Why are Women Paid Less? - An Examination of the Pay Gap in Purchasing
Author(s):
John M. McKeller, D.B.A., C.P.M.
John M. McKeller, D.B.A., C.P.M., Assistant Professor, University of Wisconsin-Madison, Madison, WI 53706, 608/262-7371.
79th Annual International Conference Proceedings - 1994 - Atlanta, GA
INTRODUCTION
During the last decade, considerable attention has been given to the subject
of gender as an influential factor in determining various employment
attributes. Because the demographic profile of the National Association of
Purchasing Management (NAPM) is increasingly female, it is certainly important
that association members are aware of how gender may influence an individual's
job satisfaction, potential for promotion, career choices, and management
styles. However, of immediate importance is a recognition of the apparent
salary inequities which continue to exist between men and women in the
purchasing profession, why they may exist, and what may be done to help
eliminate them.
Therefore, the objective of this presentation is to provide the
following:
- a review of the generally acknowledged relationships between gender and
compensation;
- an overview of some factors which purportedly influence the differences
between male and female compensation;
- an explanation of a statistical analysis conducted using U.S. Department
of Commerce, Bureau of the Census, March 1991 Current Population Survey
data on women and men employed in purchasing occupations;
- conclusions resulting from the statistical analysis and recommendations
for necessary changes within the purchasing profession.
RELATIONSHIPS BETWEEN GENDER AND COMPENSATION
The correlation between employee compensation and gender has been shown to be
significant for many professions and categories of employment. Statistical
evidence has continuously confirmed the fact that females earn significantly
less than males. On average, women employed in American firms are reported to
earn 30-40% less than their male counterparts. In the purchasing profession,
the income disparity between men and women has been repeatedly documented by
an annual Purchasing magazine "Salary Survey". Therefore, female purchasers
appear to have good reason to be dissatisfied with their incomes.
FACTORS WHICH INFLUENCE THE GENDER "PAY GAP"
Various theories exist regarding the factors or combination of factors which
cause the perpetual male/female "pay gap". Several factors which are
repeatedly identified as contributory to the income disparity include:
- the biological facts of child bearing;
- a woman's family responsibilities;
- women's career opportunities and choices;
- women's level of education;
- and women's level of business experience.
CHILDBEARING AND FAMILY RESPONSIBILITIES
The capability to reproduce another human being is exclusively female
and women still choose to have children in spite of their perception that
maternity leave and subsequent family responsibilities negatively impact their
careers. Pregnancy may suspend a woman's career either voluntarily or
involuntarily and thereby interrupt the continuity of employment and
experience necessary for promotions and wage increases.
In addition to the biological fact that women alone can bear children,
society allocates to women the major responsibility for their subsequent care.
This may force women to accept part-time or lower paying jobs which allow them
the flexibility to accommodate the demands of parenting during their
offspring's early childhood.
WOMEN'S CAREER CHOICES AND OPPORTUNITIES
With few recent exceptions, the majority of traditionally high paying
professions, trades, and job categories are still male dominated. It has been
suggested that women choose to enter traditionally female or lower paying
occupations as a consequence of other factors such as family responsibilities,
pregnancy, and the need for work schedule flexibility. Therefore, because
women choose employment in traditionally lower paying positions, their average
compensation is less than that of men.
However, research has shown that equally qualified women who enter
traditionally male dominated occupations are not provided with the same career
opportunities as their male counterparts. This too leads to comparatively
lower incomes. Furthermore, breaking the traditional male domination of a
field may by itself lower salaries for everyone. It has been determined that
there may be a correlation between the ratio of women and men employed in a
field and the average salaries paid to individuals in that field. As female
representation in an occupation increases over time, the average salary paid
to personnel in that occupation may decrease.
WOMEN'S LEVEL OF EDUCATION
For many years, Purchasing magazine has conducted annual salary surveys
of its subscribers. During the last decade the results of the surveys have
shown a wide gap in the average compensation paid to men versus that which is
paid to women." The average pay gap between male and female respondents in
1993 was almost $ 15,000.
In addition to lower pay levels, female respondents in previous annual
surveys also reported educational levels below those of the male respondents.
The fact that women reported both lower income and educational levels than men
reported apparently led the publication's editors to assume an association
between education and income. However, the 1993 survey indicated that the pay
gap actually widened for women with more education.
The level of education among women in the general U.S. population has
increased significantly. About half of all undergraduate and masters degrees
are earned by women. Furthermore, as of 1990 women represented over a third
of all newly minted MBAs, and were awarded over forty percent of all
accounting and law degrees. However, studies confirm that a substantial pay
gap exists even for highly educated women.
WOMEN'S LEVEL OF BUSINESS EXPERIENCE
An assumption can be made that among most business employees it has
become customary to expect salaries to increase with experience. However,
women may not have the opportunity for continuous, uninterrupted employment if
they choose to have children. Interruption of employment can sidetrack a
woman's promotional potential and job awareness and therefore may contribute
to lower pay levels. Despite the fact that experience cannot be discounted as
a factor in the male-female pay gap, surveys demonstrate that experience alone
does not account for the majority of the difference. Given equal levels of
experience, professional women still earn less than their male counterparts.
RESULTS OF CURRENT POPULATION SURVEY ANALYSIS
In order to help further assess the extent of and reasons for the
reported male/female pay gap in purchasing, a sample of 240 personnel employed
in private sector purchasing occupations was drawn from the March 1991 Current
Population Survey. For reasons of required brevity, an entire explanation of
the sample and the statistical analysis is not possible within the text of
this article. (Further exploration of this topic will be submitted for journal
publication prior to the 1994 International Purchasing Conference.)
The average male salary was over $12,000.00 higher than that of the
average female salary. The descriptive analysis alone suggests that
male/female salary differences may be attributed to factors such as age,
education, experience, etc.
In order to assess the statistical relationship between salary and these
variables, a regression analysis was performed. From this analysis it was
determined that the pay differences between men and women cannot be accounted
for by the variables listed. When all variables were held constant, a
statistically significant difference still existed between male and female
salaries.
However, it cannot be assumed that control variables have the same
effects on both males and females. Therefore two additional multiple
regression analyses were conducted using female and male subgroups.
If the average female purchaser had been paid as if she were male, she
would have earned about $31,585.00. Therefore it may be assumed that only
48.33% of the pay differences between men and women can be attributed to
differences in the variables (e.g. age, education, experience, etc.). The
balance of the pay gap must be attributed to other unknown variables or to
other factors by which gender causes women to earn less.
CONCLUSIONS AND RECOMMENDATIONS
Because of the very limited sample size, it would be inappropriate to
make generalizations about the male/female pay gap in purchasing from the
Current Population Survey data analysis alone. However, the analysis of the
sample does seem to further validate previously cited research in other fields
which has shown that unidentified variables associated with gender have a
large influence on women's pay.
Discrimination against women in hiring, work assignment, and promotions
cannot be disregarded as potential factors which contribute the perpetual pay
inequity among male and female purchasing professionals. Women must accept
responsibility for closing the gap in experience and qualifications which
accounts for some of their wage differential. But we must all be responsible
for the elimination of gender bias as a controlling factor for salaries in the
purchasing profession.
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- Purchasing, "Salaries '93", December 1993, pre-publication copy provided
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and Work, The New Facts of Life, Warner Books, Inc., New York, NY, 1992, pp.
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- Ibid.
- Purchasing, "Salaries '93", December 1993, pre-publication copy provided
by the editor without page numbers.
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