Young, Single Women Earn More Than Their Male Peers

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single womanAccording to a new report from the research firm Reach Advisors, U.S. women who are single, childless, between the ages of 22 and 30, and live in large cities earn on average 8% more than their male counterparts. In Atlanta and Memphis, the differential is as high as 20% and in New York and San Francisco it is 17% and 11% respectively.

Researchers culled Census Bureau information from over 2,000 towns and cities and concluded that many factors may be influencing this trend including the fact that more women than men now graduate from college, which can influence their earning power.

In addition, many urban communities have seen a decrease in manufacturing and construction jobs historically held by men and an increase in knowledge-based jobs that are sought out by well-educated woman.

But this phenomenon (called the reverse gender gap) does not appear to hold true for 22 to 30 year old married women with children living in smaller cities.One theory is that marriage itself is not influencing the differences in pay but that highly educated women may marry and have children later.

Despite these promising gains for some women, according to census data, on average women with a bachelor's degree still earn close to $20,000 less than men at the same educational level. It's possible that the financial gains the women in the study are experiencing now will help accelerate their future earnings and help keep them more on par with their male counterparts, but research suggests that men and women negotiate for compensation differently and these differences could impact future earning potential as well. For example:

Relationships vs. Outcomes

Research suggests that many women may associate salary negotiation with conflict. In a 2002 study by Babcock, Gelfund, Small, and Stayn, Propensity to Initiate Negotiations, men and women participated in an Internet survey to identify if they believed it was appropriate to negotiate in various work-related fictitious situations. Women as a group were less likely than men to choose negotiation as an option, even though they recognized that negotiation was appropriate.

Recommendation: Women can be successful negotiators by positioning their needs as part of a collaborative process. By listening to a potential employer's needs and recommending outcomes that benefit both parties, women can get what they want for themselves and preserve the relationship at the same time.


Needs vs. Wants

Many women make decisions about salary based on what they feel they need rather than what the market will bear. They use past salary as their benchmark and may rationalize that a similar or slightly higher salary is what they should ask for. Since employers tend to reward people no more than they require, women are at risk for receiving less competitive packages than their male counterparts.

Despite the progress women have made professionally over the past 30 years, our culture often discourages women from asking for more and brands them as agg ressive or difficult to work with when they try to negotiate. In a 2003 study by Small, Babcock, and Gelfund participants were asked to play a game and offered $3.00 as compensation. If participants asked for more, they would receive $10. Almost nine times as many males asked for more money, suggesting that men ask for what they want more frequently than women.

Recommendation: Women can improve their negotiation skills by knowing their market value. Salary survey sites such as Payscale.com help job seekers define a potential range of salaries for a particular job. Professional associations and trusted friends in the industry are other valuable sources of information. By doing your research and presenting the business case for your requested salary, you improve your bargaining power and diffuse potential cultural biases.


External vs. Internal Centers of Influence

Women may be more likely to assume that hard work alone will be rewarded with a promotion and/or increased monetary compensation. They often wait for external factors and group consensus to determine their opportunities for advancement. In the Propensity to Initiate Negotiations study, researchers studied people's propensity to see possibility for change in their circumstances and found women were 45% more likely to score low on the scale indicating that women are less likely to see the importance of asking for what they want.

Recommendation: Women can increase their opportunities for promotion by taking a proactive approach to their career development that includes reporting accomplishments regularly, taking on high -profile assignments, and developing influential networking relationships.


Low vs. High Goal Setting

Research suggests that women set more modest goals than men and they generally make concessions earlier in the negotiation process. As a result, women typically have lower salaries than men in similar positions.

A 2003 study by Riley, Babcock, and McGinn revealed that men typically set goals for negotiation conversations 15% higher than women. As a result, men often receive better initial offers and additional leverage in the negotiation process. Men who set high goals for salary negotiations benefit not only from the initial salary conversation, but from all subsequent negotiations as well. Employers often assume that applicants with better compensation records are more capable than those who have been paid less and high goal setting may result in more opportunities for men as they move through their career.

Recommendation: Women should adopt a negotiation style that meets their individual needs, but should incorporate ambitious targets into their negotiation strategy. When you negotiate your compensation package you are not just negotiating your starting salary, but you are directly impacting every salary increase you receive from that point forward. Employers expect you to negotiate. In addition to the financial rewards associated with salary negotiation, you will gain the respect of the hiring manager and increase your credibility within the organization.

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