The Invisible Barrier to Growth Facing Women Business Owners
March 14, 2023
Many women (myself included, before writing this article), believe that discrimination is the reason women still earn far less than men in what’s known as the gender wage gap.
However, it’s not that simple.
Women aren’t getting paid less for the same work. We’re getting paid less for different work, and there’s one clear cause behind that.
I recently launched a mastermind called 509 Female Founders which teaches hard skills such as business development, finance, operations, and marketing. Out of curiosity, whenever someone was invited to participate but declined, I asked why, and tracked their answers.
Three reasons emerged, in roughly equal parts. If you guessed time and money for two of them, you’re correct. But the remaining third said no because they were someone’s primary caretaker. The barrier to growth for these women was prioritizing family.
Let’s explore a few examples:
In the case of a public relations professional who registered but had to drop out within the first few weeks, her husband was diagnosed with a rare form of cancer. She felt compelled to stay with her full-time job rather than focus on building her new business so that she would receive healthcare, and be able to take care of her husband and son.
Another founder, a private yoga and ayurveda instructor, replied: “I know it would benefit my business, but I also have some financial commitments…” AKA, two kids in college.
A glass artist and entrepreneur-in-training offered that despite being clear on her business goals, she had aging in-laws and parents who required her care.
How did we get here? Just how pervasive is the Mommy Tax?
I spent hours pulling data from various sources, and this is what I learned.
Women self-select or are forced to choose occupations with more temporal flexibility. These roles also tend to be valued less by society. In this way, Harvard’s Henry Lee Professor of Economics, Claudia Golden, explains: it’s more wage discrimination than gender discrimination.
Golden uses the example of two people with law degrees—a man and a woman. When the woman has a child, she often chooses to make a lateral or backward step in her career to pursue, say, a position in legal counsel rather than one requiring more time in the courtroom. Since the demands on her time are lower in this role, she is paid less. But, this affords her the ability to better balance her responsibilities as a mother.
The same rings true in business:
Of top male executives, over 90% have children, as opposed to around 60% of top female executives.
Women opt out of or eschew these roles from the beginning due to a system that was not designed to meet their needs.
Another important distinction is that men’s work is generally valued higher than women’s. A friend who does expeditionary STEM work shared: “The priority/discrimination argument has always rung a little hollow for me. We choose how to assign value to work, and folks who control resources have a disproportionate impact on valuation, hence women’s priorities on average being assigned lower economic value.”
How did this happen?
A good place to start is Fair Play Documentary, a film by Jennifer Siebel Newsom in partnership with Hello Sunshine. Author of the eponymous book that inspired the film, and focal point of the documentary, Eve Rodsky, explains: “As a society, we view and value men’s time as finite, like diamonds. We view and value women’s time as infinite, like sand.”
In addition to childcare, women still also do the lion’s share of the housework—approximately two thirds. This is what’s known as the division of labor.
Rodsky summarizes the work of psychologist Arlene Kaplan Daniels, who argued that, “because women do it, and it’s in the domestic sphere, it benefits society if we devalue it, if we consider it worthless, because then we don’t have to pay for it.”
Katie Porter, US Representative in California’s 45th district echoes, “There’s this hidden message there, which is that it’s just too expensive to support women. Wouldn’t it be cheaper if we just let women keep doing it all, for free?” In essence, it’s both easier and less costly to build a nation on the backs of invisible, unpaid labor.
If any of this is starting to make you sad, please feel free to seek a moment of comic relief in the form of Ali Wong’s Hard Knock Wife stand-up at 7 months pregnant.
After that, check out the podcast episode, How the Gender Pay Gap Works, where co-host Chuck paraphrases Anne-Maire Slaughter, former United States Director of Policy Planning, describing the Care Penalty: “Women are more likely to care for their parents when they get old, a sibling who needs help, and especially children.”
Slaughter’s work is referenced again in Fair Play: “If you take women who don’t have caregiving obligations, they’re almost equal with men. It’s somewhere in the 95% range. But when women have children, then they need to work differently. They need to work flexibly or part-time. They often get less good assignments. Then you don’t get the same raises. Your boss thinks you’re not committed to your career. That means you might not get promoted.”
Just how wide is the gender wage gap, exactly?
As of the 2022 census, women in the USA, on average, earn $0.83 to a man’s dollar.
Here’s the breakdown by race:
White, $0.83
AANHPI, $0.75
Black, $0.64
Latina, $0.54
Native American, $0.53
Mothers typically earn $0.58 to a father’s dollar, women in the LGBTQ+ community earn $0.87 for every dollar the typical worker earns, and around the world, women average $0.50 to a man’s dollar.
To illustrate what this means temporally, the milestone Equal Pay Day was created. This moving date symbolizes how far into the year women would have to work to earn what men earned in the previous year. This year, Equal Pay Day will fall on Tuesday, March 14. (Keep in mind: This is merely the average for white women in the United States—Equal Pay Day for women of color would occur much later in the year.)
So what are we to do about it?
Professor Golden believes that if more flexible work arrangements were made available to women, the gender wage gap might disappear entirely.
For example, during the height of WWII, when women were called to work (think: Rosie the Riveter), the US government spent approximately one billion dollars per day on childcare for these women “out of necessity.” But, once the men returned, those jobs (and the accompanying childcare) evaporated. Hammers were swapped for pearls, wrenches for vacuum cleaners, and we saw the rise of the 1950s housewife.
For this to change, it would require restructuring our institutions in ways that better favor and support women. For example, Golden recommends extending the school day and the school year. Employer-provided childcare would also be a bonus. C. Nicole Mason, President and CEO of the Institute for Women's Policy Research, spoke for many women when she said: “If I worked at a job and there was childcare, I would never leave!”
To their credit, men typically work harder after starting a family, possibly to get away from the chaos, but also due to feeling they need to bring home even more bacon. It’s also worth mentioning that, in terms of the division of labor, it’s not just that domestic and caretaking responsibilities fall disproportionately on women, it’s that all parents seem to be doing more.
A friend of mine, the mother of two highly creative and energetic boys, framed it for me this way: She feels that two of her women friends, who are partners, each do 75% of the caretaking for their kids. Come again? What she meant was, they’re giving a collective 150%. It seems parents are giving more today than they were several decades ago, and she’s right. Fair Play points out:
“American mothers spend more time today on child care and domestic work than moms did in the 1960s, despite being more likely to be in the workforce.”
Ironically, the Equal Pay Act was passed in 1963.
When my partner helped edit this article, he pointed out that capitalism is also to blame. Where we might’ve had a fighting chance at achieving work-life balance in previous decades, for some of us, life has taken on such a frenetic pace that it’s a runaway train of status-seeking “keeping up with the Joneses” that’s simply unsustainable.
And we’re teaching it to our kids.
Just ask paleobiologist and author of The Story of More, Hope Jahren, who explains that, in order for ours and future generations to thrive on this earth with any chance of mitigating climate change and avoiding depleting our resources, we’d all need to revert to the standard of living enjoyed by Swiss people in the 1960s.
What can we learn from this? Where is the opportunity to make change? How can we create a rising tide that lifts all boats?
While walking the grounds of a monastery with a colleague who recently opened a mobile coffee stand with the help of a $15K Kickstarter, I asked what she thought the top three barriers were from my little experiment: time and money came fairly easily, but when I revealed the third, she looked perplexed. To her, family isn’t a barrier, it’s her reason for being. She’s also right—the picture the data are painting is not necessarily one where women resent their role as caretaker, but for some, it is simply so primordial that they will shape their whole lives around it.
I don’t have kids, and I don’t have the answer. But I do have questions, and know that the solution resides in inviting everyone to join the conversation.