#22 Women's Fight for Workplace Equality: What is the progress? with Naomi Cahn and June Carbone

In a world where more women are entering the workforce than ever before, why does the gender wage gap persist so stubbornly? Our guests Naomi Cahn and June Carbone, legal scholars and co-authors of "Fair Shake: Women and the Fight to Build a Just Economy," reveal the hidden game being played in workplaces across the globe.

The conversation begins with Betty Dukes, a Walmart employee told "people like you don't become managers" - a story that eventually led to the largest class action lawsuit in U.S. history. From there, we dive into the concept of the "winner-takes-all economy," where CEOs earn hundreds of times more than average workers and the rules of success favor those willing to break rules without getting caught.

Women face what our guests call a "triple bind" in this system: they lose if they don't compete like men, face harsher punishment if they do compete like men, and are pushed out once they recognize the unfair game. Research reveals that environments rewarding hubris, narcissism, and risk-taking without accountability systematically disadvantage women - not because women can't take risks, but because the system rewards a particular kind of reckless risk-taking more commonly associated with men.

The most striking revelations come when our guests connect gender inequality to broader economic dysfunction. The same companies engaging in wage theft, earnings manipulation, and quality shortcuts are often those with the worst gender disparities. Meanwhile, research consistently shows that companies with gender-balanced leadership demonstrate better long-term performance and fewer instances of financial misconduct.

Whether examining how COVID-19 affected different groups of women, unpacking the myth of women's risk aversion, or exploring pathways toward change, this episode challenges conventional wisdom about gender in the workplace. The solution isn't for women to "lean in" harder - it's to transform a broken system that shortchanges everyone except those at the very top.

Ready to understand the real forces keeping women from workplace equality? This episode provides both the diagnosis and potential cures for one of our economy's most persistent problems. Subscribe, share, and join the conversation about building a more just economy for all.

Link to the book: Fair Shake: Women and the Fight to Build a Just Economy

Naomi's recommended book: Women by Caroline Criado Perez

Link to Cordelia Fine's book referred in the episode: Testosterone Rex – Myths of Sex, Science, and Society

Please visit our website, www.businessandsociety.net, for more inspiration.

Chapters

• 0:00 Introduction to workplace gender equality
• 8:13 Betty Dukes and systemic discrimination
• 17:14 The winner-takes-all economy explained
• 27:04 The triple bind facing women
• 36:12 Risk-taking and gender dynamics
• 43:17 COVID impact and women in workforce
• 49:14 Solutions and pathways forward
• 54:30 Power of collective action

Transcript

Senthil

00:03

Hello everyone, welcome to the Business and Society podcast, where we discuss ideas at the intersection of business and society. I'm your host, senthil. In today's episode, we will discuss women's struggle to achieve workplace equality. More women are entering the workforce today than ever before, but the gap between men's and women's earnings, even within the same industry and same jobs, remains. I'm excited to be joined by Naomi Kahn and June Carbone, two experts and respected legal scholars, to discuss this topic. 

00:38

Naomi is the Justin Anthony M Kennedy distinguished Professor of Law and Co-Director of the Family Law Center at the University of Virginia School of Law. An expert in family law and feminist jurisprudence, she previously taught at George Washington Law School. June Carbone holds the Robina Chair in Law Science and Technology at the University of Minnesota School of Law. An expert in family law and bioethics, she previously taught at the University of Missouri, at Kansas City and Santa Clara University and served as associate dean. Naomi and June have authored and co-authored several influential books and articles, and their work has been featured in major media outlets. Their latest book is Fair Shake, subtitled Women and the Fight to Build a Just Economy, which they co-authored with Nancy Levit. I sat with Naomi and June to discuss some of their ideas from the book and, in general, women's equality in workplace. Warm. Welcome, Naomi and June. Thank you for joining me today. 

June

01:46

Thank you. 

Senthil

01:48

Let's start with Betty Duke's story, the first of many stories you featured in the book. Betty is a frontline retail worker and one day a supervisor tells her people like you don't become managers. With this start I thought frontline workers were often the victims of gender discrimination, but further reading, your book vividly presented that it doesn't matter what your role or sector is. If you are a woman, chances are that they were indirectly given the same kind of message as Betty People like you don't get promotion or pay parity. Is that a fair observation? 

June

02:29

Yes. Now the fascinating part of this is what does that mean? When the supervisor first said it to her, Betty Dukes, who is Black, thought he was referring to her race and she initially filed a discrimination complaint on the basis of race with the EEOC. Later, as they were assembling a class action on the basis of sex discrimination, she met the lawyers who were arranging the class and she said in interviews at the time she thought sex discrimination was quote what happened between Bill Clinton and Monica Lewinsky. It never occurred to her that that might be what was going on. And when we started looking, one of the things we found is that Sam Walton, the founder of Walmart's, Walmart's generally, as it moved out of Arkansas to become a national company, was sensitive about being embarrassed by racial discrimination allegations intended to quickly settle them, but its statistics were dramatically worse when it came to women and it fought those allegations. It did not settle and this case went to the US Supreme Court, the largest class action in the country's history. 

Senthil

03:58

And it seems she didn't win this case 

June

04:08

no.

04:08

Again, the statistics were quite striking. Something like two-thirds of hourly employees were women, but only 18% of store managers. They picked the candidates for management training for a tap on the shoulder. Betty Dukes kept pressing I want to be a manager. And you know she had done well. She had gone from hourly to full-time, full-time to become a customer services manager the highest rank she could hold as an hourly employee. And yet they kept saying you're not management material. And it turned out that the statistics nationwide were remarkably uniform on the selection of men over women, without announced criteria as a distinctive pattern that had lasted for years, with Walmart refusing to do anything about it. So it should have been a very strong case for class action treatment and the Supreme Court ruled 5-4 that cases could proceed individually. She could say you didn't pick me because I'm a woman, but they couldn't bring this nationwide class that affected all women who had wanted management training and didn't get it. 

Naomi

05:39

Right, the Supreme court said that the overwhelming gender differences which could be seen throughout the entire Walmart system, Even though they were company-wide disparities, they shouldn't be seen as the result of company-wide national policies, and so that's why each suit needed to be brought one store at a time, because the claim was, if there's no national policy here, it's each individual store manager making these claims, 

June

06:03

and that's our twist. 

06:06

This is completely disingenuous for two reasons. First, legally, as Justice Ginsburg pointed out in her dissent, the failure to have criteria is itself a policy. Walmart delegated personnel matters, and only personnel matters, to the local store. It deliberately had no announced criteria and no personnel management. That was a policy and in other cases the precedents up until that time, not having criteria for hiring, having entirely discretionary hiring practices, was a smoking gun. The court dismissed them. But our twist when we ask why I mean why You're getting in trouble on this you have a number of people who've sued. 

06:59

They're suing all over the country. You know, Sam Walton back in the 80s put Hillary Clinton on his board back in Arkansas when she was the wife of the governor of Arkansas. Why? To address the sex discrimination claims that had dogged the company. But he did nothing about them. Why? Because, as he announced quite publicly, we are going to be a low-wage enterprise. 

07:35

Walmart is number one in the country for wage suppression, for violation of the wages and hours laws. It has paid more, well over a billion dollars in fines for violating wages and hours laws that require paying overtime. And the way he did it, without getting in trouble, without his top executives getting in trouble is no criteria. You pick on the basis of those people who will oppress their employees. You have a bonus system, total wages divided by labor costs, and only labor costs. Other costs are controlled by corporate headquarters in Bentonville. 

08:26

Store managers who are successful every three or four years to guarantee that you systematize the successful techniques, no questions asked. And the store managers who have lower bonuses, who are not successful, based on this reductionist criteria that determines bonuses, Walmart routinely fires 10% of store managers every year, even in a good year, audits the ones who are low performing and if they discover there is gambling in Casablanca, there are wages and hours violations, then it fires the managers instead of merely demoting them. So it can say you see, we have a compliance system. And so what we found is the things that were associated with sex discrimination, the absence of criteria, moving employees, often on short notice hundreds of miles away, selecting for certain traits that were, you know, whatever the manager thought was necessary to succeed, which tended to result in more men, in fact, were closely associated with the techniques that produced wage suppression, violating the law if necessary. This is not accidental. It was quite intentional and Walmart clearly thought it could not alter the percentage of its employees who were male, without altering the system. 

Senthil

09:51

So that's a great segway for two important ideas that are central to your book. Let's go one by one. The Winner takes all economy. You argue that the winner takes all economy is the key reason that holds women back. Tell us what you mean by winner takes all economy. 

Naomi

10:14

Let me start by saying that there are many other explanations for what's holding women back, and I mean we looked at, we started the book because, in an era of seeming women becoming half or more of all college students, women becoming CEOs of major corporations, women becoming heads of countries, it looked as though women were starting to win. And it looked as though the gender wage gap, the gap between what men and women earn, each year it looked like that might be decreasing. And what we found instead was that the gender wage gap, the gender disparities, things had stalled. There has been, certainly there's been, lots of progress. We're a lot closer to gender parity than when we were in the early 1960s, for example. 

11:21

But the question is why have things stalled? And so the conventional explanations well, gee, women make different career choices. Women are the ones who are primarily the ones who take care of children, all true, but notwithstanding all of that, the gender wage gap had started to decrease. And so we were interested in why, on top of all of those conventional explanations, the gender wage gap, gender parity in the workplace had stalled, and I'll note that in the US the gender wage gap is actually slightly better than it is in Australia. In the US it's under 20%, in Australia it's just over 20%, but it's remained stubbornly stuck in the same range for a number of years. And so the explanation that we found and we start with Betty Dukes, as we've already discussed at Walmart, just to show that this is an explanation that helps us see what's going on in all sectors of the economy. And so, June, I'll turn it over to you to talk about the winner-take-all economy. 

June

12:34

Sure. So one of the things we found is the wage gap has continued to decrease, but mostly because the biggest losers in this economy are men without college degrees. If you look at men who have high school degrees but not college degrees, their wages have declined in real dollar terms since the mid-70s. That's not true for anybody else, not true for the top men, not true for men with college degrees, not true for women as a group, so that produces most of the advances for women, who have become better educated, more likely to graduate from college. When you look, though, who are the big winners? This is the winner-take-all part. The big winners are finance, the single greatest disparity. Something like six out of the eight professions with the biggest gendered wage gaps are in finance. In the period from roughly the early 80s until the financial crisis, something like 52% of all increases in income in the entire economy went to finance. When you break down finance and you look where did the money go? It went to the people at the top, and this is what we mean by winner take all. The people who call the shots, the CEOs and their top lieutenants, appropriate a disproportionate share of all increases in income, of all assets associated with companies to themselves. They squeeze the bottom line workers, they sometimes squeeze middle management. But CEO pay exploded, and it exploded starting in the 90s with a change in the way stock options were treated for tax purposes and so a bigger share of compensation came in the form of stock options. The valuation of bonuses and stock options is tied to share price of bonuses and stock options is tied to share price, and CEOs were in a position to manipulate share price. So we have a section in the book in GE, we have a section on Tesla, but in both cases the CEOs game the system to produce the numbers Wall Street wanted. Share price jumps. Ceo bonuses go up. 

15:12

Jack Welch at GE, the legendary CEO who remade all the management playbooks throughout the United States, lauded in business schools. Part of what he did was to dramatically increase the number of executives who got stock options. And then he prided himself on reaching down into the ranks, on picking somebody with confidence to spare, promoting that person ahead of the people who'd been waiting in line, playing by the rules, playing by the rules. And he bragged about giving his top lieutenants freedom to do whatever they wanted, so long as they met their numbers. What are the numbers? 

15:57

You know for DOGE, Elon Musk's current opportunity, what he has his boys doing in government, it's slashing costs, slashing the number of employees. For General Electric it was earnings management. It was producing the quarterly earnings and for 20 years Jack Welch beat quarterly earnings estimates almost every quarter. Earnings went up 300% or 400%. Share price went up 4,000% and the share price increases are the basis for the winner-take-all rewards. They unduly benefit top executives, the CEO, shareholders, but not average line workers. And so that's the system, and Welch was a master at it. 

Senthil

16:57

So that summary basically pits people who hold power and people who don't. How did women got into this crossfire? 

June

17:10

One statistic, and then I'll let Naomi respond. 93% of gender disparities in executive pay come from bonuses, from incentive pay, not base pay, Naomi. 

Naomi

17:33

And another mind-blowing statistic I don't have the comparable statistics for Australia, but for the US. If you look at the increase in CEO compensation in the US In the 1950s and 1960s it was maybe about 20 to 1 in terms of the average CEO to worker pay gap. So CEOs were getting 20 times. That's gone up at least 10 times, and so CEOs are getting somewhere between 200 to 300 times what the average worker earns. And so that's another stunning statistic that shows the impact of these bonuses on the pay gap. 

18:14

But what we found? How do women to respond to your question how do women get into this picture? That's where we develop something that we call the Triple bind, and so the triple bind is the first leg of the triple, or the first component of the triple bind is, if women don't compete on the same terms as men, they lose Betty Dukes. If women do compete on the same terms as men, they're punished more harshly for their sharp elbows and for their misdeeds. And we give examples. There was an amazing study done by a Harvard professor of what happens at the Wells Fargo Bank in the US and what he and his team were able to do was to get access to data about the misdeeds that employees were committing the financial misdeeds that the brokers were committing and what he found was that women were more likely to be punished for these misdeeds than men, and also less likely to be hired subsequently. So women who commit misconduct in finance are more likely to be fired and less likely than men to find new jobs. And what's also strange about what he found is that the men are likely to have committed even greater offenses. Nonetheless, men still win, even in this world of misconduct. 

19:54

So the second leg of the triple bind is, if women do compete on the same terms as men, they're punished more harshly for their sharp elbows. And then the final leg of the triple bind is when women see the rules of the new game. By that time they're pushed out and they decide they don't want to play on those terms. And so what we did is that's how we discussed women's role in this economy. But we emphasize throughout the book it's not just about women. We see women as the canaries in the coal mine. This is true, the winner-take-all economy that June has described, the fact that wages for less educated men are not rising. We see this as affecting men as well as women, but we started the book with women because of the gender pay gap. We then said oh no, it's not just women, it's everybody in this new winner-take-all economy. 

June

21:07

So one of the things is that when you're playing this game, it changes who you select for. So we described this. Finance is a great example. So women fought really hard in the 90s to get a toehold in finance, and then finance booms. As you move into the 2000s, in the run-up to the financial crisis, finance is the place to be. You see something like 40% of graduates of Harvard and Yale going to Wall Street and you find, as that happens, the people who are going to Wall Street, the people being hired at Wall Street, are much more heavily male, and if women do get hired, they're more likely to leave. Now what's going on Again? This is not just finances moving compared to the rest of the economy. As finance booms, it becomes more heavily male. Finance is selecting for people who can break the rules and get away with it. 

22:06

Michael Lewis's influential book, Liar's Poker, which made him famous. It's the ability to rules and get away with it. The ability to cheat your clients and get away with it. If they hate you. You're not getting away with it. You've got to snooker them and not have them write you out completely to the firm in a way that's going to get you in trouble. Now, when you start asking who are you going to pick to do that? Well, there's a wonderful literature, composite literature, by the psychologist after Enron. After the Enron WorldCom scandals and the dot-com bust in the early 2000s, before the financial crisis, and they started putting together the personality profile of a person who does this, Somebody who is narcissistic, over-optimism bias, hubris, amorality. And it turns out all of those traits individually are more likely to be male. All of those traits collectively are really more likely to be male. Let's take narcissism. wonderful study that asks employees to rate their bosses. The bosses who are male, they rate higher in narcissistic qualities. They also rate as more effective bosses. The women the employees rate higher in narcissistic qualities, they rate as less effective bosses. 

23:44

fter it turns out that men who have these qualities narcissism, amorality and are successful, the more successful they are, the more they act in a way that is entitled, including to the favors of the employees who work under them. The more they engage in sexual harassment and bullying behavior, the more they produce workplaces with low morale and high turnover, driving out in particular, women and men who basically aren't alpha males. So what you get as you move toward winner-take-all rewards, highly competitive environments, high-stake bonus systems, reductionist metrics that say what did you do for me today and don't inquire too closely at how you produce the results, the more you going to select for a certain type of man and drive everyone else out. 

Senthil

24:53

And another stereotypical explanation we often hear is women's appetite for risk as men, and you briefly wrote about it in the book. What does the research say about this? 

June

25:06

Naomi, do you want to talk about it or do you want me to 

Naomi

25:08

Go ahead? Go ahead and start.

June

25:10

Oh, there's a lot on this. First of all, and we love I'm not going to get the title right, but there's a book that was written about GE. This is a management book saying why do corporations pick so many terrible men as CEOs? 

25:35

And what a lot of literature shows is that taking untoward risk, that this system selects for people who take risks, but not necessarily prudent risks, and that the more you create a risk-taking environment and the more male it is, the more men take risks in order to show off for each other. So it becomes a herd mentality in which risk-taking establishes your bona fides within the group. But you also tend to see more big failures sometimes big successes, but big failures from such behavior. When you look at women wonderful studies of women there aren't that many women who own hedge funds, but those who do turn out they take more prudent risks than male hedge fund donors. So again, if you simply talk about risk-taking per se, you tend to see more men taking risks. If you start controlling for things like the prudence of the risk-taking, I find women do quite well and often outperform the men over a longer period of time with respect to things like hedge fund management. 

Naomi

26:54

We have a wonderful chart that shows performance of companies with female CEOs and with mixed gender different genders at the helm. That shows that those companies are more successful in the long term. And so, yeah, there's risk-taking that appears to be breathtakingly fantastic that makes headlines. And then there is the steady, keep going, keep actually making your numbers with real products and take extremely well-calculated risks and don't behave in that wildly narcissistic, with those wildly narcissistic behaviors, and look what happens to your company. It's going to perform better. So we do look at the long-term health of companies. Focusing on that and saying gender balance at the top really makes a difference. 

Senthil

27:59

So it's the conventional definition of risk that needs a relook after listening to you, rather than saying that women take this type of risk of that

Naomi

28:08

and I would say there is a wonderful book on how there yes, exactly there are stereotypes that women are not risk takers, that that stereotype is absolutely incorrect. Women absolutely are risk takers. It's just that they think before they take the risks. And again, I do want to say we are trying not to say we certainly don't think all women act in certain ways, all men act in certain ways. Women are always more likely than men to take calculated risks. That's certainly not what we're saying. We're talking about, if you look at what people expect women to do, what the norms are, what people think of as femininity or masculinity. That's what we're looking at. We are not saying all women do this, all men do that, et cetera, et cetera. We're trying to be more nuanced than that, and we don't talk about it in this book, but we also we recognize that people are a mixture of both. 

June

29:17

Yeah, can I? Because I view it as more complicated than that. So let's take what Jack Welch was picking, which is hubris. Okay, so you take hubris, you take narcissism, you take amorality and you take those things, and it tends to go with greater willingness to take risk. Now, each of those traits independently. You see, men are somewhat more likely to do it than women. But combine them now and what you find is, if you're selecting for the guy with a whole lot of hubris and a certain amount of narcissism and amorality all three traits not only are they more likely to take wild risks, they're also more likely to do the kind of thing that you see Elon Musk doing at Tesla. 

30:11

So what Elon Musk did that made him the richest man in the world was to beat production estimates, and he is an absolute ogre. I mean, yes, he ran the company in a dictatorial fashion. He fired people willy-nilly, and certainly anybody who spoke up or defied him. He emphasized you've got to beat these numbers, even if that means that the quality of the Teslas you're putting on the road is below that of a Kia, according to one car guy, and Musk admitted it. He said look, never buy Tesla in the first production run by the second or third will have fixed the problems. And if you think of that mindset, absolute drive, willingness to run roughshod over others, enormous ego, enormous hubris, it's not just that there are more men than women with that combination of traits, it's also there are a whole lot more men than women they get away with, who are not hated to a degree that they're driven out. 

31:24

And we talked to and Naomi mentioned Mark Egan, who did the finance study, and he said look, you want to predict an employee in a financial firm that's going to commit misconduct? Number one, or people have done it in the past. Number two are men. Men all by itself, without all these qualifications, is one of the biggest predictors of willingness to commit misconduct and the reason they're more likely to be hired at other firms. His subsequent paper, which was not on gender, is called the Market for Misconduct and it makes the point that there are certain firms that specialize in misconduct. That's how they make their money. They don't pay as well and they're not quite reputable, but they will hire the people fired for misconduct and they discriminate even more than the companies that fired the women in the first place In hiring for people with a demonstrated record of misconduct and more men than women. 

Naomi

32:24

I do just want to add, because the person, professor Cordelia Fine, who teaches at the University of Melbourne, wrote on testosterone wrecks, on making the myths of our gendered minds, and looked at how risk-taking is defined. So just a shout out to Professor Fine's work. 

Senthil

32:45

Fine, thank you. I'll leave a link to that paper along with your work, the podcast description. And a common theme in the examples which we discuss now and which is on the book is that men discriminate against women. Is that always the case, or are the examples you presented in your book by chance? What does your research say? 

June

33:15

Well, this is what we're arguing. So let's take the Betty Dukes chapter. We produced an initial draft and we said oh, you know, this doesn't make any sense. She has 20 years of experience in retail. She was making steadily, being promoted and they just couldn't see her as a manager. This sounds like unconscious bias, stereotyping. They tell her you're not the kind of person we promote. 

33:38

And then we started looking at it and saying wait a minute, there's something else going on here. And there are two things that we want to emphasize in environments where breaking the rules and getting away with it is the name of the game. One is that and this was the first leg of the triple bind all the women in our stories didn't realize there was a secret game going on until it bit them. And you know, with Betty Dukes she bought into what Sam Walton wanted her to believe that Walmart believed in Christian values. They took care of their neighbors, they had roots in the community, they cared about their customers. They made her a customer service manager because she had those qualities of warmth, concern for others, christian values, and she thought my kind of place. Except that's exactly what Walmart did not want in its managers, even though it's not what it was saying. So you get that a hidden system. But then the second piece is and you know, some of that involves stereotyping, but they were right about Betty Dukes. She did not want to become a manager to cheat her fellow employees, and they were accurate in that. The second thing, though, is, I think, very important and there's a huge bit of research on this is. 

35:16

Men often say male managers that they have trouble reading women. They don't understand women as well as they understand men in terms of the ability to predict how people will behave. Well, if what you're doing, as you know, as the big boss, is creating a system that incentivizes wage theft, you've got this bonus system and it's total sales divided by labor costs, and suppressing labor costs are going to be the name of the game. You've got to be able to guess whether your employee will do that without you telling them to do it. Men who don't predict women's behavior very well are much more uncomfortable with women in that environment. 

36:07

One of the women we interviewed told us a story about meeting her boss for the first time and he described how the assistant had checked him into a hotel room with mirrored ceilings and the effect this had on his libido. And she wondered why is he telling me this? She said to us I didn't think he was hitting on me and I told the story to my husband and he laughed and he said oh, you know, a man tells that kind of story to another man. He can tell a lot about the man. He can tell is he a goody two shoes? Is he a player? Is he irreverent? You know, is he straight laced? Those kinds of things. And you know insight into character. 

36:46

There's no good answer for a woman with that kind of story. If you start joking around then it's like a come on and you don't want to do that with your boss. So how are you supposed to respond? She had no clue, the woman we talked to and thought there was no good answer. But think about a man reading the signals he gets from her. What does it tell him about her? It doesn't tell him very much about whether the success of the company is on the line. She'll cheat, and that's what he really wants to know. Will she fudge the numbers without being asked to fudge the numbers. Will it occur to her to, you know, kind of engage in informal trades with the other players in the company in a way that may not be good for the other player's division but is cashing in on her personal friendship? That's what you want to know. 

38:07

and men who don't read women very well can't trust them to break the rules and get away, and so that's the unconscious bias we discovered, kind of backed into as opposed to, you know didn't fit our preconceptions when we started.

Senthil

38:14

Wow, that reminds me of a statistic you mentioned in your book. There are about 300 companies I may be wrong here out of Fortune 500 companies that committed wage theft. That was shocking. Could you talk a little bit about it? 

38:27

How does that apply for women in workplace.

June

38:31

Yeah, so you know when you can. Let me talk a little about earnings management too. So earnings management if you do too egregiously a security is fraud, if you kind of just shave the numbers a little bit, not going to be caught up in it. And the numbers I found were an estimate of and nobody's sure. So I guess who likes to write about this is the accounting journals. And the accounting journals say you know, hey, if you reward earnings management, then everybody does it. 

39:02

And we have this study where we found out that the more the companies cared about share price changes, the more they engaged in earnings management of various kinds. And we had some studies where he asked them would you shave the numbers to accomplish this result? And a remarkably high percentage of executives said they would. Well, our estimates, using different measures, were anywhere from 40 to 72% publicly traded companies engage in earnings management. That's really high and that means the willingness to do it and get away with it. So we have this wonderful study from NASDAQ. You know NASDAQ said hey, the more women there are on boards and, by the way, in our upper management, the less likely companies are to engage in earnings management, to engage in misstatements that require recalling financial documents and having to amend them and a variety of other things that are bad for companies. So we think having more women on boards would be a good idea. Now, the Fifth Circuit it is Fifth Circuit, Naomi?, has just ruled that it's illegal for NASDAQ to say you have to disclose how many women you have on the boards and you must have at least one. Okay. 

40:17

And when you look at the literature, I mean the serious social scientists don't say women are moronists, that's why this works. 

40:24

They say women tend to come into corporate boards through different routes. 

40:29

For example, if you talk about accounting committees, you know the corporate board has an auditing committee that is supposed to review the financials of the company and there are some studies that suggest if there are more women on the audit committees, the company's financial statements are more likely to be accurate. 

40:50

And when they look at why, one of the reasons they found out is that men who are on corporate boards who do auditing, tend to be, you know, from the big accounting firms. They charge by the hour. The more time they spend on the corporate board jobs, the less time they have to make more money elsewhere. But the women who are on corporate boards tend not to be accounting firm partners. They're more likely to have had in-house auditing experience where they're paid a salary rather than by the hour, and those women will spend more time doing an audit as a board member because the opportunity cost to them is less. So it's not men versus women, it's big firm auditing partners versus people who are in-house auditors produce the difference, but that tends to correspond with the different pathways men and women take in getting on corporate boards. There's a lot of evidence for things like that. 

Naomi

41:50

Would it be helpful to define wage theft, or do you think everybody knows that wage theft 

Senthil

41:56

It'll be great if you define, I myself got confused.

41:59

What does wage theft mean? Do they take the money or they underpay? 

Naomi

42:02

Yeah, wage theft is when an employer doesn't pay a worker the benefits that the worker has earned, and it could be that they shortchange them on wages. It could be that they don't give them a lunch break. It could be that they don't pay overtime, not paying the worker for the pay that the worker has earned or for the benefits like a lunch break, et cetera, that to which the worker is entitled, and just in the US in the three years between 2017 to 2020 three billion dollars was recovered in these stolen wages, and it takes a variety of different forms. There's a wonderful Seba Wahid, who's the research director at UCLA's University of California, at Los Angeles's Labor Center, points out that wage theft is so common because many employees, lots of workers, don't really know what it is. So you don't know. 

43:14

When your boss says, could you please stay another 15 minutes, and you've, then your workday has ended, you've clocked out, but your boss says, could you stay another 15 minutes and just do the small extra job or something, and you don't get paid because you're no longer literally on the clock. Wage theft can be that simple. Or it can be putting in overtime, hours that you know, hours that you put in that you just don't get, that you just don't get paid for, and it may not seem like a lot of money. Oh yeah, one or two hours of overtime, but that adds up and it can be a significant amount. I mean billions of dollars in that three years of period that was recovered

June

44:02

and that's only what was recovered. 

44:07

I guarantee you, there is several times that much that we don't know about. 

Senthil

44:13

Right and how are events like COVID-19 pandemic or the development of gig economy treating women in workplace? 

Naomi

44:24

I'm sorry. How are other elements like in the gig economy? 

Senthil

44:28

Yeah, gig economy. There are once in a century events like COVID-19 pandemic. I'm trying to understand how these events or developments in economic models affecting women in workplace. Are they making their life better? Are they turning out to be worse? Give us some perspectives there. 

Naomi

44:48

Well, at the beginning of the COVID-19 pandemic, at least in the US, there was this idea that women were being hit harder than men, in part because, when the schools closed down, women were the ones who were more likely to be staying home with the children. It turns out there was much more of a class difference in terms of how COVID-19 actually affected people, those people who could work from home, so higher income workers, men and women, were less likely to be adversely affected than people who had to go into workplaces. So think of people who worked in factories or people who do food service work, and so that's in fact so. It was actually a class gender gap that happened as a result of COVID-19. 

June

45:42

Yeah, let me talk about COVID a little bit because I found it fascinating. So when you look at women, and one of the reasons for the gendered wage gap is women who are planning to have children and who are not just primary caretakers but primary caretakers or co-equal caretakers, but not people who have endless supplies of nannies okay, or stay-at-home husbands those women. When you look at the career trajectory, the longer a woman delays having children, the higher her income tends to be. But then when she has children she becomes less likely to move, more likely to stay in a company if she's passed over for promotion than a man is and she hangs on to that job. Because if you have a woman who has made it into the workforce, has a job where she's respected by her peers, not at any big risk of being fired, and now she has kids, she needs parental leave, she's more likely to have parental leave if she's got a good job, she you know COVID hits. She needs to be able to work from home, though that, you know, a college graduate woman with a good job with benefits turns out to be among the least likely employee in the economy to quit. So with COVID, you know, women, you know, tended to hang on to those jobs to do the best they could, even if they were carrying a bigger burden than men. They also were more likely to go back to work in the same job once the pandemic was over, and that was a period of tighter labor markets where it was easier to move. 

47:34

What you see is the stickiness for college graduate women in jobs with benefits and flexibility was perhaps the stickiest of any employee in the economy. The opposite is true for women who don't graduate from college. They tend to be in the Walmart types of jobs. You can't work from home, there aren't benefits, hours aren't flexible and the buses are jerky. Anyway, they turned out to be the most likely to quit and the slowest to come back. My daughter had been a pastry chef and she quit when she had kids, but a lot of her friends were still in the food biz. You know COVID shut down the pandemic shut down restaurants and her friends discovered you get jobs that pay more with bosses who were nicer to them outside the food biz. A lot of them didn't go back and so what you see is this divergence Again, women with college degrees in good jobs were most likely to stay in the labor market. Women without college degrees in not-so-forgiving jobs were the least likely to stay in the labor market and the slowest to come back after the pandemic ended. 

Senthil

48:55

And you argue that women are the canneries in the coal mine that signal the entrenched existence of the winner-takes-all economy and its many abuses. How are women overcoming this? Would you give some stories of women who are finding a way forward? 

Naomi

49:14

Sure, I mean. We talk about how the advice to women is lead in... take those greedy jobs, work even harder than the men and make sure that your bosses know how much you're willing to lean in. And our advice is you have to change the system. And so we talk about people who are challenging the system. We talk about people like Indra Nooyi, who was the first woman of color and first immigrant to head a Fortune 50 company in the US, and how she talked about the importance of diversity, the importance of ensuring that men and women take on equal care work, the importance of changing family roles. And so we talk about the need throughout to change the system to make it so that work at the top doesn't mean putting in an inordinate amount of hours just so you can claim my bonus is bigger than your bonus. Work should mean my company is making better products than yours. The system should not be based on these huge bonuses. It should be based on better products and so changing how we view success in the workplace away from large amounts of money and instead looking at better quality control, looking at a more equal workplace with more. And, yes, we do talk about the importance of ensuring diversity, equity and inclusion in the workplace, not because those are buzzwords, but because the workplace functions better for all workers and ultimately it's going to be better for the long-term health of the company. So those are some of the things that we talk about. 

51:35

The three of us June, Nancy and I are all lawyers, and so we say the law certainly can make a difference at the margins. Certainly, public policy that promotes the reason that the pay gap decreased was in large part because of laws that said you need to ensure that there is equal pay for work of equal for equality, regardless of whether it's men or women who are performing that work, and so you need pay equity for men and women in the same jobs. So the law certainly plays a role, has played a role. We look instead at how the law can play a role in things like making it so that bonuses are taxed at a higher rate so we can go back to the rates. In the US it's not unheard of to have higher marginal tax rates for a lot of money. That's what we had in the 1950s. So we talk about changing laws. 

52:44

More generally, we talk about ensuring that lawsuits can hold corporate officers and directors responsible when they create harassing environments. So there's certainly a role for law. But we also talk about the importance of collective action, and in the US we have a very small union membership rate. It's just around 10%. We talk about the importance of unions and women actually do better when they're members of unions than women who are not members of unions. We talk about that. We talk about the importance of the B2 movement, of actually speaking out, of calling out where abuse has happened, the importance of and this is an international development concept the importance of transparency, the importance of showing what is actually happening in the economy and of having people speak out. 

Senthil

53:51

So the two key solutions which I observed when I completed reading your book is it needs systemic change. One or two women standing up and saying change this is not going to help. Second is collective action you talked about. Talking of collective action when it comes to discrimination. How can an individual overcome the fear of retaliation and social scrutiny, which are the first and most challenging steps to overcome before finding a way to collective action? In my experience alone, when I wanted to stand up for someone who's facing injustice, these are the two things which scared me, and I have to overcome them to stand up and speak for them. 

Naomi

54:33

So what caused you? What gave you the courage? 

Senthil

54:37

Maybe my upbringing. I grew up seeing these things getting normalized. I thought, when I am in this position, if I'm not speaking out now, then I'll never speak out. So it just, in a way, triggered me. Some called it as wrong when I stood up, said it's a career suicide you're doing. But some said that's the right thing to do. But nonetheless it's such a mental agony to go through that and break and speak for people who are getting suppressed or face discrimination. So when you say collective action and you highlighted that there are very few percentage of people who are part of collective action, it's even harder, isn't it? 

June

55:17

No, it's. You know, virtually every woman we profile in the book experience retaliation, whether they describe it or not. I mean, you know in some cases it's part of the case and we spent some time talking about it. In other cases, you know they had reached the point where they're being shunned aside and it's either fight back or give up, and so it's pervasive. Again, what we're describing are lawless environments run by people who run them as their private bailiwicks, even publicly traded companies. You know part of what these competitive, bonus-based workplaces do people complain sour grapes. That explains why they got a low bonus. They're complaining because they got a low bonus. We could fire them. That happened to the woman at Tesla we described Once she started complaining about sexual harassment, about product quality concerns. She got fired and they bad-mouthed her in the press. And they do that deliberately. They often hire people through different pathways because it's easy to get rid of them. So that's pervasive and I think the people who fight back some of it is the right time defended the bad cases in every administration. 

56:50

We were the civil division and there was a picture on the wall of my office the year before I got hired and there were all white men and white women in a miniscule and by the time I left five years later, it was almost 50% women and about 25% non-white. And the law, the change in the law was you know, there was a paradigm shift in the United States, I think Equal Pay Act is routinely violated, almost impossible to enforce. I think it has very little effect. I think what does have effect is abuse of power. So we are in a time period when abuse of power is pervasive. When abuse of power is pervasive and the abuses of power were described in wage theft at Walmart, earnings manipulation at GE, production quality issues at Tesla, high pressure environments, finance, silicon Valley are pervasive also correlate with sexual harassment, and sexual harassment is ugly. You can get a CEO fired because of sexual harassment and sexual harassment is ugly. You can get a CEO fired because of sexual harassment allegations, and they don't tend to be one-offs. So when women start coming forward with ugly allegations that people can recognize as wrong as opposed to accounting manipulations where even my friends on the ACLU board tell me everybody does it when you come across the abuse of power, claims are the ones that have traction. 

58:24

The lawyers we talked to talked about not just bringing the suit with hope you'll win and try it. They talked about trying cases in the press, that the most effective cases embarrass companies. I think what is going to happen. You know we're seeing a worldwide opprobrium dumped on Elon Musk worldwide opprobrium dumped on Elon Musk. When you start looking, you find out there. You know Elon Musk has been found to have committed securities fraud by the SEC. He won his most and subjected to a personal $20 million fine, which he viewed as a slap in the wrist. He lost his most recent private suit. 

59:09

But one of the things that happens and you see it in the Me Too movement the early women who brought the cases often lost. Juries didn't believe them or they thought it was trivial. Women win those cases now and they win those cases even when they're not so serious. I mean it's absolutely striking that in the civil trial with E Jean Carroll and Donald Trump, these are allegations of 20 years ago. There are a lot of things about it kind of case that women didn't win historically and she did win, and one of the reasons is that the public recognizes the pattern. So when you start making the abuses visible and when they connect to things in people's lives where they now see it. So I think, sexual harassment you can now win a sexual harassment case, but you can also embarrass the CEO. The CEO at McDonald's you know big, prestigious company had to resign because of what were relatively mild allegations of, you know, sexting with a subordinate, but when he lied to the board they clawed back several hundred million in bonuses that had been paid to him. 

01:00:30

That has an impact, and so I think redrawing lines of what's acceptable and what isn't acceptable is a collective project

Naomi

01:00:41

but on an individual level, for people who may not be as courageous as you've been to stand up like that, there is power in community. 

01:00:53

So it can take a while to find people around you whom you trust. 

01:00:58

But talking to people around you, talking to people who are facing, who have the same boss, who are in the same work environment, building a community where you are, can hopefully strengthen how individuals feel about actually speaking up, because they know that they are speaking on behalf of others as well as on behalf of themselves and they know that they have support. 

01:01:23

Individuals can find mentors, and mentors can give really good advice about how to speak up, the best way to speak up, with whom one should speak. But finding community, if people know that if they speak up, there will be people, other workers, other members of their community silently or hopefully not silently cheering them on. I think that can be helpful. But the first thing is figuring out what's going on in a workplace or in an environment or a policy that needs to be changed and then finding others who feel similarly and drawing courage, drawing strength from the others who are experiencing exactly the same thing. Because, yes, it's a prisoner's dilemma If you don't speak up, if you don't stick together, you lose, and so it's important to stick together. 

Senthil

01:02:28

It's very valuable. Well, I know we are out of time. I'll ask one last question. We ask a set of questions to all our guests, but in the interest of time I'm going to merge two questions and I ask you as one what are one or two essential skills required for business leaders according to your work? And also, could you recommend one book for all of our listeners that they must read? Could be on anything. Maybe we'll start with June and go to Naomi. 

June

01:02:57

I have to think about the books although there are many. I like, I think, honesty. I think we have to bring back honesty. Almost everything in our book that leads to lots of problems is about dishonesty, and when you have an ethic of honesty, women do quite well. You know you were asking about the inspiring stories. 

01:03:23

One of the things I found inspiring is when interest rates skyrocketed, Silicon Valley went through a downturn. Something like 78% of startups failed in 2023. But women-run startups did that. Why? Because the women didn't pay themselves as much. They didn't burn through cash as frivolously. They tended to be more honest about whether they were making money and uh. 

01:03:51

And I see certain areas where honesty matters, and one of them that I care deeply about is biotechnology as opposed to info technology. There are these advances in uh reproduction. You know people studying how to make ivf more effective, things like that and the firms that are making impressive but incremental steps, going through clinical trials with the FDA as opposed to circumventing the FDA, announcing what they're doing and showing results. Those companies are doing better in the current environment and they're often women-led. That's where I find it inspirational is if you look at companies where you have some degree of honesty and some degree of looking out for your employees as opposed to seeing how you can exploit them. Those companies tend to do better and I am very optimistic that if you can't win by cheating, that women will do just fine. 

Naomi

01:04:56

It's nice we each get two, at least two, but certainly I mean, in addition to honesty and transparency, as June has said, an ability to communicate, an ability to be able to reach out to people with whom you're working, and that implies an openness, an openness to learning, an openness to change, an openness to new developments, an openness to hearing what other people say, as well as being able to think strategically to pull it all together. But communication, transparency and honesty, openness and then being able to think critically and strategically seem to be very important, and a combination of what we traditionally think of as masculine and feminine values In terms of a book one book that's very hard. I've already mentioned Cordelia Fine's book. I will have to think about another book that would bring this all together. 

June

01:06:11

And I now have one. My colleague Jill Hasday has a new book just came out We the Men, and it describes how, over the course of history, even when women have accomplished great things like the right to vote, the men took charge. She took credit and said you see, we now have the right to vote, we don't have to worry about equal rights. That was in 1920 or so, and she shows the recurring patterns through history of you know, two steps forward, one step back, and women at the center of the fight, being discounted as men have granted, have been the source of the grant and extension of all rights. 

Senthil

01:06:59

May I tell you it's such a pleasure to read your work and know more about the scholarly things you're advancing and get the opportunity to talk to you both, and I also want to tell you, working with grassroots communities in many parts of the world the work you are doing is one of the most important things the world needs in our time, so I'm very, very grateful and I want to express my thanks for the important work you both are doing and that I think manifested in this great book Fair Shake. 

01:07:31

Thank you so much and thanks for joining me today. 

June

01:07:35

Thank you. 

Naomi

01:07:36

Our pleasure, and we're so in awe of all the work you're doing. 

June

01:07:40

Yes

Senthil

01:07:43

Thank you so much for tuning and listening to our podcast today. When you get a chance, please do not forget to leave a rating and review of this podcast and feel free to write to me if you have any thoughts or comments or what kind of episodes you'd love to hear in the future. Thank you so much. 

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