Tackling the Gender Wage Gap in Tech

Examining the layers of bias and history that perpetuate unequal pay structures

By BOBO CHAN

It’s still a man’s world in the tech industry. Even after the #MeToo movement and the blow-up of numerous Silicon Valley harassment scandals, this industry remains rife with challenges for women hoping to ascend the career ladder in tech companies like Facebook and Google. Being paid less than their male counterparts is one of them. 

Despite the number of women in universities surpassing men worldwide (The Hechinger Report), women’s median annual earnings peaked around 20% below men’s in 2016 (The New York Times). In 2018, the World Economic Forum estimated that it would take 202 years to close the global gender pay gap. 

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Accounting for the persistent gap in how women and men are paid is no easy task, but the issue can be distilled down into several key factors, including work culture that inhibits women from rising to senior management roles. And while the scope of the problem has been acknowledged repeatedly, change has been slow to come. 

Less diversity, less retention 

In 2019, San Francisco-based tech recruitment firm Hired found that in 60% of cases, women are offered lower pay compared to their male counterparts for the same role at the same company; additionally, 16% of women who were being paid less than men discovered that the difference was a minimum of $20,000 (CNBC). These results imply that tech companies undervalue female employees primarily on the basis of gender, even when they possess the same skill set as their male counterparts. 

Minority groups face additional obstacles. Latina and Black women received 91 cents and 89 cents, respectively, for each dollar paid to a white man–for the same role within the same company (Vox). Moreover, research shows that the average gender pay gap in U.S. technology companies of 3% becomes 8% for LGBTQ+ women (CNBC). 

Lower pay in female-dominated industries further skews pay equity: research shows that when more women join a field, the average pay in that occupation may decline. One such example is coding, an occupation formerly associated with secretarial duties that later grew into a male-dominated and lucrative profession (Economic Policy Institute). 

Alarmingly, these discriminatory pay-setting practices may also exacerbate the lack of diversity in this industry. For instance, 32% of women begin leaving tech companies when discovering pay discrepancies, according to Hired, which highlights the wage gap itself as a significant deterrent for many women hoping to pursue a successful career in STEM. 

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Another common deterrent of working in tech for many women is mistreatment. The prevalence of sexism in tech companies has been well-documented. Former Uber engineer Ana Medina, quoted in Emily Chang’s book Brotopia, said, “You get sexual advances and people hitting on you 24/7.” And in a group of over 2000 American adults who left a job in tech, 31% of women cited unfair treatment as their cause for resignation (Kapor Center). 

Covert forms of discrimination, too, affect women’s decision to leave–59% of women of color said being passed over for promotion catalyzed their choice to leave the tech industry (Kapor Center). 

Tech companies consequently struggle to retain diverse talent, which poses further risks to the future of diversity in STEM overall. Disillusioned by a hostile work environment and a pervasive wage gap, women are made to feel unwelcome in the tech industry. Many women ultimately come to the reasonable conclusion that they should be working in places where they may be treated better, and with their departures, the process of achieving pay equity takes another hit. 

The impact of outdated attitudes on women in tech 

Implicit gender biases undeniably account for the underrepresentation of women at almost every level of the STEM industry. They also come into play when it comes to compensation and work benefits. 

For instance, attitudes on maternity leave are particularly detrimental to women’s progress in scaling the management ladder. Researchers from Harvard Business School’s Gender Initiative found that managers give travel assignments to men more frequently, under the assumption that women would prefer to stay with their families (The Washington Post).  

However, Former Kleiner Perkins Partner Ellen Pao was quick to dispel the notion that women “opt out” of their jobs for childcare. She stated emphatically in her book, Reset, that many women leave tech later in their careers not because of a desire to carry out maternal duties full-time, but due to the sexist power dynamics that they often encounter in the workplace. This in turn has implications for the hiring and salaries of women in junior positions.

It is this lack of female representation in managerial and senior positions, particularly in tech startups, which contributes to a ‘boys’ club’ dynamic that keeps women from rising through the ranks. This also serves to preserve the gender wage gap, as there are fewer change agents with a say in salaries at the highest levels of tech companies.

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This was clearly illustrated in reports on Facebook’s internal peer review system. The Wall Street Journal found that reviewers were more likely to reject code written by female engineers. However, in a follow-up study conducted by Facebook’s head of infrastructure Jay Parikh, it was found that this was not due to gender, but engineering rank–implying that female representation in senior engineering positions is too low (Wired).

The skewed burden of domestic work further stands in the way of women looking to take up careers in high-paying tech companies or break the glass ceiling. Globally, women reportedly spend around 4.5 hours per day on unpaid domestic work, whereas men give less than half that time (The Washington Post). Gendered domestic duties assigned to women especially constrain the time they have for jobs that are high-paying but demand excessively long working hours, and inhibit their ability to rise to senior roles within them (Economic Policy Institute).

On top of all the other data, a recent Business Insider report found that amid the thousands of IPOs in the U.S since the first listing on the NYSE, only about 20 of the companies were helmed by women. Among other reasons, the publication pointed to representation in VC: only 13% of investors are women, and less than 3% of funding flows to women-led companies. Thus, following a path laid out by history, it’s largely men who end up leading large tech companies, largely women and minorities whose salaries suffer for it, and the vicious cycle is thus primed to repeat. 

Better days ahead? 

At present, Google and other Silicon Valley tech companies like Pinterest and Quora are implementing anti-bias practices such as basing promotion decisions on peer recommendations from colleagues who have undergone awareness training (Entrepreneur). 

A slew of major tech companies have participated in gender wage transparency, with the objective of holding tech companies accountable for diverse hiring (Forbes). Silicon Valley giants Apple, Facebook, Microsoft and Google have all published gender pay reports, which may be indicative of positive progress. 

A 2018 study by researchers Bennedsen, Simintzi, Tsoutsoura and Wolfenzon even found that when a Danish law required public pay disclosures, the gender wage gap shrunk 7% for the companies that revealed their pay reports. Women also had a higher chance of being promoted within these companies. Though it’s important to note that the women in these examples were not paid more–men’s increments simply slowed down–the study’s findings imply that pay transparency is indeed conducive to closing the wage gap. 

More large corporations are also investing money in diversity and equal pay. For example, cloud-based software company Salesforce claims to have spent $10.3 million to achieve pay equity. 

Though fintech giant PayPal says only 24% of its female employees work in technical roles within the company (CNET), it pays its male and female employees equally, with women holding a third of its leadership roles in 2016 (PayPal). 

And in 2019, Intel achieved gender pay equity globally. The company said it worked with an outside vendor to use “proven statistical modeling techniques” to identify the gender wage gaps in Intel branches across over 50 countries, and adjusted pay accordingly. Intel also announced its aim to increase female representation in senior roles, and publicly disclosed its pay practices (CNET, Engadget). This may set a precedent for other Silicon Valley giants with regard to creating a culture of greater diversity and inclusion. 

At the current rate of change, it may be another 12 years before female representation in tech becomes balanced, according to a 2020 report conducted by AnitaB.org, a nonprofit advocating for women in technology. 

But in the meantime, we can equip women with tech-related opportunities, focus on ensuring that the hiring process allows for diversity, and create a healthy work environment in tech that will retain female employees and give credit where it is due–ultimately dismantling the gender wage gap for good.

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