Gender pay gap fueled by 'old boys' club,' study finds
'Not only is this unfair, it is inefficient; the economy is missing out on women who would make great managers'
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The old boys' club is still holding women back from climbing the corporate ladder.
In fact, more than one-third of the pay gap between men and women — about 38 percent — is attributed to the exclusive, deeply entrenched business relationships forged between men when they do things like talk about sports or share a smoke break, according to a new study conducted by Harvard University and the University of California, Los Angeles researchers.
"When male employees are assigned to male managers, they are promoted faster in the following years than they would have been if they were assigned to female managers," the report said. "Female employees, on the contrary, have the same career progression regardless of the manager's gender."
In the U.S., women have been making roughly 80 cents for every dollar a man makes over the past 15 years, a gap that's even wider between women of color and white men, according to Department of Labor data.
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Although there has been some progress in promoting women, the improvement has been "agonizingly slow," according to a recent study conducted by McKinsey & Company. For instance, about 48 percent of entry-level employees are women, but that percentage dips to around 38 percent at middle-management. It falls even further at the C-Suite level to 22 percent and plummets to just 5 percent among CEOs.
"Not only is this unfair, it is inefficient; the economy is missing out on women who would make great managers," the study found.
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The old boys' club is also the culprit behind that lack of representation, the study found, because men are able to schmooze, network and interact with more powerful men in "ways that less accessible to women." That mechanism can create a vicious cycle that disproportionately rewards men, who then continue to promote other men, according to the study, which painted a bleak picture.
That advantage is even more evident when a male employee switches from a female manager to a male manager: In those scenarios, the employee gets promoted faster and, on average, earns about 13 percent more than a male counterpart assigned to another female manager. There were no noticeable changes in male workers' sales revenue or hours when men worked for men.
"These differences in career progression cannot be explained by differences in effort or output," the study said.
Women did not see similar gains after switching managers, and their career trajectory remained steady whether or not they had a male or female boss, researchers said.