable of making choices for ourselves - and of bearing the consequences.


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