Jordan Peterson can feel triumphant. The controversial Canadian University professor has long been claiming that the gender pay gap in elite industries is less down to discrimination than to women’s tendency to work far shorter hours than men. Now he’s been vindicated by…the New York Times (of all places).
In a long article at the weekend, the NYT argued that, ‘There’s no gender gap in the financial rewards for working extra long hours.’ - It’s just that, ‘far fewer women do it, particularly mothers.’
To help make its point, the NYT turned to two corporate lawyers, Daniela Jampel and Matthew Schneid. Both graduated from Cornell University. Both took jobs at the sort of law firm that offers, ‘seven figure pay.’ But while Schneid now works between 60-80 hours a week, Jampel only works 21 so that she can look after their five year and one year old children. As a result, Jampel earns up to 83% less than her husband.
Children are the issue here: when one parent is working 80 hours a week, someone has to keep the children ‘alive.’ And that’s most often the mother. Most working mothers don’t want the ague that comes from getting to the top in so-called ‘greedy occupations’ where employers expect to be preeminent at all times. The NYT says these include law, and consulting and – obviously – finance.
Peterson isn’t the only academic to have spotted the issue. Claudia Goldin, an economist at Harvard, is writing a book on the topic. Professors at Indiana University, Cornell and the European University Institute have conducted similar research. They found that the premium for working more than 50 hours a week has increased in recent decades– and that the people earning this premium are most often men.
The academics have an array of statistics to support their case. Among fathers, 20% now work at least 50 hours a week, compared to just 6% of mothers. 75% of men in the top 1% of earners have a stay-at-home spouse, compared to 25% of women in the same category. And if a man works more than 60 hours a week in a professional or managerial job, his wife is three times more likely to quit work than if he doesn’t (the same doesn’t apply to husbands with wives in the same position).
Of course, men and women could split work evenly. But this would mean both miss out on the disproportionate pay premium that comes from 80 hour weeks. Or, very hardworking working mothers could employ nannies or engage grandparents. But the NYT notes that this would fly in the face of another contemporary trend for highly educated mothers to spend far more time interacting with their children than in the past (the number of hours that college-educated parents spend interacting with children has doubled since the 1980s).
The upshot is that women like Jampel are taking a step back – and paying for it. “Being willing to work 50% more doesn’t mean you make 50% more, you make like 100% more,” she tells the NYT. “The trade-off between time and money is not linear. It took a long time to get myself to the point of accepting that.” Female bankers would undoubtedly agree.
Separately, the NYT also details a case involving the most useless financial professional in the world and his executive assistant. The EA in question was asked to book a flight between New York, Chicago and ultimately London for the colleague in question. The colleague forgot to bring a passport along and now the EA says she faces redundancy. “H.R. told me that it was my responsibility to ensure that the executive brought his passport. I feel that since he is an adult, and a seasoned traveler, he should have been responsible for bringing along proper travel documents,” she says. Agreed.
McKinsey & Co. is now hiring people using a 60 minute ‘digital assessment game.’ It takes an hour and tests how potential employees think and make decisions. (Forbes)
JPMorgan’s shares are up 17% this year. Citigroup’s are up 34%. Deutsche Bank’s are up…5%. (Wall Street Journal)
The German Mittelstand killed the Commerzbank deal- they remembered the financial crisis and didn’t want to deal with one large German bank. (Bloomberg)
Ex-Deutsche Bank boss John Cryan became the chairman of X Cyber Group, a small cyber security business. (Financial News)
The chief executive of Lloyds wakes up at 5.25am and gets home for 8.30pm. (Sunday Times)
Barclays has been thinking of spinning off its investment bank since 1998. (The Times)
Barclays raider Edward Bramson wears high waisted trousers. (Financial Times)
Goldman CEO David Solomon is hosting a swanky dinner for guest including the head of Saudi Arabia’s sovereign wealth fund. Jamal Khashoggi is forgotten. (Variety)
Warren Buffett comes from a family of green grocers. He lives in the same house he bought in the 1950s, when he ran a tiny investment partnership. He still works at the desk his father, a stockbroker turned Republican congressman, used 75 years ago. (Financial Times)
It’s worse to be a silver medalist than a gold medalist – you spend more time thinking about how you could have won. (BPS Digest)
You can be aroused by simply walking past a coffee shop. (BPS Digest)
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