“There are so many women filling very key roles at the organizations that are represented here tonight,” Kelly Watson, national service group leader, U.S. risk consulting practice at KPMG, said Thursday in opening remarks to an audience of more than 100 at Kean University.
Keynote speaker Constance Hunter, KPMG’s first chief economist, presented data to discuss the current pay gap in the U.S.
Women earn approximately 79 to 80 percent of what men earn, and the pay gap increases as women get older, she said. However, Hunter noted, “each successive generation is doing a little bit better.”
Women born in 1978 start at a higher pay level and as they progress through their careers maintain that higher level, she said. Hunter explained that although the amount of women with college degrees has increased since the 1970s, income gaps are prevalent at every single education level.
Highlighting the research of Harvard economist Claudia Goldin, Hunter said that pay disparity for women with advanced degrees has to do with the kinds of jobs they tend to have, which often result in pay consequence when having children and reducing work hours. However, for lower-skilled jobs, it’s much easier to substitute one person for another person.
“If a woman has children and is in a profession where she can work fewer hours, she doesn’t suffer that much adverse pay consequences from reducing her hours,” Hunter explained. “However, if she’s in a profession where she interfaces with clients, where there’s a lot of learning by doing, where she continues to augment and gain skills, every year that she’s working, those reduced hours are really significant.”
For example, a lawyer working 60 hours a week makes more than double a lawyer working 30 hours a week, she said.
The current labor force ratio is 49 percent women to 51 percent men. Hunter added that solid paternal leave parity policies are a possible solution to bridging the wage gap.
“In countries where women and men’s salaries are more equal the differentiator is paternal leave,” she said.
“Strong parental leave polices are definitely important, and obviously not the only thing. You also need a society that supports that equality and parity.
“The solution may not be only doing more for women, but making sure that you’re doing things for both men and women to participate in household activities, to participate in child rearing, to cutback on their hours to take paternity leave and through doing that you’re much more likely to end up with greater parity down the road.”
Hunter’s presentation was followed by a panel discussion moderated by Watson, which also included Sylvia Pozezanac, senior managing director for Prudential Financial (No. 15); Nicola Palmer, chief network officer and vice president at Verizon; and Irene Chang Britt, a board member of numerous corporations.
Pozezanac discussed the retirement income gap disparity.
“Women live longer, women have higher healthcare costs in retirement, women are more likely to be single in retirement and yet the median income is 42 percent less than that of men,” she said.
“The impact of the lower income and the time off in the workforce means that social security benefits tend to be 23 percent [lower] than that of men.
“Women are less likely to engage in empowering themselves in providing for their retirement coupled with the fact that the income is less to begin with.
“What we can do as employers, as senior executives in our companies is encourage women in the next generation to really be empowered by taking active participation in planning and saving for retirement.”
“Women and the Economy” was hosted by KPMG’s Short Hills office in conjunction with New Jersey Women’s Network to Network (N2N) and KPMG’s Network of Women (KNOW).
KNOW was established in 2003 by KPMG’s Women’s Advisory Board (WAB) to tailor and deliver WAB’s broad national programs, and strengthen strategic alliances through chapters at the local office level.
N2N is a consortium of women leaders from some of New Jersey’s most prestigious companies that provides a forum for professional women to share best practices and form mutually beneficial business relationships.