As part of the lead up to the White House Summit on Working Families, we have been seeking input from a wide variety of stakeholders to identify best practices for developing workplaces that work for all Americans and better meet the needs of women and working families. We did not think this goal could be achieved without thinking of the business leaders of tomorrow, and that is why today, we met with a group of deans from our nation’s leading business schools to discuss best practices for business schools that can better prepare their students for the increasing importance of women in the labor force and the prevalence of employees with families where all parents work.
Women are now more likely to graduate with a college degree and are increasingly entering formally male-dominated professions, however recent research has shed light on the issues still facing professional women. Women not only start their careers with lower pay, but the pay gap grows over time. One study of MBA graduates from a leading institution found that women earned $115K on average when they graduate and $250K after nine years while men earn $130K when they graduate and $400K after nine years. CEA analysis has shown that a similar trend holds for all men and women with a professional degree—the pay gap grows over time and earnings are more than 50 percent higher for men when professionals are in their late 30s.
One important reason for this disparity is the lack of flexibility in the workplace. Surveys of MBA graduates demonstrate that women are penalized due to career interruptions, often from motherhood. Even if women are working, they often must accept positions that offer significantly lower pay or growth opportunities in order to have flexible work schedules to balance responsibilities outside of the workplace. CEA has found that married women with young children contribute less to family earnings than married women without children, likely for this reason. Although some industries have embraced part-time work, flexible work schedules, and policies that make it easier to reenter the workforce after taking a leave, many high-powered careers still lack workplace flexibility and are losing out on talent—both men and women—as a result.
Research also suggests that even workplaces free of overt gender discrimination can have barriers that prevent talented women from reaching their potential and fully contributing to their organization. Studies have found that mentoring can be successful in helping women advance in their careers by imparting leadership skills and guiding future leaders through an organization. There is also evidence that mentors, especially female mentors, can help women with quality of life issues, including balancing family responsibilities. However, women often struggle to find mentor relationships, especially with male superiors.
In addition to these issues, today’s meeting examined leadership, retention rates, business school culture, and the timing of business school in the lifecycle. Business schools can take important steps to prepare the next generation of business leaders to focus on these issues. Too few businesses recognize that many of their workers need to be able to balance home and professional responsibilities and are failing to acknowledge that simple policy changes will help bolster a company’s productivity through attraction and retention of the most talented and educated workers. In order to ensure business practices that fully utilize a 21st century workforce, it is important for business school deans to update their curriculum and practices to fully reflect the importance of women and working families in our labor market.
In the weeks ahead, we will work to compile best practices that will then be signed on to by a larger group of business schools than those attending today’s meeting. This will also contribute to the larger goal of the White House Summit on Working Families. The Summit will convene businesses, economists, labor leaders, legislators, advocates, and the media to discuss issues facing the entire spectrum of working families. The discussions will focus on key issues such as: workplace flexibility, equal pay, pregnancy discrimination, paid family and medical leave, worker retention and promotion, and childcare/early childhood education.
We would also like to thank the business school deans who contributed to today’s valuable discussion:
For more details on the Working Families Summit and how you can get involved, visit http://workingfamiliessummit.org/.