Gender Pay Gap even in Entrepreneurship
The pay gap between genders is consistently in the news, especially during the ongoing campaign season. As a female, the statistics have caused some feelings of injustice but as an entrepreneur, I’ve never thought that this gap would impact me.
Recently I came across an article written by Editor-at-Large Kimberly Weisul for Inc.com called “Why Women Entrepreneurs Need to Raise Their Prices” which discusses how this gender pay gap applies for arms-length online transactions as well. The study Weisul discusses has the added benefit of clearer data than private company salary information that wider-circulated data since it’s pulled from Ebay and Amazon transactions. The part that stuck out the most for me was the last example. People were offered identical gift cards worth $100 on Amazon with the difference that one was being offered by “Brad” and the other “Alison.”
“Alison” was paid almost $4 less on average for the identical gift card. That is shocking!
Not only have I not taken these previous studies too seriously in the past with the erroneous assumption that they didn’t apply to me personally because I’m an entrepreneur and no one person is deciding my salary, but one of my favorite podcasts, Freakonomics, recently did an engaging story on the topic. From their research and interviews they conducted, they confirmed that a gender pay gap existed but concluded that the result is often because a premium has been placed on work-life balance at the sacrifice of wages. And who can blame anyone for taking a potentially lower paying position if you think the quality of life will be better?
While quality of life concerns (which include things like flex time) may explain some of the gender pay difference, it cannot explain the difference in these arms-length transactions on Ebay and Amazon.
Ladies, I think we may need to charge more.