Selling Women Short

Selling Women Short: Gender and Money on Wall Street

Louise Marie Roth
Copyright Date: 2006
Pages: 284
https://www.jstor.org/stable/j.ctt7rz99
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  • Book Info
    Selling Women Short
    Book Description:

    Rocked by a flurry of high-profile sex discrimination lawsuits in the 1990s, Wall Street was supposed to have cleaned up its act. It hasn't.Selling Women Shortis a powerful new indictment of how America's financial capital has swept enduring discriminatory practices under the rug.

    Wall Street is supposed to be a citadel of pure economics, paying for performance and evaluating performance objectively. People with similar qualifications and performance should receive similar pay, regardless of gender. They don't. Comparing the experiences of men and women who began their careers on Wall Street in the late 1990s, Louise Roth finds not only that women earn an average of 29 percent less but also that they are shunted into less lucrative career paths, are not promoted, and are denied the best clients.

    Selling Women Shortreveals the subtle structural discrimination that occurs when the unconscious biases of managers, coworkers, and clients influence performance evaluations, work distribution, and pay. In their own words, Wall Street workers describe how factors such as the preference to associate with those of the same gender contribute to systematic inequality.

    Revealing how the very systems that Wall Street established ostensibly to combat discrimination promote inequality,Selling Women Shortcloses with Roth's frank advice on how to tackle the problem, from introducing more tangible performance criteria to curbing gender-stereotypical client entertaining activities. Above all, firms could stop pretending that market forces lead to fair and unbiased outcomes. They don't.

    eISBN: 978-1-4008-4079-3
    Subjects: Management & Organizational Behavior, Sociology

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface and Acknowledgments
    (pp. ix-xiv)
  4. INTRODUCTION
    (pp. 1-10)

    Not so long ago—as recently as the mid-1980s—Wall Street was one big men’s club of smoke-filled rooms and strippers on the trading floor. Women, to the degree that they were welcome at all, were relegated to roles as secretaries and sex objects. Firms blatantly discriminated against the few women who did fight to become traders, and court cases demonstrate a long history of groping, name calling, come-ons, blocked mobility, and sexual pranks. Since then, women have made great inroads into jobs on Wall Street, and Wall Street firms have largely cleaned up their act. You would be hard-pressed...

  5. Chapter 1 THE PLAYING FIELD: Wall Street in the 1990s
    (pp. 11-35)

    Wall Street investment houses are the pinnacle of the securities industry, which mediates the flow of finance capital from investors to corporations, tax-exempt organizations, and other corporate entities like governments. Wall Street is supposedly “a citadel of pure economics, where pay for performance would seem to be the ruling ethic.”¹ The compensation system on Wall Street is a rational incentive structure in which bonuses comprise the majority of workers’ pay and are supposed to reflect the amount of revenue they generate for the firm—simple enough. Bonus structures provide incentives to invest effort, skill, and time in the pursuit of...

  6. Chapter 2 PAY FOR PERFORMANCE: Wall Street’s Bonus System
    (pp. 36-57)

    An important feature of Wall Street is a bonus system that pays workers on the basis of performance evaluations. Unlike occupations that pay hourly wages or annual salaries, this is a variable compensation system. Most Wall Street professionals receive a fixed salary of $80,000–100,000 per year, but the majority of their pay takes the form of a bonus that is based on performance reviews. Wall Street’s bonus system allowed workers in the 1990s to reap the benefits of booming financial markets. Among workers who received a bonus in 1997, the median total pay was $410,000, suggesting that the average...

  7. Chapter 3 A WOMAN’S WORTH: Gender Differences in Compensation
    (pp. 58-70)

    Few will be surprised that there is still gender inequality in a male-dominated environment like Wall Street. Despite laws forbidding gender discrimination in employment since 1964, continued gender inequality in the U.S. labor force has been well documented. Inequality in average pay has declined since the 1960s, when female full-time, year-round workers earned an average of 60 percent as much as their male counterparts. By the late 1990s, women were earning an average of 75 percent as much as men, partly due to increases in women’s wages and partly due to declines in men’s. But this falls short of equality,...

  8. Chapter 4 MAKING THE TEAM: Managers, Peers, and Subordinates
    (pp. 71-99)

    As we have seen, there was a large unexplained gender gap in pay on Wall Street in the late 1990s. Given that the bull market should have discouraged systematic inequality that was unrelated to productivity, what stalled progress toward gender equality? An important source of subtle discrimination involved relationships with managers and coworkers, which shaped the opportunity context for individuals’ careers.¹ Anyone who has ever held a job knows that office politics always matter. Even when salaries are fixed, relationships with managers and coworkers influence the likelihood of receiving a promotion or being laid off. But Wall Street’s performance review...

  9. Chapter 5 BRINGING CLIENTS BACK IN: The Impact of Client Relationships
    (pp. 100-117)

    The last chapter suggested that managers’ and coworkers’ preferences—for others like themselves and more generally for men—often reduced women’s opportunities to perform, influenced evaluations of women’s performance, and reduced women’s pay in ways that were unrelated to performance. But what about clients? Did clients share these preferences? And how did client relationships affect the jobs held by women, their opportunities, and their pay? In this chapter, I look at how Wall Street workers perceived client relationships, and how these perceptions sifted men and women into different areas and influenced their opportunities and pay. Managers also acted on assumptions...

  10. Chapter 6 HAVING IT ALL? Workplace Culture and Work-Family Conflict
    (pp. 118-147)

    The last two chapters illustrated how Wall Street’s compensation system permitted subtle gender discrimination in relationships with managers, coworkers, and clients to influence gender inequality in pay. Work-family issues also contributed to the gender gap in pay because a workaholic organizational culture clashed with the broader cultural assignment of child-rearing responsibilities to women. Workplace time norms equated time on the job with commitment to the job and demanded all-encompassing career devotion. These norms converged with the gender division of family work and gender discrimination to create a set of institutionalized obstacles to women’s equality. In this chapter, I examine how...

  11. Chapter 7 WINDOW DRESSING: Workplace Policies and Wall Street Culture
    (pp. 148-166)

    While the discrimination described in the last three chapters was subtle and structural, workplace policies could have helped more women to succeed on Wall Street. Effective hiring initiatives, sexual harassment policies, and diversity programs could have improved women’s odds, and legal settlements in high-profile discrimination cases allocated money to fund these types of initiatives. Flextime or flex-place policies could have eased work-family conflict and made better use of the skills and experience of women with children. Some work-family specialists and human resource managers have even argued that work-family policies make good business sense because they help employers recruit, retain, and...

  12. Chapter 8 BEATING THE ODDS: The Most Successful Women
    (pp. 167-178)

    Earlier chapters have shown that women on Wall Street usually did worse than men because of subtle discrimination in account assignment and performance evaluations, a masculine culture, and family-related pressures. But 27 percent of the women were highly successful in their first five to seven years on Wall Street.¹ These women’s 1997 compensation ranged from $415,000 to $750,000, with an average of $588,750.² Their cases challenge beliefs that gender is destiny and shed light on the prospects for gender equality in high-intensity jobs. Like many men, these highly successful women encountered expanding career opportunities in the 1990s bull market. The...

  13. Chapter 9 THE MYTH OF MERITOCRACY: Gender and Performance-Based Pay
    (pp. 179-196)

    As chapter 8 revealed, some women succeeded on Wall Street despite the subtle discrimination and prevalent workaholism. Some might think that the existence of successful women supports the notion of a Wall Street meritocracy and therefore that less successful women deserved lower pay because they made personal choices that derailed their careers. But merit alone cannot explain the differences in men’s and women’s career trajectories.

    The fact remains that women who were equal to their male counterparts as a group made less money. This is even more surprising given that Wall Street firms compete for the most talented individuals; this...

  14. Appendix A METHODOLOGY
    (pp. 197-204)
  15. Appendix B QUANTITATIVE MEASURES AND MODELS
    (pp. 205-212)
  16. Appendix C INTERVIEW SCHEDULE
    (pp. 213-236)
  17. Notes
    (pp. 237-252)
  18. References
    (pp. 253-264)
  19. Index
    (pp. 265-269)