A salary gap exists — Sheryl Sandberg’s made that clear. In 2010, women were earning 77 cents to every dollar men made. A new study from Babson College suggests female entrepreneurs might be perpetuating the problem, however, by actually paying themselves less than their male counterparts.
The report analyzed Goldman Sachs’ 10,000 Small Businesses program, of which Babson has been the key academic partner since it launched in 2009. With the goal of unlocking the growth and job-creation of the country’s potential small businesses, the program has graduated more than 1,500 entrepreneurs — just about half of those women.
Now, the study found that over 63 percent of program participants have increased their revenues and that nearly half are adding new jobs. Although encouraging, the salary findings came as an unexpected, startling surprise.
Entering the Goldman program, female participants paid themselves, on average, 80 percent of the salary of male participants — an unfortunate figure reflective of a broader trend. According to the Institute for Women’s Policy Research, women’s median weekly wages were 81 percent of men’s in 2012.
Babson Professor Patricia Green, an author of the Goldman study, tried to explain the result to the New York Times, admitting she couldn’t explain the disparity:
That wasn’t even a number we were looking for, so when we saw that, we thought, that’s interesting. I’m not sure if it’s benchmarking against salaried women, I’m not sure if it’s a lack of confidence, I’m not sure if it’s negotiating themselves down first. Sometimes women have a tendency to say: “I couldn’t possibly ask that. I’d better recalibrate that before I put that number out there.”
The good news: Six months after graduating from the program, female graduates’ average salary rose to 92 percent of their male counterparts’, reducing the gender gap by 60 percent. The bad news: Not every female entrepreneur goes through the 10,000 Small Businesses program, meaning a self-imposed salary gap still prevails.
A separate study recently published by Babson stated that, in every region, women have “a greater level of fear of failure than men.” Although the research was unclear as to why, Sandberg has previously pointed out that when women succeed, they are often seen as “aggressive” and liked less. Yet, as men gain power, they receive admiration and praise.
In Boston — the 10th Best City for Female Entrepreneurs — the hope is that we’re “Leaning In” hard. After all, more than 75 startups in the Boston-area are led by women, according to the New England Venture Capital Association. To get the Hub to No. 1, however, women need to stand up for themselves, both in their own business and others. And together, men and women need to push back against stereotypes, keep the conversation going and continue to open up opportunities.
As Sandberg said, “We can do this. We can do this is we lean in together.”
Image via Shutterstock