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November 19 2012

Salary Negotiations Are a Factor in the Wage Gap

Carrie L. Lukas

As IWF readers know, when relevant factors about industry, hours worked, and personal characteristics are taken into account, the wage gap shrinks dramatically.  Yet most studies show that even after controlling for these factors, men still tend to out earn women by a bit.  Discrimination could play a role in that difference, but something else also could be its cause.  

A new study offers a potential explanation of some of that remaining difference:  how men and women approach salary negotiations.

Previous studies have shown before that women are much less likely than men are to negotiate their first salary—a difference which ripples into future earnings.  This new study published by the National Bureau of Economic Research studied male and female job seekers and found that women are much less likely to negotiate a salary offer, unless the job description explicitly states “salaries negotiable,” in which case they tend to be more proactive than men in negotiating for more.

I see this as good news for women.  As I’ve written before, it’s a disservice to women when politicians (and feminists) pretend that the full wage gap is a result of an overwhelmingly hostile, sexist work world.   That makes women feel helpless (which is probably the point, since that will encourage them to support more protection from the government).

Yet knowledge is power for women.  It’s important for women to know that the choices they make—the industries they choose and how much time they dedicate to their jobs—are the real key for how much they will earn. 

This information about negotiations is also important.  Men are getting more from employers because they assume that all salaries are negotiable.  Women can benefit from taking a similar approach.

This is information that I can use.  I can keep that in mind myself, when I’m considering employment options, and then as a parent I can make it a priority to encourage my daughters to be comfortable talking about money and valuing their time and talents.  If people really want to close the “wage gap”—rather than just have it as a convenient liberal political issue and talking point—education about the real causes of that gap is what’s needed.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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