The Myth of the Pipeline: Inequality Still Plagues Working Women, Study Finds

Feb. 18, 2010 — -- You've probably noticed that here at ABC, we've got a woman in the network's top news job. In Washington, women hold eight of the Obama administration's 22 Cabinet positions. Women now run half the Ivy League --- Harvard, Princeton, Brown and the University of Pennsylvania -- not to mention Germany and Argentina. It sure seems as if they're making real progress toward parity in the work world with men.

"If only that were true," say the authors of a new study.

The women's research firm, Catalyst, is out with a study today that finds even the best and brightest women -- the "high potentials" as they're called -- "lag men in advancement and compensation from their very first professional jobs."

Right out of the starting gate from business school, men are more likely to be assigned jobs of higher rank and responsibility and earn, on average, $4,600 more than women.

"I was shocked," says Catalyst CEO Ilene Lang of the findings. "This really ate away, undermined my confidence that important change had taken place."

The study of 4,100 male and female MBA grads from 26 elite business schools all over the world also undermines the longstanding conventional wisdom that women's parity in the workplace was only a matter of time. As soon as they achieve critical mass in the corporate pipeline, the thinking went, they'll make their way to the "top of the house."

Well, women now graduate from college in greater numbers than men; they graduate from law school in roughly equal number; they make up about a third of MBAs. The proverbial pipeline is stuffed. But just 3 percent of Fortune 500 CEO's and 15 percent of board directors at those companies are women.

"The last decade was supposed to be the 'promised one,' and it turns out that it wasn't," says James Turley, CEO of Ernst & Young, one of the companies that sponsored the study. "This is a wake-up call for corporations."

Even Without Gender Variables, Women Lag Behind

Could it be that women don't aspire to these jobs? Do their careers stall because they take time out to have babies?

The authors controlled for those factors and the findings didn't change. They compared the outcomes of only men and women who aspired to the CEO level and only men and women who do not have children.

"Even among high potentials without children, men's salary growth outpaced women's," the study found.

Lang says it's hard not to reach the conclusion that deep gender biases remain embedded in many corporate cultures.

"Companies cannot assume the playing field is level," she says. "They need to collect and review what they've actually done. Who did we hire? Where did we put them? What did we pay them? And they have to recalibrate compensation if they find inequalities."

"This finding is a call to action," says Teresa Finley, CFO of International Operations at UPS, another of the study's sponsors.

Lang says it's also an important wake-up call for the legions of young women who thought this battle had been fought and won by their mothers.

"We've raised them to think they can do anything," she says. "There are still a lot of inequities. They need to be armed and vigilant."