The Cost of Not Negotiating: How Women Can Earn $1 Million More Over Their Careers
Disclaimer: Good Day, Readers. WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations.
The Impact of Salary Negotiations on Women’s Earnings: The Million Dollar Difference
In 2023, as the father or a daughter, I hoped the gender pay gap was narrowing. In reality, we have work to do.
The National Women’s Law Center shows that in 2020, U.S. women working full-time earned ~0.82 cents per dollar earned by men. This pay gap is even more significant for women of color, with Black women making ~0.61 cents and Latinas ~0.55 cents per dollar earned by white, non-Hispanic men.
Women are less likely to negotiate a salary offer and are more likely to accept lower salaries than men. Society continues to see Women as pushy or aggressive when negotiating their salaries, whereas men are seen as assertive and confident.
The lack of negotiation skills among women has serious long-term consequences. A National Bureau of Economic Research study found that women who do not negotiate their salaries at the start of their careers can earn as much as $1 million less. This disparity in pay is compounded over time, as women receive smaller raises and promotions and are less likely to be considered for senior leadership positions.
One key contributor to the pay gap is the disparity in women’s compensation negotiating skills. This is something YOU can improve!
TO IMPROVE YOUR NEGOTIATING SKILLS:
- Educate yourself about your worth: Before entering a negotiation, research the market rate for your job and the typical salary range for your experience level. This provides a basis for your negotiation.
- Practice your negotiation skills in lower-stakes situations, such as negotiating a discount on a purchase or asking for flexible work hours. Practice with friends and family with more experience negotiating compensation packages.
- Seek out mentors (male and female) who can provide guidance and support and find partners who can help to advocate for you.
RESOURCES
Books:
- “Women Don’t Ask: The High Cost of Avoiding Negotiation—And Positive Strategies for Change” by Linda Babcock and Sara Laschever
- “Ask For It: How Women Can Use the Power of Negotiation to Get What They Want” by Linda Babcock and Sara Laschever
- “Negotiating the Nonnegotiable: How to Resolve Your Most Emotionally Charged Conflicts” by Daniel Shapiro
- “The Confidence Code: The Science and Art of Self-Assurance—What Women Should Know” by Katty Kay and Claire Shipman
YouTube Videos:
- “Negotiating 101: The Art of Negotiating” by Business Insider
- “Negotiating Salaries: Tips for Women” by Forbes
- “How Women Can Negotiate for a Raise” by Harvard Business Review
- “How to Negotiate Your Salary (for Women)” by The Muse
You can also attend workshops, webinars, and training sessions on negotiation skills to help develop the confidence and knowledge to negotiate effectively. The key is to educate yourself and build your skills, so- PRACTICE, PRACTICE, PRACTICE
BE YOURSELF!
Negotiate using your natural skills; you are NOT IRON Mike Tyson! The majority of you outwork and are more innovative than a mere male.
I am still in awe of my mom. She worked a full-time job while raising two disobedient boys. Yes, I was the worse! Kept that home spotless. She reviewed our homework EVERY BLASTED NIGHT and tutored as needed. Mom attended EVERY parent-teacher conference and took notes! She was the best saver of money I have ever seen! Zero men working the same job as my mom deserved more money!
The excellent news – Mom’s granddaughters are just as good! But you best pay them their worth, or they will walk out singing my favorite song, “Take This Job And Shove It.”
CONCLUSION
The majority of my best hires were Women and Moms! I was smart enough to hire and retain them. Ladies – be your authentic self because you earned that compensation package!
Einstein said, “The value of a man resides in what he gives and not in what he is capable of receiving.” The same can be said for compensation negotiation – valuing oneself, and one’s worth and ensuring that this value is reflected in one’s compensation package. Einstein also said, “Try not to become a man of success, but rather try to become a man of value.” This statement highlights the importance of valuing oneself and one’s contributions in any situation, including compensation negotiation. Negotiating your compensation package is not just about asking for more money but ensuring that all elements of the compensation package align with YOUR goals and values.
To improve your negotiating skills and increase your Critical Thinking Competencies: See below series of blogs by Dr. James Leemann.
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ABOUT ME
I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an N.C. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
DISCLAIMER
I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, real estate and am happy to share my finance and investment lessons. I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog as recommendations for your situation. As an investor, you must establish your risk/loss tolerance. Investment in any asset involves risk, including complete loss.
Please seek your licensed CPA or fiduciary financial advisors for individual financial advice.
I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.
