April 20, 2017
Global Research, Economics & Strategy
The Girl With The Draggin' W-2 (Supplement)
Frequently Asked Questions:
Wells Fargo Securities’ Economics Department recently released a report entitled,
The Girl with the Draggin’ W-2, which explores the complexities of the gender pay
gap. Following publication, we received many questions from interested readers.
Diane Schumaker-Krieg, Global Head of Research, Economics, &
Strategy for Wells Fargo Securities, responds to these questions below.
Diane Schumaker-Krieg
Global Head of Research, Economics & Strategy
(212)214-5070
[email protected]
Research Management
 What were the most surprising results of the study? Despite huge
advances in technology and the ability to work remotely, the highest paying jobs
continue to reward those who can work the longest and least flexible hours.
Physically showing up at the office (or wherever you’re required to be) is still a
prerequisite for getting ahead. And that puts primary caregivers — usually
working moms — at a disadvantage.
 Why haven’t we closed the gender gap? Why has progress stalled?
Because society hasn’t fully accepted that fixing the problem for women means we
also have to fix the problem for men. Both men and women need greater
flexibility in their lives. Yet, it is still difficult for men to tell their employers they
need time off to take their child to the doctor or to tell new acquaintances at a
barbecue that they’re stay-at-home dads. Until these evolving realities are more
socially accepted, the costs/burdens will fall on women. Some of the most
successful women in our Research division have spouses that are full-time dads.
In fact, Jodi Kantor of The New York Times wrote an insightful piece a couple of
years ago, “Wall Street Mothers, Stay- Home Fathers” that features three senior
women in my department.
 Given that female enrollment in college is surpassing that of men, why
aren’t we seeing increased pay parity? Actually we are. The wage gap would
be six percent higher if women were not out-achieving men educationally.1 But
women are more likely than men to major in fields that pay less upon graduation
— for example, education and social work versus computer science and
engineering.
 Talk about the role that cultural and societal expectations play. Is part
of the problem that women don’t advocate for themselves or seek out
sponsors? What remains unexplained about the gender pay gap? Not
advocating for oneself forcefully enough is certainly a factor. A well-known
Carnegie Mellon study showed that men are four times more likely than women to
ask for a raise and when women do ask, they typically request 30 percent less
than men.2 This may be rational because women are viewed more negatively for
asking! Of course, if you don’t ask, the answer is always “no.”
 Another factor is women’s tolerance for risk and failure. There are many studies
showing that men will apply for a job if they meet just 60 percent of the
qualifications, while women feel they need to be 100 percent qualified. This fear
of failure is a big factor holding women back.
Blau and Kahn (2016). “The Gender Wage Gap: Extent, Trends and Explanations.”
National Bureau of Economic Research.
2 Babcock Gender, Linda and Sara Lashever (2003). “Women Don’t Ask:
Negotiation and the Divide.” Princeton University Press.
1
Diane Schumaker-Krieg is global head of
Research, Economics & Strategy and leads all
fundamental research across sectors and asset classes
for Wells Fargo.
Over the past 7 consecutive years, Diane was
recognized by American Banker on its prestigious “25
Most Powerful Women in Finance” survey. In 2014,
Harvard’s Smart Woman Securities named Diane
“Woman of the Year.”
Research Management
WELLS FARGO SECURITIES, LLC
Global Research, Economics & Strategy
And women tend to be over-mentored and under-sponsored. Mentors can be great sounding boards, but
their influence on one’s career trajectory often ends with advice. On the other hand, sponsors tend to be
senior executives who can publically advocate on behalf of their protégés and accelerate their advancement.
Women are 50 percent less likely than men to have a sponsor.3
Finally, women often don’t get the benefit of honest performance feedback because male managers are
reluctant to provide it, fearing an “emotional response” or risk to their own careers.

Are there specific industries that perpetuate stereotypes and gender barriers? I have worked
on Wall Street for most of my career, and it has certainly gotten a lot better, especially on the trading floor.
But overall, hard-charging occupations like investment banking, private equity, venture capital and M&A
are more difficult for anyone, not just women, who need more flexibility. One of the advantages of working
in Research is that while there is a great deal of travel and frequent client dinners, there is no penalty for
writing a research report at your kitchen table at 3 A.M. So even within hard-charging occupations, there
are opportunities for flexibility.

What is the economic reasoning behind closing the gender gap? Greater labor force participation
— many women are now on the sidelines because after factoring in the cost of childcare (which has grown
more than twice as fast as median household income4), for many, it doesn’t pay to work. A McKinsey
Global Institute study indicated that full gender equality could add 11% to 26% to global GDP by 2025 — a
staggering $12 to $28 trillion.5 One positive factor is women returning to the workforce and working late
into their 60’s and even 70’s. Nearly 30 percent of women aged 65-69 are working (up from 15 percent in
the late 80’s).

How can businesses benefit from closing the gender pay gap? Do you think corporations are
realizing this? For businesses, closing the gender pay gap would not only attract more women but just as
importantly help businesses retain the high-caliber women they already have by making it more economical
for working moms to stay in the game. And of course there are countless studies showing that more diverse
companies simply perform better — higher ROE, higher sales growth and stronger corporate oversight.
That’s because they’re tapping into a deeper pool of talent that mirrors the diversity of their customers and
discourages groupthink.

Are there any policy solutions — either in the legislative or private sector that would help to
move the needle forward? On the legislative front, I think it’s very interesting that the state of
Massachusetts now makes it illegal to ask a job applicant about their prior compensation.6 This could be a
huge step forward, since women are generally paid less and asking for prior compensation perpetuates the
wage gap.
In the UK, companies with 250 or more employees must publish their gender pay gaps within the next year
under a new legal requirement and will be encouraged to detail an action plan to address inequities.7
In the private sector, shareholders can and should hold companies accountable. In fact, nine tech
companies were asked by shareholders to study compensation and commit to closing the pay gap. Several
of them publicly made commitments to do so. Amazon, Apple and Intel have reported that they’re near 100
percent pay parity.8
Hewlett, Sylvia Ann, Melinda Marshall and Laura Sherbin (2012). “Sponsor Effect 2.0: Road Maps for
Sponsors and Protégés.” Center for Talent Innovation.
4 Between 2000 and 2015, the Consumer Price Index for child care and nursery school rose an average
of 7.0 percent per year compared to a 3.5 percent average annual increase in the median household income.
Source: Bureau of Labor Statistics
5 Woetzel, Madgavkar, Ellingrud, Labaye, Devillard, Kutcher, Manyika, Dobbs and Krishnan (2015).
“How advancing women’s equality can add $12 trillion to global growth.” McKinsey Global Institute.
6 Cowley (2016). “Illegal in Massachusetts: Asking Your Salary in a Job Interview.” The New York Times.
7 Lawrie (2017). “Gender pay gaps must be declared by UK companies.” BBC News.
8 Weise (2016). “Amazon pays women 99.9% what it pays men.” USA Today.
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The Girl With The Draggin' W-2 (Supplement)
WELLS FARGO SECURITIES, LLC
Global Research, Economics & Strategy
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