A local Toronto businessman, lawyer, and would-be politician has (once again) talked his way into a controversy that could destroy his possible run for Toronto Mayor. In the past, he has made comments about separate school board funding that backfired politically. This time, he was talking about a subject that crosses into Law of Work territory, the gender wage gap. Women in Canada earn about 70% of men.
Tory referred to ‘studies’ he’s read that find that women don’t negotiate as aggressively as men. He drew on his own experience in a law firm and in business, saying that
women simply were less aggressive in demanding raises: “The number of men who came to negotiate with me when I was running a law firm or a company was much higher than the number of women. The women don’t come as often to complain. The men do, so my experience is a little different in that I do think that more men put a fuss up about their money.” These comments sparked a media and social media backlash. He then tried to fix the controversy by saying that women need to “learn how to play golf”, since this is where relationships are built.
All of this no doubt makes perfect sense for a guy like John Tory. I’m sure he meant no maliciousness by his comments, and that he truly believes them to be true. When John Tory looked around the compensation committee at the law firm Tory’s, his dad’s law firm, and saw all white men (or almost all men, I can only assume) sitting on the compensation committee and the management committee, and leading the compensation tables, he would have assumed that this was all about merit. Men run law firms, make all the compensation decisions, and earn more because men work harder, are more aggressive, more committed, and so on. The assumption is that women could earn more if only they wanted it more. If only they golfed more with the dudes, drank more scotch, and smoked more cigars. Nothing he said surprises me.
But is Tory wrong in saying that women earn less because they negotiate less?
The idea that women earn less because of a variety of objective facts unrelated to sex discrimination and bias has long been a central tenet of neoliberal economic thought. In his seminal book An Economic Analysis of Law, Richard Posner, one of the godfathers of the law and economics school, argued that women earn less than men because they devote a much greater share of their ‘human capital’ to ‘household production’ than do men, which is reflected in their earnings levels. This life choice also influences the types of job they select. They are more likely than men to choose careers that have fewer hours, less travel, and less danger than men. These types of jobs pass less.
Moreover, ‘free markets’ will correct gender discrimination. Richard Epstein (another University of Chicago law and economics guru) explains why in his book Simple Rules for a Complex World: “If there were large numbers of women who received wages that were below their market worth, some new entrant could reap enormous returns by hiring [only women].” This would increase demand for women workers, and eventually their wages would rise as the market moved towards ‘equilibrium’. This is what is argued in this segment from an American talk show:
The factor of negotiating strategy was identified later on, and there are indeed many studies that suggest what Tory claimed–that women are less aggressive in salary negotiations than men. For example, one oft-cited 2003 study of graduating business students in the US found that 57% of men asked for a higher salary in initial salary negotiations while only 7% of the female students did. Students who negotiated (mostly the men) earned a starting salary on average 7.4% higher than students who did not attempt to negotiate. (L. Babcock & S. Laschever. “Women Don’t Ask: Negotiation and the Gender Divide).
Yet those studies tell only part of the story. Other studies have found that women actually suffer when they are aggressive in negotiations, because that behaviour is perceived as unfeminine. Women are expected to be ‘nice’ and ‘less aggressive’, and it turns off employers to meet an aggressive women in wage negotiations. Research has concluded therefore that “women are damned if they do, damned if they don’t” when it comes to being more aggressive in salary negotiations. Here’s how one study summarized the literature:
By now it is well documented that women, unlike men, often experience a “damned if they do, damned if they don’t” impression management dilemma characterized as follows: Engaging in behaviors required to enhance perceptions of competence (e.g., self-promotion in a hiring context) often produces social costs. However, failing to engage in [these] behaviors leaves women vulnerable to being perceived as less competent than their male peers. The devaluing of women leaders who exhibit a masculine style is consistent with this “Catch-22,” as the traits associated with effective leadership are typically masculine. The trade-off is produced by the mismatch between behaviors required to project competence and the prescriptive elements of gender stereotypes [Kray, Locke, Van Zant, “Feminine Charm: An Experimental Analysis of its Costs and Benefits in Negotiations” (2012) 38 Personality and Social Psychology Bulletin 1343]
So, it’s not that Tory is ‘wrong’ in pointing out that negotiation strategies and gender differences can make a different. They can. But that is also an over simplified story. A women who came to Tory
aggressively seeking a move up the compensation ladder is more likely than a man to be perceived negatively by him and the other the men that tend to make compensation decisions in corporations and law firms. The comment about women needing to golf more just confirms what critics of the wage gap have been saying for years: that the systems used to reward workers are biased in favour of men. Tory doesn’t seem to perceive any problem with that, and indeed, this system has served him well over the years.
Issues for Discussion
What do the studies brief described in this post suggest for the role of law in addressing the gender wage gap? Can law ‘fix’ the wage gap? Should it try?
Do you think the criticism of John Tory for his comments is fair?
Do you think John Tory has ruined any chance he had to win a Mayoral election by saying that women should just negotiate harder and play more golf if they want to earn more?