In 2009, President Obama signed the Lily Ledbetter Fair Pay Act into law, thereby ensuring that women across the United States were finally paid the same as men. Just kidding! Women still only make 80% of what their male counterparts do. What is this bullshit? Why hasn’t pay equity been achieved yet? Economist Julie Nelson and journalist Claire Cain Miller join Nick and Steph to explain why this problem is so damn persistent, and to offer solutions for how we can fully include women in the economy.
Julie Nelson is a professor of economics and department chair at the University of Massachusetts Boston, most known for her application of feminist theory to economics. She is the author of ‘Economics for Humans’ and ‘Feminism, Objectivity, and Economics’.
Claire Cain Miller is a correspondent for The New York Times, where she writes about gender, families, and the future of work for The Upshot, a Times site for analysis of policy and economics. She was part of a team that won a Pulitzer Prize in 2018 for public service for reporting on workplace sexual harassment issues.
Economist Julie Nelson Says Much of Economics is a Sham Science
Claire C. M.: 00:02 A huge proportion of the remaining pay gap is basically because of babies.
Speaker 2: 00:08 If they make the World Cup roster, female players receive 44% of what their male counterparts earn.
Nick Hanauer: 00:15 It’s not just that we should do it for moral reasons. It just seems to me obvious that there are overwhelming practical reasons to address these problems.
Speaker 4: 00:24 Documents reportedly showing Oscar winner Jennifer Lawrence and costar Amy Adams reportedly earning less than their male costars on American Hustle, and a female executive at Sony making significantly less than her male counterpart.
Stephanie Ervin: 00:38 No power pose will make equality for women in economics possible.
Speaker 6: 00:49 From the offices of Civic Ventures in Downtown Seattle, this is Pitchfork Economics with Nick Hanauer, an honest conversation about how to make capitalism work for everyone.
Stephanie Ervin: 01:06 I’m Stephanie Ervin. I run a lot of our advocacy and campaign work here at Civic Ventures.
Nick Hanauer: 01:11 I’m Nick Hanauer, founder of Civic Ventures.
Stephanie Ervin: 01:16 You want to hear some crazy stats?
Nick Hanauer: 01:18 Yes. Tell me some crazy stats.
Stephanie Ervin: 01:20 In some occupations, women collectively are receiving billions less than they would with equal pay. So, for instance, women working as physicians and surgeons are paid 19 billion less annually than if they were paid the same as men in that occupation. What the fuck? 19 billion.
Nick Hanauer: 01:38 Yeah. Well, what’s 19 billion dollars between friends, after all?
Stephanie Ervin: 01:44 So, there was a McKinsey Report done not too long ago that looked at sort of the gender pay gap and reported that more equal pay in the workforce would increase the gross domestic product of the global economy by 26% by 2025.
Nick Hanauer: 02:00 Yeah, that’s a shocking amount, but of course, again, coming back to one of the lies of neoliberalism, that as wages go up, the economy will be harmed, but on the contrary, the more money we pay people, the more they consume. The more they consume, the more gets made. The more money people have, the more capacity they have to improve their lives. All of this is a positive feedback loop effect that benefits largely everyone except, in this case, giant insurance companies and healthcare executives. So, they are shocking numbers, but they are obvious when you zoom out and look at the underlying dynamics.
Stephanie Ervin: 02:39 I mean, these are just crazy. An October 2012 study the American Association of University Women found that over the course of a 35-year career, an American woman with a college degree will make about 1.2 million less than a man with the same education.
Nick Hanauer: 02:54 That is remarkable.
Stephanie Ervin: 02:55 We are collectively losing out on our billions. It makes me so mad. It makes me so mad. Women currently make up 70% of Medicaid recipients, 80% of welfare recipients. Increasing women’s workplace participation as we do in Sweden could add 5.1 million women to the workforce in America. It just highlights exactly what you just said, which is we could be growing our economy by just including the people who are already here a little bit more, making their participation not just as consumers or even as workers, but their participation as employers, as entrepreneurs, as inventors, and as leaders of our government a little bit easier, we would probably all be better off.
Nick Hanauer: 03:43 Yeah. Super true, and again, the pushback is always, well, we can’t afford it, or whatever, and these things are just not true. The country spent a trillion dollars last year in stock buybacks. If you devoted even 10% or 20% of that number to fixing these problems, again, a few rich people would be slightly less rich, but it would immeasurably improve the lives of millions of people and grow the economy faster.
Nick Hanauer: 04:13 So, in this episode we get to talk to a really remarkable woman, Professor Julie Nelson, who is an economics professor a University of Massachusetts, and who specializes in both economics and feminism. To be clear, not things that have gone super well together for a long time because of the way in which the economics profession has both treated women and contributed to things like the pay equity gap that we have in this country. But Julie is a super thoughtful person, and in particular, has written some really interesting things about the way in which the so-called scientific nature of economics is really a sham, what at Civic Ventures we love to call really a protection racquet for rich people in many ways, and she’s written really beautifully about that. So, it should be really fun to talk to her today. Hi, Julie.
Julie Nelson: 05:06 Hello, Nick.
Nick Hanauer: 05:07 How are you?
Julie Nelson: 05:08 I’m doing all right.
Nick Hanauer: 05:09 Good. Thank you for taking the time to chat with us. We’re so excited to talk to you.
Stephanie Ervin: 05:15 So excited.
Julie Nelson: 05:15 I’m Julie Nelson. I’m a professor of economics at University of Massachusetts Boston.
Stephanie Ervin: 05:21 So, I want to pick on one of the neoliberal myths, which is people are paid what they’re worth, and we know that today in America, on average, women are paid about 80% of what men make in general. So, are women making what they’re worth in that scenario? Is there any evidence that supports that?
Julie Nelson: 05:41 There’s a number of reasons to believe that there’s still a whole lot of unfairness and sort of male-directed bias that we’re not at a fair area yet, and there’s the obvious sexism that’s still around. The Me Too movement brought up issues of sexual harassment that still goes on, and even if women in the workplace aren’t being harassed, they’re still often taken less seriously. Something they say doesn’t actually exist until a man says it. There’s a feeling that women don’t belong in leadership. All of those sorts of attitudes are still around in some places.
Julie Nelson: 06:13 We’ve made progress. Women used to make about 60% as much as men for full-time work back in the early ’70s, so there’s some progress, but not very far. But there’s a couple of other things that are more subtle, but I think becoming increasingly important in explaining the wage gap, besides the obvious sexism, and these things are more systematic, and also, again, go back to that question about what economics has been teaching us. Economics has been teaching us that the people in commerce, in the economy, workers, our individual rational autonomous beings, economic man, and economic man doesn’t have any dependents. Economic man doesn’t have any family care responsibilities.
Stephanie Ervin: 06:53 Right.
Julie Nelson: 06:53 So, we have this whole norm in a lot of the workforce, that you should be able to work into the evening. You should be able to travel at a moment’s notice, do overtime any time. Right? All of which, those are killer demands if you’ve taken care of children or elderly parents or anyone else. Joan C. Williams calls this the ideal worker norm, and it’s still very present. Men are taking on more family responsibilities than they used to, but since women still disproportionately do that, this certainly leads to women being taken less seriously in the workplace, getting fewer promotions, because they’re not taken as serious workers. It’s not like somebody decreed … This would be like the bedtime is 9:00, the workweek is 40 hours. Right?
Nick Hanauer: 07:38 Right.
Julie Nelson: 07:38 It’s the same kind of statement.
Nick Hanauer: 07:39 Right.
Julie Nelson: 07:41 It’s not dictated in stone. The 40-hour workweek was based around mostly male workers and no household responsibilities. We can think differently. We don’t have to stay with that. The other thing about gender pay equity is the differences between what’s paid for sort of stereotypically male jobs and stereotypically female jobs. Jobs that involve what we think of as caring labor, things like nursing, teaching childcare tend to be mostly filled by women and are often paid less, and often, people feel like they should be paid less.
Julie Nelson: 08:15 For example, in economics there’s the argument that CEOs should be incentivized with stock options to do things on behalf of their shareholders. Right? You can’t get CEOs to act on behalf of their shareholders unless you pay them large amounts of money. But there’s a couple of articles that have been published in regular economics journals about how to get the best nurses, and these articles argue that to get the best nurses, you have to pay them low because that’s the way you make sure only altruists take the jobs.
Stephanie Ervin: 08:44 Right. It’s unbelievable. That is unbelievable.
Julie Nelson: 08:49 Unbelievable, right? Like nurses don’t have to eat, right? Right now, childcare workers in the US make about the same as parking lot attendants. Okay? The future of humanity is in the hands of people who are making as much for watching kids as they could for watching parked cars. So, that whole equity across occupations still remains to be addressed.
Stephanie Ervin: 09:09 Right.
Nick Hanauer: 09:09 Yeah. Another one of my favorites that you allude to here is that when it comes to rich people, they need massive incentives to do the right thing, the tax cuts and huge salaries and stock options, but poor people, low wage workers, need to be incentivized with pain, with fear.
Julie Nelson: 09:30 Pain, exactly.
Nick Hanauer: 09:31 Right?
Julie Nelson: 09:32 Right.
Nick Hanauer: 09:33 That low wages is the way to keep low wage workers hard at work, because you raise the rages, then won’t they slack off? Won’t they feel … They’ll get lazy and soft if we pay them more, and it’s just a fascinating double standard that sort of infects both our policy and our culture.
Julie Nelson: 09:55 Exactly, yeah. The carrots are for the rich, and the sticks are for the poor.
Nick Hanauer: 09:58 Right. Exactly.
Julie Nelson: 10:00 Yep.
Stephanie Ervin: 10:00 What do you think of some of the ideas that exist in other countries, like the legislation Iceland passed a couple years ago about transparency and pay, trying to make sure corporations are actually held accountable or have to get certified to represent that they’re paying men and women equally in the workplace? What do you think of approaches like that?
Julie Nelson: 10:22 Yeah. I mean, a lot of Europe, not just Iceland, but a lot of Europe, and particularly Scandinavia and Iceland, are way ahead in thinking about how to actually get to gender equity, how to break some of those habits of thought and create some new patterns for employers and for workers.
Stephanie Ervin: 10:47 Any specific ideas that are your favorites, or you think would bend the needle the furthest or the fastest?
Julie Nelson: 10:54 I think just reporting on wages is a good step. I mean, one of the problems has been issues of transparency. Oftentimes, women and minorities don’t even know they’re being underpaid because it’s all kept very hush-hush. So, transparency is one part of it. There are certainly some other policies at the business and government level in terms of the valuation of what used to be called comparable worth, got going in Australia, never got going so much here, and things like legislation for people with family responsibilities. That is leaves and job protection and these kinds of things. Not only Europe, Canada is way ahead, and a couple states. I mean, California now had paid family leave, but still, a lot of workers in the US don’t even have sick leave, much less family leave, much less paid family leave. That’s outrageous.
Nick Hanauer: 11:43 Yeah.
Stephanie Ervin: 11:44 So, where do you think we start on this? Obviously, we do a lot of work here at Civic Ventures around narrative shift and attacking the sort of root, to your point, of homo economicus and everything that’s wrong about what they say about the nature of people, but what else can we do? Should we start with regulation? Should we start with changing the narrative? Should we just expect and ask our corporations to be responsible on their own to voluntarily move? Should we start with really embrace these culture change things? Should we do it all at once?
Julie Nelson: 12:19 Well, my sense is that for a lot of big problems, I would put climate change up there with gender equity as well, it really has to be all hands on deck. That is, it’s not going to just be the government doing it. It’s not gonna be just the corporations doing it. It’s not gonna be just unions doing it, or just the media. No one part is going to be able to do it on their own, because we really are talking about shifts in the way people perceive the world that they’re in, perceive the whole economy, perceive gender relations. So, those are some pretty big shifts.
Julie Nelson: 12:57 In regard to the economy, though, you have to realize that, I think, a lot of … The rise of neoliberalism has happened over the last few decades. The US economy was not always like this. I take a lot of inspiration from the people in the progressive era, back when the robber barons were making big piles of money, and the workers were starting to see it was going on in Europe with organizing and communism and socialism, and the US kind of worked it out. It worked better for white men than women and minorities at the time, the deals they put through. Still, social security, workers’ comp, all of these things. I mean, it were a way to make the economic system work for everybody. Of course, some people didn’t like it because it was too much government. Some people didn’t like it because it was too little sharing. It was still capitalism, but it actually made a workable system. So, we gotta get that ground back, and further.
Nick Hanauer: 13:59 Yeah. Yep. Well, listen. This has been a fascinating conversation.
Stephanie Ervin: 14:03 So great.
Nick Hanauer: 14:03 Thank you so much for spending the time with us.
Julie Nelson: 14:06 Thank you.
Nick Hanauer: 14:07 Yeah.
Julie Nelson: 14:07 Thank you for having me. It was great talking with you.
Nick Hanauer: 14:08 Super fun. Okay.
Julie Nelson: 14:09 Thanks.
Nick Hanauer: 14:09 Bye.
Julie Nelson: 14:10 Bye.
Stephanie Ervin: 14:10 Bye.
Sarah Leibovitz: 14:15 So, you may think that this problem isn’t actually as prevalent or as bad as it sounds. I feel like I see a lot of people who are like, “I’ve never experienced pay inequity or seen other people who are. I don’t know any of these people. This is something that maybe happens to celebrities. It doesn’t happen in day-to-day life,” and I get that, but there’s a recent example that actually just happened here in our own backyard in Seattle that is really stunning everyone who thought that we were past this issue. Hi. My name is Sarah Leibovitz. I’m a producer here on Pitchfork Economics, and I got the chance to sit down with a person who experienced that pay inequity. Her name is Emily Schwing, and she’s a reporter, and it all started when she was hired by the Northwest News Network a couple of years ago.
Emily Schwing: 15:08 My name is Emily Schwing, and I’m a public radio reporter and producer. I’m currently on assignment in Alaska. So, let’s see. What happened to me? Well, I got this job in 2016, and I was really excited about it, and then I think it was like a year or so … I waited about a year to ask for a raise because I felt like that was kind of standard procedure, like you do your job for a year and then ask for more money. So, I asked for the median income for a Washington state resident, which at the time was $57,000 and change. I just thought it was a really fair ask because they had asked me to move to Washington state, and I figured, if you want me to live in Washington state and work for you, then you can pay me what the average Washington state resident makes.
Emily Schwing: 15:58 But our board members said no, which kind of surprised me because I didn’t feel like I was asking for too much. I felt like I was being really fair and not greedy. So, that’s when I went on a state website, and I found out what my colleagues were making, and it turns out that my male colleagues were making closer to $30,000 more, so tens of thousands of dollars more. It was somewhere in the high 20s than me or my other female colleagues. So, that’s when I was like, okay, I’m gonna make a real ask, and so I asked for $20,000 more, and that would’ve still put me under what the men were making, but I felt like it would put me a lot closer in terms of the pay gap to what I felt like I was worth.
Emily Schwing: 16:52 I never even got a response on that second request, as far as I know. It was just crickets. So, then I just kept asking, and nobody would really say anything, but then it was recommended to me that I get a job offer from somewhere else, so I did, and that was for $12,000 more than I was making, so I took that to the people who make decisions on what I’m gonna make, and I said, “Hey, I have a job offer. Here’s my letter. Here’s what they want to pay me,” and they told me, “No. We can’t raise your salary that much,” and I said, “Okay. Well, what can you raise my salary to?” They said, “We can give you $4,000.”
Emily Schwing: 17:35 This was the following year. So, we’re now into January of 2018. I said, “Okay. Well, I will take the $4,000 and stick around for one year with the understanding and the agreement that you guys will address this pay gap and do something about it,” because it had been going on for much longer than I was with the network, more than a decade, really. So, then January of 2019, this year rolled around, and I went down to Pullman, Washington and talked with my managers, and I said, “Hey, you know why I’m here. I would like a raise, and I would like to make what my male colleagues are making,” and they were like, “Well, what are your male colleagues making?” I said, “In the upper 70s.”
Emily Schwing: 18:21 I was in the room with two men, and one of the men just kind of winced like I had thrown a snowball at him or something. He was like, “Ooh. We can’t do that,” and I was like, “Well, if you can do it for him, you could do it for me.” They were just like, “No, we’re not gonna be able to get you a raise,” and I said, “You’re not gonna be able to get me a raise at all?” They said, “No, but you know what you should do? You should get a job offer,” and I was like, “But I already did that.”
Emily Schwing: 18:50 So, for me, it just got to the point where it was like, okay, you guys aren’t really gonna do anything about this. We’ve all acknowledged that there’s a problem. We’ve had this conversation a million times. I’ve talked to every single one of our board members. Me and my female colleague went around to all of our board members last year and had conversations with them, and I just felt like this was not new information, but there was just a lot of, “Oh, yeah. We should address that. Oh, yeah. We’ll see what we can do,” and then it just … That can just kept getting kicked down the road. So, that’s kind of what happened.
Sarah Leibovitz: 19:25 How much were you making?
Emily Schwing: 19:26 When I first started, the state website says I was making $51,400, and let’s be honest. That’s not a lot of money. So, a lot of what I was doing to sort of supplement that income was freelancing, and I just felt like, why do I have to spin my wheels so hard and get all these side gigs to make the same amount of money that my male colleagues are making, and they just have to do one job? But the other reason that I decided that I wanted to make this sort of official on my own terms was the announcement about my leaving the network went out, and it said something along the lines of, “Emily Schwing has done great work,” and then it listed out all of these stories that I’ve reported recently, “and now she’s going to Alaska to be with her husband,” which is fantastic.
Emily Schwing: 20:17 I love my husband, and I like Alaska, but that’s not why I quit my job. So, I’m not really the housewife type, and it just bothered me that we could sort of distill all of this down so easily into, oh, she’s just going to spend more time with family, when really that wasn’t the issue at all. The issue is, no, I make more than $20,000, almost $30,000 less than my colleagues, and I’ve been trying to fix that problem for three years, and it feels like it just falls on deaf ears, and it’s like, 60 years after issues of pay equity were argued in the Supreme Court, it’s 2019. Let’s get it together now, guys, and girls. That’s really why I felt like I wanted to make it public.
Sarah Leibovitz: 21:10 Did your male colleagues, the ones who are making so much more money, did they have anything to say about it?
Emily Schwing: 21:16 No. They’ve been asked or told … I don’t know if it was kindly asked or definitely told, that they are not allowed to comment publicly, all of my colleagues, actually, and honestly, I haven’t heard from any of them, and I haven’t heard from any of our board members. I’ve not heard from anybody in a leadership position at the Northwest News Network, and I do find that curious, that they would ask reporters to stay silent. That bothers me, too. That’s not really what we do for a living, so …
Sarah Leibovitz: 21:53 Aside from just paying people more, which makes sense, do you think that there’s a solution to these pay gaps at NPR or in general? Is there a way in which they could close these pay gaps while still keeping their board members happy?
Emily Schwing: 22:09 Yeah. I mean, just close the pay gap. It’s really not that hard. I do not think it would be that hard for our board members to sit down and say, “Look. All of our member stations pay dues into this one system, and we use stories and get work from all of these reporters. So, whether you’re based in Spokane or Tri-Cities or Olympia, all of our reporters make the rounds across the Northwest and do the exact same jobs, and we air their stories everywhere. So, why not create a pool of money that we pay them out that’s equal?” That to me doesn’t seem like it’s such a hard thing.
Emily Schwing: 22:46 I mean, I think that the red tape and administrative work of that is a real pain, but if really, that’s the only thing that’s holding up closing this pay gap, then it’s unfortunate that this it the way that it has played out. I mean, I really just think it’s a lot of tough conversations at the end of the day about let’s sit down and really look at what we’re paying men versus women for the same work, and if it turns out that there are tens of thousands of dollars in difference, then in my opinion, I feel like there’s a legal obligation to address that and close that gap.
Nick Hanauer: 23:33 Now we’re gonna talk to this really wonderful journalist, Claire Cain Miller, who works for The New York Times. She’s an expert in the issues of women in the workplace and wage gap, and so and so forth. She’s done some really great writing and really interesting research on these subjects.
Claire C. M.: 23:54 This is Claire.
Stephanie Ervin: 23:55 Hi, Claire. It’s Stephanie and Nick. How are you?
Claire C. M.: 23:58 Hey. How are you? Good.
Stephanie Ervin: 23:59 I’m just delighted, beyond tickled to talk to you. I’ve been reading all of your work, so it’s super fun to be able to talk to you today.
Claire C. M.: 24:06 Oh, thank you. That’s really nice. I’m glad to be here. I’ve been at The Times for a decade. I was writing about technology for the business section before, which is actually where I first met Nick ages ago. I’m not sure if you remember.
Nick Hanauer: 24:22 A million years ago. That’s right.
Claire C. M.: 24:23 Yes. I covered venture capital. It was my first beat at the paper, and-
Nick Hanauer: 24:28 This is so much better, by the way. Don’t you think?
Claire C. M.: 24:30 I have to admit I agree. I always wanted to write about gender, and it’s sort of funny. I used to pitch gender stories all the time, and editors would say, “Well, I’m not sure that’s a whole beat. Maybe just do a story on gender and technology,” and so I would do a gender and tech story every so often, and then finally it became clear that gender was not only enough for a beat, but now we have several people at the paper covering [inaudible 00:24:58] beat, and it’s hugely important. When David Leonhardt started The Upshot, which is based on economics and policy, we thought that looking at gender through that lens was a perfect fit.
Nick Hanauer: 25:10 That’s awesome.
Stephanie Ervin: 25:10 Very cool. So, can you sort of help set up the argument for us? Just tell us where we’re at in terms of the data of pay equity, where we maybe were before women sort of started participating in the workforce, and where we are today?
Claire C. M.: 25:28 Sure. Well, overall, women make about 80 cents for every dollar that men make, but that’s just sort of median pay for men and women. That’s not comparing people who do the same jobs or the number of hours they work. Within occupations, the pay gap varies. At the bottom, at minimum wage jobs, there’s very little pay gap because people are making the same wage. The largest pay gaps are in professional jobs, like in medicine and law and business, and that pay gap is really substantial because those are very high paying jobs. So, that means that the women who do those jobs are really missing out on a lot. The pay gap has closed over the years as a lot of factors have sort of disappeared. Women graduate from college in greater numbers than men now. Women have moved into a lot of these high paying occupations that they didn’t use to be in at all. So, a lot of those factors have gone away.
Claire C. M.: 26:26 A huge proportion of the remaining pay gap is basically because of babies. Women who don’t have children continue to make almost as much as men throughout their careers, but it’s when women have children that the pay gap really opens, and usually never closes again for the rest of their careers. So, college-educated women in the United States make about the same as men, slightly less. There are factors like discrimination at play, slightly less, but about the same as men until about the age of 33. By the age of 45, they make 55% what college-educated men make. What happens between 33 and 45 is basically they’re raising young children.
Stephanie Ervin: 27:09 Right.
Nick Hanauer: 27:10 Interesting.
Stephanie Ervin: 27:11 So, you wrote this amazing piece that I just laughed out loud about, though I could’ve just as easily cried, which is the analysis you and a couple other folks did on sort of the top jobs in our economy, but also the top jobs in our government, and that there are more men named John or George than there are women in some of those roles. Can you talk about that analysis and how you got to that sort of interesting lens?
Claire C. M.: 27:36 Yeah. So, we looked at sort of influential jobs this is in, senators, Congress people, governors, but then we tried to look at other areas, to CEOs and MacArthur Genius winners, and the directors of the top grossing films of the last year, and sort of across industries, and we counted how many women it took to equal the number of men with the most common names. We just thought it was a fun way to illustrate the imbalance of people in power. The only places where there was any sort of sense of equality were MacArthur Genius winners, which is a very diverse group to begin with, and the editors of women’s magazines, which were majority women, but again, that’s not really surprising.
Nick Hanauer: 28:27 Interesting. Claire, have you done an analysis of these trends across the developed world, other countries? Is the US worse, better? Do you know?
Claire C. M.: 28:40 So, what I’ve been able to look at for the pay gap is sort of the other rich countries, basically European countries, and it’s interesting. European countries have a lot better family policies than we do. So, when you have a baby there, you get paid leave, which we do not get in this country, and there’s subsidized childcare in most countries, and men take paternity leave, and there’s all these things that we sort of wish that we had in this country to make it easier to have children and work. What we know is that in Europe the result is that more women work. However, women are less likely to get to management positions than they are in the United States. They’re more likely there to get stuck in sort of part-time jobs and low paying jobs and not move up.
Claire C. M.: 29:28 Another thing we know is from this data in Scandinavia, that just shocked me, is the pay gap I was just describing that opens up when women have children and never closes again is the same in Scandinavia as it is in the United States, and so that made me think, well, what is going on? They have all the policies that everyone says we need to have to achieve gender equality. Why is there still this inequality? What is seems to be is their policies might be almost too generous. They’re almost discouraging women from working. So, here we get zero days off paid by the government. Maybe your workplace will offer you some, but you get zero days off paid when you have a baby, and everyone agrees that that is not very helpful.
Claire C. M.: 30:12 In a lot of these European countries, you get a year off, and so if you have two or three kids, like many people do, you’re taking two or three entire years off during your prime career building years, and that’s not that helpful either in terms of achieving equality in economic terms. What it really all comes down to, to me, is men have children, too. So, the problem here is that women are the ones who are getting a full year off, and the ones who are moving into part-time jobs, and women are the ones who are giving up these things. Yes, for the sake of the family. For sure, it benefits the family, but if men did half as much when they had children, if the way that they changed their behavior looked more like women, then these problems would sort of disappear.
Stephanie Ervin: 30:59 Right. I read something, and I don’t know if this was in one of your pieces or not, about how in the US the women’s sort of participation rates seem to be stagnated, where obviously we went from very few women participating in the economy to more and more and on the increase every year, to in the last 10 years our participation rates have been stagnated. Do you have an idea of why that would be?
Claire C. M.: 31:26 So, it’s one of the biggest mysteries for economists, is why this … Women sort of poured into the workforce starting in the ’70s, and it kept increasing and increasing, and it looked like it would never stop, and then in the ’90s it stopped, and one of the big reasons, which economic analysis has pointed this, it’s very clear when you look at other countries, as Nick mentioned, is that they have these policies that we don’t have. So, the countries that have better family policy like paid leave and flexible schedules and subsidized childcare, many, many more women work there. Like I said, they don’t get to as high positions, but many more women do work. Their rates continued to increase while ours stalled. So, that’s a big reason.
Claire C. M.: 32:12 Another reason that economist have just sort of been starting to figure out ways to quantify in the last year is that being a parent, the actual job of being a parent has changed. So, mothers spend … This is the most amazing fact to me. Stay-at-home mothers in the 1970s spent as much time interacting with their children as full-time working mothers do now. So, motherhood, parenthood, but especially motherhood, has become something where you’re expected to be sort of hands-on, down on the floor with your child, doing a puzzle, teaching them all the time, where before, it was something where your children were probably there. They were playing in the backyard, or maybe they were down the street, or maybe they were doing-
Stephanie Ervin: 32:59 Right, but you could have a cocktail.
Claire C. M.: 33:00 Yeah. They worked on a puzzle by themselves, and you were making dinner or talking with your friends or playing tennis, whatever it was you were doing. This has really caught women off guard. So, women say they plan to do both. In surveys, a vast, vast majority, more than 90% of young women say they plan to have jobs and be mothers in America, and not as many as that end up doing both. It seems from some really interesting data, I think, that sort of the cost of motherhood is catching women off guard, and it’s because motherhood actually takes more time and more effort than it used to.
Nick Hanauer: 33:38 Yeah, and this is, I think, inextricably intertwined with our increasingly winner-take-all economic system. In the old days, the stakes of not making it into an elite Ivy League school were relatively low. Right?
Claire C. M.: 33:57 Exactly.
Nick Hanauer: 33:57 Today, in a winner-take-all economy where you’re either rich or poor, the risks of not over-parenting are very, very high. People are in this sort of arms race panic to give their kids the most tutoring, the most coaching, the most exposure. It’s just absolutely crazy what people do now in terms of parenting, and of course, if you’re the primary caregiver, that can suck 24 hours a day of time.
Claire C. M.: 34:34 Right. Yeah, yeah. It’s this constant teaching, and you’re exactly right. I mean, now you are just as likely to not make as much as your parents make as you are to make as much or more, and that’s one definition of the American Dream, and basically, it’s now a crapshoot. You’re as likely as not, and I think even if parents can’t consciously say, “I’m enrolling my six-month-old in music class because I want them to get into a good college because a college degree has become so much more essential to making a middle class wage,” even if they’re not saying that, that is what’s driving it. It’s this anxiety of falling out of the class you were born into, and not making it to college and not having a chance at this good job.
Claire C. M.: 35:19 We also know that kids who are raised in a gender-equal household where they see their parents having similar roles are more likely to go off and recreate that adult life for themselves. So, what we’re doing is almost baking in gender inequality for another generation because their parents are trying to help them out in terms of economic inequality. I would say there’s another piece of this, too, which is that hours at jobs have become much, much longer. There’s this expectation of 24/7 availability. We all know that, with our iPhones and everything, and the returns to working long hours have grown so much.
Claire C. M.: 36:00 So, if you can work 80 hours a week as an investment banker, you are going to make more than double the amount as if you took your MBA and worked 40 hours a week somewhere. So, there’s this pressure to work these really long hours at the same time as there’s this pressure to sort of spend as much time as you can with your kids, teaching them and being on the floor playing with them, and those two things together make it very impossible, especially for educated women, to go out into the labor market and use their degrees.
Nick Hanauer: 36:32 Right.
Stephanie Ervin: 36:33 Right.
Claire C. M.: 36:34 Yeah. Yeah, and this is, I think, so different from sort of that opt-out idea that people talked about about 10 years ago, which was largely debunked, which was this idea that women earned these degrees and then wanted to be stay-at-home moms. We’re not talking about choosing to become a stay-at-home mom because your family can afford that, and that is what you want to do. Certainly, there are women who fall into that category, of course, but we’re talking about people who simply cannot find a way to continue doing their full-time job, especially a long-hour or a full-time job and parent with the demands that parenting plus the demands of full-time jobs now, which are so much more than full-time.
Claire C. M.: 37:15 I think there’s not … It’s hard to point to a developed country that has figured this out, how to have two-income families with children, and to make it work, but the vast majority of people have children by the end of their child-bearing years in the United States. It’s like 86%. So, clearly it’s an issue that most people deal with, and I think if you look to places like Scandinavia, like I said, in some cases, it can backfire a little bit for gender equality in the labor market, but the idea of recognizing that people have these responsibilities at home and policies that give them time to be with their children when they’re super young and need it seems to make a lot of sense.
Nick Hanauer: 37:57 So, Claire, if you were queen and could just impose your will on us, what would you do?
Claire C. M.: 38:07 I’m a journalist. I’m not supposed to make policy prescriptions. I will say that some of the most interesting research, to me, has found what happens when you give people control over when and where their work gets done, and when they have that kind of flexibility, the pay gap between men and women really, really shrinks, and what I think is most interesting is that a lot of professions you say, “You can’t give control over when and where work gets done, because they require this facetime, and they require you to be at their desk, and there’s clients who need you to be able to pick up whenever they call,” but Claudia Goldin at Harvard, who’s an economist there, has done some great research on this and shown that even in jobs where it looks like those jobs were too important to have that kind of flexibility, some of those jobs have changed, and as a result, many more women are in them, and the pay gap is closed.
Claire C. M.: 39:05 One example is obstetrics. So, OB-GYNs used to be on call 24/7 because you had no idea when your patient was going to go into labor, and when they were in labor, a doctor needed to meet them at the hospital to deliver the baby. That was the kind of job that people thought that could never be a flexible job, and then a ton of women entered obstetrics and changed it. So, now obstetricians generally work eight-hour shifts at the hospital, and they deliver the babies that are born during their eight-hour shift, and then they go home, and someone else comes and delivers the babies that are born during the next shift. Similar things have happened in pharmacy and some other jobs.
Nick Hanauer: 39:44 It’s about a thousand times more sensible, by the way.
Claire C. M.: 39:46 Right, and it was one of those jobs where people said, “This could never happen.” So, what I wonder is what other jobs do we think this could never happen, but it can? Do consultants at McKinsey really need to be on call 24/7 to answer client questions, or could that job also change in a way that provides more flexibility? Also, people who work at Starbucks, at the other side of the spectrum who are paid by the hour, is there a better way to schedule them so that they have more control over when and where their work gets done? Because we know that what people do is when some of these huge gaps start to close.
Nick Hanauer: 40:28 Yeah, it’s interesting.
Stephanie Ervin: 40:29 I love that idea.
Nick Hanauer: 40:30 Yeah.
Stephanie Ervin: 40:30 Cool.
Nick Hanauer: 40:31 Okay, Claire, thank you so much. It was so great to chat.
Stephanie Ervin: 40:35 Thank you.
Nick Hanauer: 40:35 Thank you for your work.
Claire C. M.: 40:36 Thanks. It was good to be here.
Nick Hanauer: 40:36 Okay. Take care.
Claire C. M.: 40:37 Talk to you guys later.
Nick Hanauer: 40:38 Bye.
Claire C. M.: 40:39 Bye.
Nick Hanauer: 40:43 As you know, I’ve had this sense for a really long time after having thought about this stuff for a really long time, that neoliberalism is just … It’s a modality of oppression, but these narrative tricks and psychological tricks, they’re super effective, which is why they’re used again, and again, and again, and again, and-
Stephanie Ervin: 41:05 But they don’t just take the same form in terms of oppression. For me, what I was reflecting on is they take the same form in the solutions being offered, too. So, women were being taught how to be better negotiators, and to do things like power pose, and to take on mentors, and all of that is just treated like there aren’t these sort of systemic inequities, like it’s my personal responsibility to make my situation equal to that of my male counterpart, and that’s not fucking true. That’s just not … Now power pose will make equality for women in economics possible-
Nick Hanauer: 41:49 Yes. Right. All the burden is … Yeah.
Stephanie Ervin: 41:51 … and it’s embarrassing bad as an argument and as a solution, and I feel the same way about Lilly Ledbetter.
Nick Hanauer: 41:57 Yeah, leaning in.
Stephanie Ervin: 41:57 Yeah, leaning in. Exactly.
Nick Hanauer: 41:59 What’s her name?
Stephanie Ervin: 41:59 Sheryl Sandberg, yeah.
Nick Hanauer: 42:00 Yeah. If you just lean in, it will all be good.
Stephanie Ervin: 42:02 Right. I hate that shit.
Nick Hanauer: 42:03 Yeah, especially if you went to Harvard.
Stephanie Ervin: 42:06 Right. Right. So, the solutions are all these individual solutions that women themselves should take on to gain their rightful place in equal participation, and those solutions are just not gonna get us there.
Nick Hanauer: 42:19 Yes.
Stephanie Ervin: 42:19 I feel the same way about democrats who tout Lilly Ledbetter. I mean, Lilly Ledbetter is necessary policy that extends the litigation opportunity for women who are not receiving the same wages of their male counterparts in the workforce, but it is so fucking inadequate as a solution to receiving 80% of the wealth that men are earning and getting. I just hate it.
Nick Hanauer: 42:46 Yes.
Stephanie Ervin: 42:51 So, I think what heard from Professor Julie Nelson, and certainly from writer Claire Cain Miller, is that there are lots of policy things that we can do. Wage transparency is part of that, stronger childcare laws, for sure, but we can also do things like raising the minimum wage. Women represent 56% of minimum wage workers. We can adjust the overtime threshold. Women are the one overwhelmingly who occupy those salary level jobs that today aren’t covered by our current overtime threshold, and overtime would also do important things for that family dynamic that Claire especially talked about, giving men and women the opportunity to choose what they do with their free time when you can expect a 40-hour workweek. So, those are the things we can do to more fully include women in the economy, but why should we take those steps, Nick?
Nick Hanauer: 43:37 Yeah. So, I think the answer to that question is super simple, that in an economic circumstance where so much wealth is concentrated at the top and in the profits of big corporations, and there has been so much wage stagnation up and down the economy, anything we do to pay ordinary folks more, men or women, the better it will be for the economy. I see no downside to moving super aggressively to make sure that women are treated fairly and equally in the economy. Paying women more will unambiguously not just improve their lives, but improve the dynamism in the economy as a whole. It won’t just allow them to consume more, but also to invest more in themselves and in their families. Again, one of our fundamental economic principles is that inclusion creates growth, that the more fully we include people robustly in the economy, the better the economy will do overall. So, I just think that it’s not just that we should do it for moral reasons. It just seems to me obvious that there are overwhelming practical reasons to address these problems. So, yeah, do more.
Nick Hanauer: 45:10 So, in the next episode, we’re gonna talk to our friend, Heather McGhee, about whether morality and economics have anything to do with one another.
Goldie: 45:25 So, Nick, podcast listener [Trevin 00:45:28] Barker from San Francisco sent us an email with a question. Could you please invest some time talking about gentrification, urban displacement, and the concentration of wealth and commerce in our big cities? What’s the real cause of all these businesses clustering together as they do? This can’t be good for our economy, can it? With companies like Uber, Lyft, Slack, Airbnb, et cetera about to go public here, the situation seems like it will only grow more untenable over time. I know it’s not only happening here, but I think it’s probably a prime example of the phenomena. What can we do about it? As best as I can tell, this is becoming a major cause of rising inequality in urban areas.
Nick Hanauer: 46:16 Yeah, and Trevin, thanks for the question. It’s a fantastic one, and it’s really worth addressing. We should probably do a whole episode about this, me and you.
Goldie: 46:26 In fact, coming up, we’re doing an episode on spatial inequality.
Nick Hanauer: 46:31 On spatial inequality.
Goldie: 46:31 So, stay tuned, Trevin, in a couple weeks.
Nick Hanauer: 46:33 Yeah, but briefly, the underlying dynamics of urbanization and concentrating wealth and power in cities, and by the way, this is a thing that is happening in every country in the world at different rates of speed, and definitely, if you live in San Francisco, California you are ground zero for this phenomena, is that once you understand the prosperity in human society as being the accumulation of solutions to human problems, and those problems in turn, those solutions, rather, in turn being the product of increasing amounts of innovation, and once you understand where innovation comes from in a modern way as not as this eureka moment of an individual, but rather, the collective product of huge amounts of diversity and density working together, then you can quite clearly see why cities are where everything happens.
Nick Hanauer: 47:32 In fact, this phenomena is quantified and well documented, and you can read Geoff West’s book, Scale, if you really want to understand the dynamics of this super well, but basically, every time you double the population of a place, the amount of innovation that takes place in that place goes up by a factor of 1.15 times, and what that means is that big places aren’t different in degree. They’re different in kind, really, from very, very small places, because, just to be clear, it’s not the amount of innovation in the place that goes up 1.15 times. It goes up 1.15 times per person who lives in that place. So, the amount of innovation that takes place in a big city is two or three times as much per person as a small place.
Nick Hanauer: 48:21 So, what that means is that if you’re competing in innovation in economy, in a technological economy, the only place where you could realistically do that innovation is in highly diverse, highly dense places like cities, and the more adjacent technologies there are in a place, the easier it is to do that innovation. The costs to innovate go down dramatically because you have people who have adjacent skills, and so there is this increasing returns effect, which is happening throughout our economy, which is sucking all of both the best people and the best ideas out of the country and into the cities, and this is creating increasing amounts of inequality, and in particular, spatial inequality, which is exacerbating the political problems that we already had.
Goldie: 49:08 So, I think the shorter answer to your question, Trevin, is no, there’s nothing we can do about this because this is the natural glomeration effect of the knowledge economy, and yes, there’s huge inequality being created by this, but that is actually something we can do something about.
Nick Hanauer: 49:29 Correct, and we should, in fact, certainly in the United States in particular, have a really forceful policy for both trying to limit the amount of concentration that we have in industries to spread companies around geographically, but also, we should affirmatively try, even if it doesn’t make that much sense economically in the most primitive way, to build out capabilities in nonurban areas. We should build hospitals. We should build universities. We should do all sorts of things to spread prosperity around.
Goldie: 50:04 You can’t see this. I’m scrunching up my face.
Nick Hanauer: 50:06 Yeah. [Goldie 00:50:07] thinks that we should let the nonurban areas just go to rot, but I disagree.
Goldie: 50:13 No, no, no.
Nick Hanauer: 50:15 No. We have to find a way to include everybody in the economy.
Goldie: 50:19 I think the way to include everybody is, one, we need housing policy that allows people to move to the cities to take advantage-
Nick Hanauer: 50:27 Oh, for sure.
Goldie: 50:27 … of the opportunities that are here, and we need to recycle the wealth that’s created in the cities throughout the rest of the economy so that people can have a dignified middle class life in rural America, too.
Nick Hanauer: 50:43 Right. For sure.
Stephanie Ervin: 50:53 Pitchfork Economics is produced by Civic Ventures. The magic happens in Seattle in partnership with Larj Media. That’s L-A-R-J media, and The Young Turks Network. Find us on Twitter and Facebook at Civic Action, and follow our writing on Medium at Civic Skunk Works, and you should also follow Nick Hanauer on Twitter, @NickHanauer. As always, a big thank you to our guests, and thank you to our team at Civic Ventures, Nick Hanauer, Zach Silk, Jasmin Weaver, Jessyn Farrell, Stephanie Ervin, David Goldstein, Paul Constant, Nick Cassella, and Annie Fadely. Thanks for listening.