I thought I’d stray from the Business and Market news sources that I routinely look to in order to keep up with whatever’s going on out there in the world. Let me read some real life articles, whatever that may mean to you. So today I came across a blog in the NY Times (yes, bash it all you want, but I still like the good old New York Times) about how female MBA degree earners take a harder income hit than those with MDs, PhDs, or JDs when they take 18 months off to raise their children. They call it the “Mommy Penalty.”
Now I swear I am not a feminist (I hope I’m not just being in denial here). But this blog triggered the typical recoil response I feel whenever I hear about things like this, how women have to deal with disadvantages in the working world. The blog does not focus on female income levels vs. male income levels, but rather it discusses how women with MBAs have it the worst when compared to those with other career degrees. As someone who plans on going to B school sometime in the next 1-4 years, this study definitely shot up some red flags in my head.
According to a study by two Harvard Econ professors, Lawrence F. Katz and Claudia Goldin, female MBAs that took off 18 months to take care of their children earned 41% less than male MBAs. Meanwhile, female MDs did not see as harsh an impact, earning 16% less than their male counterparts. Female PhDs earned 33% less and female lawyers earned 29% less. The discrepancy in the extent to which their income is impacted has to do with workplace flexibility. Women have been flooding into certain fields like veterinary and pharmacy as these occupations tend to be more flexible in terms of working hours (shorter hours and less of a need to work weekends). 80% of all graduating veterinarians and 60% of all pharmacy graduates are female. Similarly, in the medical field, women with MDs appear to gravitate towards specialties that allow for more flexible schedules like dermatology, psychiatry, and medical genetics (as opposed to radiology, cardiology, and many surgical specialties, which require longer hours and stricter schedules).
Now on to the MBAs. According to this study, both men and women start out with almost identical salaries upon graduating from B school. However, five years later, women are earning 74% of what the men are earning. Fast forward another five to eleven years and women are earning 55% of what men are getting paid. For full transparency, 30% of this discrepancy was due to shorter work hours while another 30% was a result of career interruptions and job experience. Furthermore, a year after having their first child, women’s hours dropped by 17% and labor force participation declined by 13%. Three to four years later, women’s hours fell by 24% and labor force participation by 18%. Katz and Goldin write, “Many of the occupations that employ MBAs impose large penalties for deviance from the norm of long hours and no job interruptions.”
Well, this is what I have to say. First of all, I don’t mind long hours. In fact, unlike veterinarians, pharmacists, and many of those other doctor types, I don’t want a job that will give me work flexibility. (I know, call me crazy. Maybe it’s because I’m still relatively new to the workplace. I guess I’ll find out in a few years.) I’m not even focusing so much on the salary figures here, although of course I care about that as well. From a career perspective, I don’t want to risk getting an inferior job or one that will not allow me to live up to my full potential. If my work hours will drop and the likelihood of my leaving the labor force increases because of taking a long maternity leave, I want out. Just as I believe that I worked hard for my college degree, I know that I’ll feel the same, or more so, after I obtain an MBA. I am not going to let my hard earned education go to waste, not because I am stuck up and want to flaunt my degree, but because it’s only logical to put all your resources to good use, be it an MBA degree or an amazing skill set you have. So if an extended maternity leave will result in my getting hit with a big, fat “Mommy Penalty,” then WTF, I’m getting a nanny!
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.