685: Fair Shake: Women and the Fight to Build a Just Economy (Strategy Skills classics)

The Strategy Skills Podcast: Strategy | Leadership | Critical Thinking | Problem-Solving

In this episode, authors Naomi Cahn, June Carbo, and Nancy Levit discuss their book 'Fair Shake,' which examines the systemic roots of gende

Key takeaways

• The gender wage gap for college graduates is actually increasing, contrary to the perception of steady progress.
• The 'triple bind' describes how women are penalized whether they compete aggressively or opt out of competition entirely.
• A 'winner-take-all' economy has seen CEO-to-worker pay ratios skyrocket from 20:1 in the mid-20th century to 399:1 today.
• Corporate cultures that reward short-term metrics often experience higher rates of burnout, turnover, and sexual harassment.
• The decline of institutional stability is linked to 'extraction' models where companies exist primarily to enrich top leaders at the expense of employees.

Main topics

• Winner-take-all economy
• The triple bind for women
• Gender wage gap trends

Notable quotes

Women are the canaries in the coal mine.

Conclusion

The episode serves as a critical call to action for leaders to move aw

Transcript preview

Speaker 1 (0:02) And when there is no vision, the Speaker 2 (0:04) people perish. Speaker 4 (0:05) We choose to go to Speaker 2 (0:07) the moon. If today were the last day of my life, would I want to do what I am about to do today? Change will not come if we wait for some other person or if we wait for some other time. We are the ones we've been waiting for. Welcome to the Strategy Skills Podcast, where strategy partners teach you the tools and techniques to solve mankind's greatest problems. Speaker 1 (0:45) Hello, this is Krista Parova. Welcome to another episode of the Strategy Skills Podcast. Our podcast sponsor today is strategytraining.com. If you want to strengthen your strategy skills, you can get the overall approach used in well-managed strategy studies. It is a free download. Go to firmsconsulting.com forward slash overall approach. And if you are currently updating your resume, if you're looking for another position, you will benefit from downloading McKinsey and BCG winning resume. Also, free download. Go to firmsconsulting.com forward slash resume PDF. And today we have a very special episode. We have not one, but three guests, three authors of a book, Fair Shake. We have with us Naomi Khan, who is a distinguished professor of law at the University of Virginia School of Law. We also have June Carbon, who is the rabbinic chair of law, science and technology at the University of Minnesota Law School. And we have Nancy Levitt. who is Associate Dean for Faculty and holds a Curator's Professorship at the University of Missouri, Kansas City School of Law. So I'm looking forward to this. Welcome, everyone. Thank you. We're delighted to be here. Speaker 4 (1:57) Yes. Speaker 1 (1:58) So let's start from how did you even decide to write this book? Because you're all located in different parts of the country. How did you get together and decided we need to address this very important topic? And I guess let's also establish what the topic is for the context. Speaker 3 (2:15) We've been working together for many years. June and Naomi have written several books together, Red Families versus Blue Families and Marriage Markets. And the three of us have written law review articles together. So we talk quite a bit about the areas in which we teach, which are family law, employment discrimination law. gender theory. And in several of those discussions, we began to discuss the gender-based wage gap. And we were shocked to realize that in an era of supposed gender equality, women were losing ground in the workplace. And when we started our research more than six years ago, The overall figure showed that women were gaining, although slowly, on men, and the wage gap was narrowing. While this seemed like promising news, after the mid-1990s, the only reason women appeared to be gaining ground on men was almost entirely due to the fact that wages for blue-collar men were falling dramatically during that period. Then when we looked at the numbers for college graduates, we found that the gender gap in wages was increasing. And in 2019, a Goldman Sachs study showed that if present trends continued, women wouldn't catch up with men in terms of wages for another hundred years or so. We also noted that the advancement of women college graduates stalled just as CEO salaries skyrocketed. And we discovered the two phenomena are linked. And what we call the winner-take-all era, which June or Naomi can pick up and run with, the winner-take-all era starts with the increases in CEO compensation, 1950s, 1960s. The ratio of CEO to average worker pay was about 20 to 1. Today, it's a mind-blowing 399 to 1. Speaker 1 (4:27) And then I also was taken aback when I was reading the book. So you mentioned the study called Nansak Study, which makes sense. But then you wrote that in writing this book, you discovered that if current trends continue, women will never catch up. And in fact, the gender wage gap increased. between 2019 and 2022. Speaker 5 (4:47) Yes. So I'm just going to pick up on Nancy's comment on the winner-take-all economy. So there were two things that we had started with before we wrote the book. One was Naomi and I did a book called Marriage Markets, How Inequality is Remaking the American Family. One of the things we discovered is the only group in American society whose marriage rates have increased, are the top 10 % of women by income. And when we looked at why the ratio, take people under the age of 35, the ratio of men who make more than $100,000 a year to women, it's like two to one. For Blacks and Latinos, that's not true. But for whites and Asians, it is, and that's increased. And so we started to wonder what's going on and found out. this winner-take-all idea. When you look, we found out in addition to what Nancy mentioned, which is that CEO salaries skyrocketed, 57 % of all increases in income between the mid-80s and the financial crisis went to finance. When you look at tech, What we found is, oh, men and women's increase in computer science rose and fell together until the mid-80s. When you look at the boom in the 90s, it was almost impossible to get into computer science at Berkeley. And the men started to edge out the women. And we saw a pattern, boom-bust cycle. Men flooded in during the booms. And women disproportionately left during the downturns. But what you had was a very different economy. And so this summarized really what our book is trying to do is to link the fate of women, why women are losing ground, to the creation of an economy that creates only a relative few at the top. And we call that winner-take-all in this sense. When you look at companies, Nancy and I wrote a piece called Death of the Firm. What did we mean by that? We meant what's the importance of a company? And I like to explain it by looking at the difference between Mitt Romney and George Romney. George Romney was the dad. He was governor of Michigan. He ran for president, touting his success as a businessman. Mitt Romney, the son, governor of Massachusetts. ran for president touting his success as a businessman in 2012. For George Romney, success meant the health of American motors, the bragging rights in that era where my company is bigger than your company, my company is sounder than your company, my company is Bell Labs, it's more innovative than your company. For Mitt Romney in 2012, the bragging rights were I have $200 million in the Cayman Islands. With the Wall Street Journal editorial pages saying, and if you were really a good businessman, you'd have more than $200 million in the Cayman Islands. The point, what we describe as winner-take-all is a new system, a system that allocates, that takes institutions and says, who cares about the institution? The only reason Bain Capital exists is as an extraction device to make money for its owners. If it doesn't exist in 10 years, I don't think anyone, including Mitt Romney, would care. And so institutions become tools to extract money for the people who call the shots and everybody else is left worse off. That's what we mean by winner take all. And we think women are the canaries in the coal mine when they don't do well in a company. Something wrong has happened. Speaker 4 (8:56) Just to add to that, it's not just, as June said, it's when women. are not doing well, that there's something wrong. But it's, of course, not just women. If there's something wrong, it affects everybody in the company. And so this idea that women are the canaries in the coal mine. If there is gas in the coal mine, it affects everybody. And the point is to get out as quickly as you can because it affects everybody there. And then to go back to the question that you were asking about the gender wage gap, one of the things, just to echo Nancy, that we found was that women at the top, women with... college degrees or advanced degrees were farther behind in this new economy. The gender wage gap, women are paid less than men at every education level, but that gender gap increases at the higher education levels. And so just in our own profession, just in the law, The impact of the winner-take-all economy has been that in 2005, 8 % of the highest paid earners at law firms were women. Instead of increasing, today it's gone down, so it's only 2 % of the top earners at law firms are women. And in this era of increasing gender equality, allegedly, That's what we think the winner-take-all economy explains, why this is happening. Speaker 5 (10:39) And I would add to that, the reason women will never catch up is women have been gaining because of the loss in wages in blue-collar men. In relative terms, blue-collar white men have been the biggest losers in this economy. But those losses have pretty much come to an end. They're not a whole lot. This is the decline in high-paid manufacturing jobs and the switch and the demise of unionization in the private sector. And those gains are pretty much at an end. The entire bottom of the economy, male and female, is being squeezed. You're not going to see changes in the gender gap in wages, which is relatively small in the bottom half of the economy. It's the top half of the economy, which is growing. and at current rates will increase the gender gap, not diminish it. Speaker 1 (11:32) At this point, I think it is very important for us to address why male leaders listening right now should really pay attention to this and should see it as something that they need to have on their agenda in terms of how do we do things differently. Speaker 4 (11:48) One way to respond to that is to say that in 2020, The Stock Exchange Nasdaq reported findings that having more women on boards correlates with less securities fraud, fewer accounting errors requiring correction, and greater general transparency. So the health of a company is... Speaker 4 (12:19) correlated with having more women on boards. And there's another study that banks that have more women on their boards commit less fraud. So if you care about a workplace in which there is less fraud and more transparency, as well as other studies have shown that having more women on boards or having more women in leadership means better bottom lines. I mean, it's win-win all the