WEBVTT - BONUS: Listen to The Pay Check 0:00:00.040 --> 0:00:14.240 M Hi. I'm Rebecca Greenfield, a reporter at Bloomberg. This 0:00:14.400 --> 0:00:18.480 is the first episode of the Paycheck. For the next 0:00:18.680 --> 0:00:24.080 six weeks, we're going to investigate a big, expensive, global mystery. 0:00:25.120 --> 0:00:29.360 Why in women still make less money, a lot less 0:00:29.400 --> 0:00:33.960 money than men. There's pretty broad agreement on the stats. 0:00:34.800 --> 0:00:37.479 According to the U S Census and the Bureau of 0:00:37.520 --> 0:00:41.000 Labor Statistics in the US, for every one dollar a 0:00:41.000 --> 0:00:44.680 man makes, a woman gets about eighty cents. For women 0:00:44.720 --> 0:00:47.960 of color, it's even worse. Black women are in just 0:00:48.240 --> 0:00:53.040 sixty cents on the dollar. Hispanic women only fifty four cents. 0:00:53.560 --> 0:00:56.639 That's based on median hourly earnings for full time workers. 0:00:57.920 --> 0:01:01.160 But the numbers they only get you so are because 0:01:01.200 --> 0:01:04.600 the gender pay gap, that's what it's called. By the way, 0:01:04.920 --> 0:01:08.039 isn't just about the data. It's about how it plays 0:01:08.040 --> 0:01:11.840 out in real life. So here's one way it works 0:01:11.880 --> 0:01:16.440 in real life, actually my life sort of, because it's 0:01:16.440 --> 0:01:21.800 about my mom. Linda Bradsky, that's my mom, was working 0:01:21.840 --> 0:01:24.560 as a pediatric ear nose and throat surgeon up in Buffalo, 0:01:24.600 --> 0:01:27.920 New York. She worked at the Children's Hospital, where she 0:01:28.000 --> 0:01:30.880 was the busiest surgeon in her practice. She was also 0:01:30.959 --> 0:01:34.520 a tenured full professor at Sunni Buffalo, a rank only 0:01:34.560 --> 0:01:37.800 a dozen other women had in her field. Then one 0:01:37.840 --> 0:01:40.440 day she was doing some work in her department office 0:01:40.520 --> 0:01:42.840 and she found a document with the salaries of her 0:01:42.880 --> 0:01:47.280 colleagues on it. When I saw what salaries would be 0:01:47.280 --> 0:01:49.680 given out, I was appalled when I discovered that a 0:01:49.800 --> 0:01:53.840 junior colleague, a man with lower rank, less seniority and 0:01:53.960 --> 0:01:59.200 pure responsibilities, was paid twice the stipend from the university 0:01:59.360 --> 0:02:03.880 as was And to make it worse, in some cases, 0:02:03.920 --> 0:02:06.960 my hospital colleagues were paid more than five times my 0:02:07.080 --> 0:02:11.040 hospital stipend for the administrative work I performed. Even though 0:02:11.080 --> 0:02:13.760 I had the most busy service in the hospital. Her 0:02:13.800 --> 0:02:17.040 male colleagues brought in less business, and yet they made 0:02:17.160 --> 0:02:21.360 five times as much money. So she asked for a raise, 0:02:21.760 --> 0:02:24.760 but she didn't get it. For four years, she tried 0:02:24.800 --> 0:02:28.200 to solve things internally, but finally in two thousand one, 0:02:28.360 --> 0:02:31.400 she filed a lawsuit, and for the next seven years 0:02:31.440 --> 0:02:34.000 she spent most of her time outside of work fighting 0:02:34.040 --> 0:02:38.920 her legal battle. She called it her third job. Even 0:02:38.960 --> 0:02:43.480 with a huge practice, a lot of economic security, academic standing, 0:02:43.520 --> 0:02:47.000 and a lot of power, and my grants my research program. 0:02:47.040 --> 0:02:51.160 It was very, very tough battle. My mom passed away 0:02:51.160 --> 0:02:54.040 in so there are a lot of questions. I can't 0:02:54.080 --> 0:02:57.120 ask her about her legal battle. I can't ask her 0:02:57.160 --> 0:03:00.280 about a lot of things like trump, me too, or 0:03:00.360 --> 0:03:03.280 my bad back. Those clips you heard are from a 0:03:03.280 --> 0:03:06.880 seminar she gave in after she sued. She still worked 0:03:06.880 --> 0:03:09.200 full time as a surgeon, and I remember the nights 0:03:09.200 --> 0:03:13.760 and weekends she spent preparing for depositions, or reviewing discovery documents, 0:03:14.120 --> 0:03:17.600 or interviewing expert witnesses. I was in high school for 0:03:17.600 --> 0:03:19.600 a lot of the time, and when I got bored, 0:03:19.639 --> 0:03:21.760 I'd joined her at the kitchen table and we'd sit 0:03:21.800 --> 0:03:25.480 together and sift through three ring binders full of salary information. 0:03:26.320 --> 0:03:30.239 Her lawyer Sam, he was on speed dial. I was 0:03:30.280 --> 0:03:33.239 halfway through college when she finally settled with the university. 0:03:33.520 --> 0:03:37.760 She got seven hundred forty thousand dollars, but she later 0:03:37.840 --> 0:03:40.680 said the money wasn't enough to make up for the 0:03:40.720 --> 0:03:43.720 time she spent or what it did to her career. 0:03:44.360 --> 0:03:47.320 She got passed over for jobs and stopped getting invitations 0:03:47.320 --> 0:03:50.480 to speak on panels. I remember this one time she 0:03:50.520 --> 0:03:53.160 had to go to anger management because she spoke too 0:03:53.200 --> 0:03:57.360 loudly during a medical emergency. I was sent to see 0:03:57.400 --> 0:04:01.360 a psychiatrist for anger management, and after two sessions, the 0:04:01.400 --> 0:04:04.680 psychiatrist wrote back to the medical staff that Dr Brawsky 0:04:04.760 --> 0:04:08.120 has no anger management problem. She acted appropriately to the 0:04:08.160 --> 0:04:12.400 stressors she faced. When the medical staff president called her 0:04:12.720 --> 0:04:15.520 and she was angry. The psychiatrist says, I think you 0:04:15.680 --> 0:04:19.480 have an anger management problem, but actually she was angry 0:04:19.920 --> 0:04:23.480 and frustrated and upset the lawsuit. It took up a 0:04:23.520 --> 0:04:26.800 lot of time and energy, but the worst part of 0:04:26.839 --> 0:04:29.680 it was that she didn't think it changed anything for 0:04:29.760 --> 0:04:39.360 other women in medicine or any other field. YO. The 0:04:39.440 --> 0:04:41.920 year my mom found out she made five times less 0:04:41.920 --> 0:04:44.440 than her male colleagues was also the year Want to 0:04:44.520 --> 0:04:47.800 Be by the Spice Girls hit number one. That was 0:04:47.839 --> 0:04:50.120 the cultural moment. I grew up in a league of 0:04:50.120 --> 0:04:56.839 their own. Powerpuff Girls, legally blonde like It's girl power 0:04:56.960 --> 0:04:59.719 was everywhere. My mom and everyone else told me I 0:04:59.720 --> 0:05:03.000 could be whatever I wanted, and I believe them. My 0:05:03.040 --> 0:05:06.520 mom was a surgeon, she wore shoulder pads in a 0:05:06.560 --> 0:05:10.160 funny way. The lesson I took from her lawsuit reinforced 0:05:10.240 --> 0:05:13.799 all that girl power stuff. See women could be strong 0:05:13.839 --> 0:05:16.839 and fight for what's right. It took me a lot 0:05:16.880 --> 0:05:20.280 longer to realize the other part of it, that my 0:05:20.360 --> 0:05:23.800 mom could be all of these amazing things and yet 0:05:24.360 --> 0:05:33.000 still face discrimination. When you look at the world, you 0:05:33.000 --> 0:05:36.680 know what the population like. Where is our place like? 0:05:36.720 --> 0:05:43.320 Where is our value? People? Real work helps to keep 0:05:43.360 --> 0:05:47.360 women not on a pedestal but in a cage, and nationwide, 0:05:47.400 --> 0:05:50.400 the median salary for men is greater than women in 0:05:51.000 --> 0:05:56.840 ninety nine point six of major occupations, gil power equalization 0:05:56.960 --> 0:06:01.040 between the sex sees. What dudes are you won't? We 0:06:01.080 --> 0:06:04.800 want to end gender inequality, and to do this we 0:06:04.920 --> 0:06:08.520 need everyone involved. Bloomberg crush the numbers and found that 0:06:08.600 --> 0:06:11.680 Wall Street is the worst when it comes to gender 0:06:11.720 --> 0:06:19.360 pay gaps. And here are the all male nominees. This 0:06:19.720 --> 0:06:24.400 is the paycheck. The gender pay gap isn't just a 0:06:24.440 --> 0:06:27.760 problem for women. If you're married to a woman, she's 0:06:27.800 --> 0:06:31.400 making less money for your family single mom, then you 0:06:31.480 --> 0:06:33.800 have less money to spend on childcare, which makes it 0:06:33.839 --> 0:06:36.840 harder to work and earn more money. What does that 0:06:36.839 --> 0:06:39.159 look like when you multiply it by all the women 0:06:39.160 --> 0:06:43.320 in the world, By one estimate, twenty eight trillion dollars 0:06:43.360 --> 0:06:45.840 would be added to the global economy if women earned 0:06:45.880 --> 0:06:48.640 as much as men. I've been reporting on this for 0:06:48.680 --> 0:06:51.560 a long time, and people like to tell me women 0:06:51.600 --> 0:06:55.800 earn less than men for entirely justifiable reasons. They say 0:06:55.880 --> 0:06:58.839 women tend to work in lower paying jobs and fields. 0:06:59.400 --> 0:07:02.080 They say women take off more time to raise kids 0:07:02.080 --> 0:07:05.600 than men do. Women, they say, are also less likely 0:07:05.640 --> 0:07:09.480 to negotiate their salaries or ask for raises. But there 0:07:09.480 --> 0:07:11.840 are plenty of people who don't see it that way. 0:07:12.200 --> 0:07:15.160 They say women aren't given the same opportunities as men. 0:07:15.320 --> 0:07:18.320 They say they're discriminated against or sexually harassed out of 0:07:18.360 --> 0:07:21.360 their jobs and careers. A lot of people are only 0:07:21.520 --> 0:07:25.840 just starting to understand how common that is. One of 0:07:25.880 --> 0:07:28.640 the big problems with the gender pay gap is that 0:07:28.680 --> 0:07:31.200 it's all of these things and they interact with each 0:07:31.240 --> 0:07:35.600 other all the time. Women do make choices, they're also 0:07:35.720 --> 0:07:39.520 sometimes discriminated against for the choices they make. There's no 0:07:39.640 --> 0:07:54.120 simple explanation and there's no easy solution. This is all 0:07:54.200 --> 0:07:59.080 about money. So let's go where the money is, Wall Street, 0:08:00.600 --> 0:08:05.000 specifically to Goldman Sachs, one of the most powerful banks. 0:08:06.560 --> 0:08:10.440 If you have the same responsibilities and you are just 0:08:10.640 --> 0:08:14.360 as effective, then you should be equally compensated and rewarded 0:08:14.440 --> 0:08:18.760 for that work. That's Christina chen Austar. She went to 0:08:18.760 --> 0:08:22.559 work at Goldman Sacks and over the next eight years 0:08:22.600 --> 0:08:25.600 she made a lot of money, but the men working 0:08:25.600 --> 0:08:29.560 at Goldman they made a lot more. Goldman says that 0:08:29.640 --> 0:08:33.360 it's not about gender, it's just about individuals getting paid 0:08:33.400 --> 0:08:37.480 for performance. Christina has been fighting for thirteen years now, 0:08:37.640 --> 0:08:41.199 trying to prove there's more to it. She talked about 0:08:41.200 --> 0:08:43.440 her case for the first time with my colleagues Dune, 0:08:43.480 --> 0:08:47.160 Lawrence and mac Abelson. A warning, the story you're about 0:08:47.200 --> 0:08:50.480 to hear contains a description of an alleged sexual assault. 0:08:56.559 --> 0:08:59.559 Christina was born in Taiwan, but grew up outside of Chicago. 0:09:00.200 --> 0:09:03.320 She's the oldest of five girls and just incredibly smart. 0:09:03.559 --> 0:09:06.840 She graduated from m I T when she was twenty. 0:09:07.320 --> 0:09:09.520 She had already been working for six years in banking 0:09:09.800 --> 0:09:13.000 when Goldman hired her to sell convertible bonds that's a 0:09:13.040 --> 0:09:15.520 bond that can be turned into a stock. Back then, 0:09:15.679 --> 0:09:18.320 she didn't spend much time thinking about gender discrimination. She 0:09:18.440 --> 0:09:21.800 was just really excited about joining Goldman Sachs. Like all 0:09:21.800 --> 0:09:24.440 the big banks, the ones that make billions and billions 0:09:24.480 --> 0:09:27.400 of dollars a year. Goldman gets high ratings and some 0:09:27.520 --> 0:09:31.400 good press for things like generous maternity leave and mentoring programs. 0:09:32.000 --> 0:09:34.240 But on Wall Street women still have to deal with 0:09:34.280 --> 0:09:37.319 some shockingly bad behavior and a code of silence when 0:09:37.360 --> 0:09:40.920 things go wrong. Christina found that out pretty early on 0:09:40.960 --> 0:09:44.559 in Goldman. This still is not easy for her to 0:09:44.600 --> 0:09:49.120 talk about. Well. Um, the sexual assault happened not long 0:09:49.160 --> 0:09:52.120 after I joined Goldman, Sachs. I joined in March of 0:09:52.240 --> 0:09:55.120 n and then it happened in October, which was just 0:09:55.200 --> 0:09:59.560 seven months later. This is Christina's account from legal filings 0:09:59.600 --> 0:10:02.719 and inner views of what happened Goldman, as you'll hear, 0:10:02.960 --> 0:10:05.760 disputes most of it. She and her team had gone 0:10:05.760 --> 0:10:08.959 out to dinner to celebrate someone's promotion. Then everyone went 0:10:09.000 --> 0:10:11.720 to a strip club. She got bored and left, but 0:10:11.800 --> 0:10:14.280 a colleague insisted on walking her to her boyfriend's apartment 0:10:14.280 --> 0:10:18.440 a few blocks away. Upstairs. Outside the apartment, he pinned 0:10:18.440 --> 0:10:21.240 her against the wall and groped and kissed her. She 0:10:21.320 --> 0:10:24.559 had to fight him off. The Next day she saw 0:10:24.640 --> 0:10:28.120 him in the office. He pulled her aside and he apologized. 0:10:28.600 --> 0:10:30.760 He asked her to promise not to say anything, and 0:10:30.880 --> 0:10:33.720 for a year and a half she didn't. When she 0:10:33.760 --> 0:10:36.600 finally told her manager about the assault, it turned out 0:10:36.760 --> 0:10:40.960 he already knew her boss was friends with this guy. 0:10:41.320 --> 0:10:43.920 He told them what happened, but not who it had 0:10:43.920 --> 0:10:48.560 happened with. He said, oh, that was you, and so 0:10:48.600 --> 0:10:52.960 I was flabbergasted, and the response really disappointed me since 0:10:53.040 --> 0:10:56.600 it was very clear that something was wrong. He said, 0:10:56.840 --> 0:11:00.040 now it's my duty to raise this with HR and 0:11:00.040 --> 0:11:02.000 and I would suggest that you not make a big 0:11:02.000 --> 0:11:04.160 deal out of it, since you don't want a lawsuit. 0:11:04.960 --> 0:11:08.080 And so I essentially did what he asked and then 0:11:08.120 --> 0:11:11.240 reported that back to him. Christina hoped that would be 0:11:11.240 --> 0:11:14.680 the end of it. It wasn't. After that, she says 0:11:14.720 --> 0:11:17.120 she was cut out of big areas of business. Her 0:11:17.160 --> 0:11:20.440 managers didn't support her attempts to find new opportunities. Her 0:11:20.559 --> 0:11:23.160 performance reviews, which fed into how much she got paid, 0:11:23.520 --> 0:11:26.080 were assigned to colleagues she didn't even work with much. 0:11:26.880 --> 0:11:30.880 When you're busy and you're working hard, you just focus 0:11:30.960 --> 0:11:33.800 on doing a good job and doing your work, and 0:11:33.840 --> 0:11:35.680 you don't really think about it too much on a 0:11:35.760 --> 0:11:39.240 day to day basis. And you can ignore a lot 0:11:39.280 --> 0:11:42.440 of things, but you know at some point you step away, 0:11:43.080 --> 0:11:45.720 you lift up your head, and you realize that things 0:11:45.760 --> 0:11:48.679 are not right. That point for Christina came in two 0:11:48.760 --> 0:11:52.320 thousand four, when she returned from maternity leave. Her team 0:11:52.320 --> 0:11:56.040 had been reorganized and they had moved her desk. Now 0:11:56.280 --> 0:11:59.680 she was sitting with a group of administrative assistants, all women. 0:12:00.800 --> 0:12:05.960 It was a very visual and visceral representation that my 0:12:06.040 --> 0:12:09.400 manager did not care about my career or care about 0:12:09.640 --> 0:12:14.000 my prospects for contributing to the team. In eight years 0:12:14.000 --> 0:12:17.400 at Goldman, Christina remained a vice president and her pay 0:12:17.640 --> 0:12:22.160 ended up rising about the guy she says assaulted her, 0:12:22.200 --> 0:12:26.320 he made managing director, then partner. Over those same years, 0:12:26.480 --> 0:12:30.800 his pay went up something like four In two thousand five, 0:12:31.040 --> 0:12:33.679 she quit and filed a complaint with the Equal Employment 0:12:33.679 --> 0:12:38.480 Opportunity Commission, the federal agency tasked with investigating complaints of discrimination. 0:12:39.240 --> 0:12:41.520 If you want to see your employer in court, in 0:12:41.600 --> 0:12:45.200 most cases, this is the first step. Goldman told the 0:12:45.240 --> 0:12:48.079 e e o C that Christina was paid more than 0:12:48.120 --> 0:12:50.719 fairly and the firm hadn't wanted her to leave at all. 0:12:51.320 --> 0:12:53.920 The part where she had to sit with the secretaries temperary. 0:12:54.440 --> 0:12:57.480 Goldman Saks called her alleged assault a brief and disputed 0:12:57.520 --> 0:12:59.959 interaction that she was now, in the words of Goldman 0:13:00.040 --> 0:13:04.720 sax trying to exploit. Gina Palumbo, whoever sees employment law 0:13:04.760 --> 0:13:07.920 at the firm, gave us Goldman Saxes perspective. What she 0:13:08.000 --> 0:13:10.720 says is this. The key issues here are that Mission 0:13:10.760 --> 0:13:14.040 Astars significantly delayed reporting the incident to employ your relations, 0:13:14.440 --> 0:13:16.880 and when she did talk to employee relations, she declined 0:13:16.920 --> 0:13:20.079 to provide any detail about the incident or to in 0:13:20.160 --> 0:13:29.600 any way cooperate in the investigation. In two thousand ten, 0:13:29.800 --> 0:13:32.200 the e o C gave her the green light. She 0:13:32.320 --> 0:13:36.080 filed suit along with two other former Goldman employees, alleging 0:13:36.120 --> 0:13:38.360 that Goldman paid women less than men for the same 0:13:38.360 --> 0:13:42.160 work and that the bank systematically denied women the opportunities 0:13:42.200 --> 0:13:45.640 they deserved. They wanted Goldman to pay for its mistakes 0:13:45.960 --> 0:13:49.120 and to change its policies. They also wanted to sue 0:13:49.160 --> 0:13:52.120 as a class, representing more than two thousand Goldmen women. 0:13:52.720 --> 0:13:54.720 Once you say you're soon to represent a group, it 0:13:54.800 --> 0:13:58.440 raises the stakes a lot. It stops being about this 0:13:58.600 --> 0:14:01.880 or that individual experience. They'd have to prove Goldman is 0:14:01.920 --> 0:14:05.600 systematically biased against the women who worked there. It also 0:14:05.679 --> 0:14:09.240 raises the financial stakes for the women and for the bank. 0:14:10.200 --> 0:14:12.800 For the last eight years, they've been going back and 0:14:12.880 --> 0:14:17.080 forth and back and forth. There were fights about internal documents. 0:14:17.600 --> 0:14:21.440 Christina's team won those and attempts to divide the coalition 0:14:21.440 --> 0:14:25.800 of plaintiffs. Sometimes they were just unlucky. In two thousand eleven, 0:14:25.840 --> 0:14:27.920 the Supreme Court issued a ruling that made it harder 0:14:27.960 --> 0:14:31.200 to get class status. The case has also moved from 0:14:31.280 --> 0:14:36.400 judge to judge. In two thousand and fourteen, Christina's lawyers 0:14:36.400 --> 0:14:39.080 were finally ready to put a number on paid discrimination 0:14:39.160 --> 0:14:42.600 at Goldman Sachs. Female vice presidents were paid twenty one 0:14:42.760 --> 0:14:46.720 percent less than similar men, according to their analysis. Goldman 0:14:46.800 --> 0:14:53.160 calls that analysis deeply flawed and maintains they pay everyone fairly. Meanwhile, 0:14:53.240 --> 0:14:55.680 more women have joined the suit. Here's one of them, 0:14:55.720 --> 0:14:59.120 Alice and Gamba, a former Goldman Sachs trader. I had 0:14:59.160 --> 0:15:01.960 my head on. I did everything right. I jumped through 0:15:02.000 --> 0:15:04.800 every hoop, I played the game right. I did everything 0:15:04.880 --> 0:15:07.880 that should have got me the title that I wanted, 0:15:08.240 --> 0:15:10.560 and I didn't get it. What do I have to lose. Now, 0:15:10.640 --> 0:15:12.840 if I could help them out, you know, maybe there's 0:15:12.880 --> 0:15:17.720 maybe there's a chance that something changes in this industry. 0:15:18.320 --> 0:15:21.440 Christina was twenty five when she started at Goldman. She 0:15:21.600 --> 0:15:24.320 was thirty four when she filed that ees. He complained 0:15:24.760 --> 0:15:28.320 this March ty nine, she turned forty seven. The next 0:15:28.360 --> 0:15:30.960 day was Good Friday, and the markets were closed. She 0:15:31.000 --> 0:15:35.280 took her daughter to visit a prospective middle school. The 0:15:35.440 --> 0:15:39.040 very same day, the judge ruled that Christina and Allison 0:15:39.240 --> 0:15:42.000 can represent a class of as many as two thousand 0:15:42.120 --> 0:15:46.000 three d women and christina GE's Kelly Dermany, M hey, 0:15:46.200 --> 0:15:51.000 that's some amazing news. The court just certified. Christina didn't 0:15:51.040 --> 0:15:53.840 hear her lawyer's voicemail until the next day. She was 0:15:53.880 --> 0:15:56.840 sitting in a Broadway theater waiting for a Saturday matinee 0:15:57.040 --> 0:16:03.600 of Mean Girls. A huge congratulations, just really really really 0:16:03.640 --> 0:16:06.240 really happy for you. And this is not a happy ending. 0:16:06.440 --> 0:16:10.120 It's more like a happy ending to a beginning. No 0:16:10.160 --> 0:16:13.840 matter what happens, a settlement, a trial, you get the 0:16:13.840 --> 0:16:17.000 sense it's going to be big. This, after all, is 0:16:17.040 --> 0:16:24.280 Goldman Sex. I firmly believe that eventually the truth always 0:16:24.320 --> 0:16:27.600 comes out. Eventually, it's just a question of time, but 0:16:27.920 --> 0:16:30.680 I certainly hope that things will be better and that 0:16:30.760 --> 0:16:33.680 we will come to a resolution before my daughter looks 0:16:33.720 --> 0:16:40.200 for a job. Goldman shows no signs of throwing in 0:16:40.200 --> 0:16:44.440 the towel. Gina Palombo told Bloomberg, we're defending the firm 0:16:44.520 --> 0:16:49.360 and good faith against what we believe our meritless accusations. 0:16:49.360 --> 0:16:52.880 She also says the plaintiffs analysis of Paya Goldman ignores 0:16:52.920 --> 0:16:56.640 the fact that different roles in different teams have different 0:16:56.680 --> 0:17:02.560 market values. Here's how Christina's lawyer, Kelly Dermody explains it. 0:17:03.240 --> 0:17:06.080 That's what they would like to pretend that this case 0:17:06.160 --> 0:17:09.960 is about millions of individual decisions as opposed to a 0:17:10.080 --> 0:17:15.000 system that has, you know, players that operate within the 0:17:15.040 --> 0:17:21.960 guidelines of the system. A lot of big US companies 0:17:22.000 --> 0:17:25.200 make some version of this claim. They do their own 0:17:25.200 --> 0:17:28.399 pay gap analysis and they find little or no disparity 0:17:28.520 --> 0:17:32.359 between what they pay men and women. Well, Spargo, b 0:17:32.480 --> 0:17:35.840 and Y, Melon City Group, Master Cards, and JP Morgan 0:17:35.920 --> 0:17:40.000 have all released that information. After accounting for the different factors. 0:17:40.160 --> 0:17:43.040 Those companies have all said their pay gap is really 0:17:43.320 --> 0:17:46.200 very small. On a like for like basis, women make 0:17:46.240 --> 0:17:49.560 about one percent less than men. Do you heard that right? 0:17:50.040 --> 0:17:54.240 One percent? So how does that work? We know women 0:17:54.280 --> 0:17:57.520 in the US make less than men, and yet all 0:17:57.520 --> 0:18:01.280 these companies, these major employers, they say they barely have 0:18:01.320 --> 0:18:04.320 a pay gap at all. My colleague Jordan Holman and 0:18:04.400 --> 0:18:06.919 I tried to get to the bottom of it. So 0:18:07.000 --> 0:18:10.560 here's the thing. Companies don't have to tell you anything 0:18:10.640 --> 0:18:14.000 about their pay gaps. The law just says it's illegal 0:18:14.040 --> 0:18:18.040 to discriminate in the US. Any company that's releasing a 0:18:18.160 --> 0:18:22.080 number is releasing the number for presumably public relations purposes, 0:18:22.480 --> 0:18:27.000 to inform whoever's watching that g don't come after us 0:18:27.000 --> 0:18:29.919 and say we're discriminating. Look, here's an analysis that shows 0:18:29.960 --> 0:18:33.439 that there's no pay gap once you account for people 0:18:33.480 --> 0:18:37.040 doing comparable work. That's Henry Farber. He's a professor at 0:18:37.080 --> 0:18:40.280 Princeton and he's an expert at measuring the gender pay gap. 0:18:40.720 --> 0:18:43.600 I called Dr Farber and asked him about these small 0:18:43.640 --> 0:18:46.639 pay gaps and how they could be so much smaller 0:18:46.800 --> 0:18:50.080 than the national average, and he told me it just 0:18:50.119 --> 0:18:53.359 really depends on what you measure. Well, as I understand it, 0:18:54.000 --> 0:18:56.880 people can use these terms however they like, but the 0:18:56.960 --> 0:19:01.720 average pay gap is simply taken as a whole. For example, 0:19:01.760 --> 0:19:05.600 within a company, what's the average pay that men received 0:19:05.720 --> 0:19:08.720 and the average pay that women received, and the proportional 0:19:08.760 --> 0:19:11.919 difference between those two is what might be called the 0:19:12.000 --> 0:19:15.280 average pay gap. What the average tells you a lot 0:19:15.320 --> 0:19:17.560 of the time is that most of a company's highest 0:19:17.600 --> 0:19:20.520 paid people are men, but it doesn't tell you if 0:19:20.640 --> 0:19:23.240 men and women doing the same job are getting paid 0:19:23.280 --> 0:19:25.520 the same. So if you want to figure out if 0:19:25.560 --> 0:19:28.600 there's a gap between men and women doing the same work, 0:19:29.200 --> 0:19:32.199 then that's when you use the adjusted pay gap. And 0:19:32.240 --> 0:19:35.200 that calculates all of the things that go into compensation, 0:19:35.680 --> 0:19:39.440 and there's lots of them, like education, experience, how long 0:19:39.480 --> 0:19:43.600 you've worked out a place. There's no specific formula for 0:19:43.680 --> 0:19:48.080 calculating what some might call an adjusted pay gap, so 0:19:48.160 --> 0:19:51.160 to be clear, there's no set equation for the adjusted 0:19:51.160 --> 0:19:55.600 pay gap. Companies can use whatever variables they want, but 0:19:56.000 --> 0:19:59.159 to be fair, there are reasons companies might want to 0:19:59.200 --> 0:20:02.440 know both number bers they're just a pay gap helps 0:20:02.480 --> 0:20:06.000 them compare apples to apples. Plus, if you aren't paying 0:20:06.040 --> 0:20:09.160 men and women the same for the same work, then 0:20:09.320 --> 0:20:16.280 you have a problem. Companies say they consider variables like 0:20:16.359 --> 0:20:21.680 someone's experience, job title and geography. For example, someone living 0:20:21.680 --> 0:20:24.800 in New York probably makes more than someone in Kansas 0:20:24.840 --> 0:20:27.920 City because the cost of living is higher. But then 0:20:28.040 --> 0:20:34.280 sometimes companies use the phrase pay philosophy. What does that mean? 0:20:34.720 --> 0:20:39.160 We don't really know, and they don't elaborate. Recently, when 0:20:39.280 --> 0:20:42.680 Dr Barber was looking at one company's data, he came 0:20:42.760 --> 0:20:45.879 up with four different adjust to pay gap figures that 0:20:45.920 --> 0:20:49.840 reigns between two point eight percent and eight point six percent. 0:20:50.359 --> 0:20:53.720 When the company did its own analysis, they said the 0:20:53.720 --> 0:20:59.520 gap was even smaller zero point two percent. You can 0:20:59.560 --> 0:21:02.040 imagine in that the company might be able to cook 0:21:02.160 --> 0:21:05.000 up an adjustment analysis. Cook up is the wrong word, 0:21:05.040 --> 0:21:08.200 it's too pejorative, but come up with an adjusted pay 0:21:08.240 --> 0:21:10.840 analysis that shows there's not much of a gap at all, 0:21:11.280 --> 0:21:15.200 whereas some other analysts might look at this and say, no, no, 0:21:15.280 --> 0:21:18.480 you're over adjusting for some things, and in fact there 0:21:18.560 --> 0:21:21.560 is a substantial pay gap. But that's the problem with 0:21:21.600 --> 0:21:24.680 the adjusted pay gap. We don't know what variables they're 0:21:24.680 --> 0:21:28.160 including and how much weight they're giving them. Maybe everyone's 0:21:28.160 --> 0:21:30.960 getting paid fairly for the job they're in, but this 0:21:31.040 --> 0:21:34.480 figure might not tell us that companies are just asking 0:21:34.560 --> 0:21:37.959 us to trust them and that's a little awkward. I 0:21:38.000 --> 0:21:41.720 haven't seen too many companies, frankly, either talk about their 0:21:41.720 --> 0:21:46.000 pay gaps or admit that they have a substantial pay 0:21:46.040 --> 0:21:49.720 gap between men and women. The average pay gap tells 0:21:49.760 --> 0:21:52.719 us who's taking home the biggest salaries at these companies, 0:21:53.000 --> 0:21:55.600 and if men keep earning a lot more than the 0:21:55.640 --> 0:21:58.399 women they work with like they do and most major 0:21:58.520 --> 0:22:01.640 US companies, the average pay gap is going to stay 0:22:01.680 --> 0:22:05.560 pretty big. To change this equation, you need a more 0:22:05.600 --> 0:22:09.639 balanced workforce at every single level, so like more women 0:22:09.720 --> 0:22:11.840 at the top of the pay scale or more men 0:22:11.920 --> 0:22:16.040 at the bottom, exactly. And then the question is is 0:22:16.160 --> 0:22:19.680 everyone getting a fair shot of reaching the highest paid jobs. 0:22:28.359 --> 0:22:32.000 There's a word that's entered the popular lexicon recently that 0:22:32.160 --> 0:22:37.720 I think perfectly describes what's happening. Gas lighting. Decades of 0:22:37.800 --> 0:22:41.720 statistics tell us we're making less money. Our experiences tell 0:22:41.800 --> 0:22:45.600 us we're being paid less. They moved Christina's desk, My 0:22:45.720 --> 0:22:50.040 mom saw the salaries of her coworkers. But our employers say, 0:22:50.160 --> 0:22:52.840 there's nothing to see here, just a whole lot of 0:22:52.920 --> 0:22:57.040 reasonable explanations. Next week on the paycheck, we're going to 0:22:57.160 --> 0:23:01.000 dig into those explanations. How would did we get here? 0:23:01.520 --> 0:23:03.879 Why do women make less money than men in the 0:23:03.920 --> 0:23:12.399 first place? The short answer sex. Thanks for listening to 0:23:12.400 --> 0:23:15.159 The Paycheck. If you like our show, please head on 0:23:15.200 --> 0:23:18.719 over to Apple Podcasts or wherever you listen to rate, review, 0:23:18.760 --> 0:23:23.800 and subscribe. This episode was reported by Dune, Lawrence, Max Abelson, 0:23:23.920 --> 0:23:28.199 and Jordan Holman. It was edited by Janet Paskin, produced 0:23:28.200 --> 0:23:32.080 by Elizabeth, and hosted by me Rebecca Greenfield. We had 0:23:32.119 --> 0:23:35.919 additional help from Magnus Hendrickson, Francesca Levy, and Gillian Goodman. 0:23:37.040 --> 0:23:40.879 Our original music is by Leo Sidron. Carrie Vanderriott did 0:23:40.920 --> 0:23:43.120 the illustrations on our show page, which you can find 0:23:43.200 --> 0:23:47.320 at bloomberg dot com slash Paycheck. Bloomberg's head a podcast 0:23:47.480 --> 0:23:48.520 is Francesca Levy