Introduction

In March of 1995, the Federal Glass Ceiling Commission released a report on the status of diversity in corporate America, Good For Business: Making Full Use of the Nation's Human Capital. It claims, "Only five percent of senior managers at Fortune 1000 companies are women." This finding, like the 72 cents wage gap complaint, has become a rallying cry for advocates of gender-based preference policies.

The Facts About the Figures

The five percent figure demonstrates a refusal to compare apples to apples. The glass ceiling complaint is based on the difference between women's participation rates in the labor force, and their representation at the highest levels of Fortune 500 management, about five percent. The problem with this logic lies with the point of comparison which should use the qualified labor pool, not the general labor pool.

If women constitute only five percent of the labor pool with the qualifications for corporate senior managers -- typically an MBA and 25 years in the labor force -- we would expect women to number approximately five percent of senior managers. Figures regarding senior management in Fortune 1000 companies are meaningless until we know the gender composition of the qualified labor pool.

Often overlooked are women's threefold increase in corporate senior management positions from the mid-1980s when women held about 1.5 percent of these positions. Furthermore, the five percent figure used so liberally is outdated. Catalyst, a women's research institute in New York, estimates the senior manager figure to be closer to seven percent, and a Korn/Ferry study found that women executive vice-presidents in the Fortune 1000 industrials and the Fortune 500 service companies account for nine percent of total management.¹

Should current trends continue, women could reasonably expect to have as much as fifteen percent of senior corporate posts in these elite corporations within ten years.² In 1993, as a point of reference, women represented forty-six percent of the nation's labor force and held forty-two percent of all management jobs.³

Measuring Choice

Women's lifestyle choices directly impact their role in the market place. Education and time spent in the workforce provide two measures of a candidate's market value. Historically, more women have pursued degrees in lower-yield fields of study than their male cohorts, while they also accumulate less continuous time in the workforce. In addition, women have higher turnover rates than men. Each of these factors bears directly on career position and compensation levels.

A 1984 U.S. Bureau of the Census study found that while only 1.6 percent of a man's work years were spent away from work, 14.7 percent of a woman's work years were spent away from work -- an eightfold difference.⁴

This prompted the U.S. Department of Labor (DOL) to conclude "women spend significantly more time away from work and are apparently unable to build the seniority that men achieve."⁵ The DOL also noted "turnover data for women and men have shown higher rates for women than for men."⁶

In 1992, a U.S. Bureau of the Census study on the connection between education level and earnings again found that at every education level "men have more months with work activity than do women."⁷

How do women shatter the "glass ceiling"? By making career-oriented decisions about education and time investments, a shift that has already taken place and the results of which are evident in women's market success today.

• The proportion of women college graduates receiving bachelor's degrees in education declined from 36 percent in 1971 to 14 percent in 1985, while the proportion of women graduates receiving degrees in business and management rose from 3 percent to 21 percent over the same period.⁸
• In 1992, the largest category of bachelor's degrees earned by women was business, at 20 percent, which bodes well for the future of women in the market.⁹
• As for graduate school and professional study, Figure I illustrates the steady rise in the number of professional degrees earned by women.

Finally, their presence in Fortune 1000 companies is not an accurate representation of women's success in the business world; in fact, women are starting businesses in droves and are increasingly responsible for keeping America's entrepreneurial spirit alive. According to a recent study conducted by the National Foundation for Women Business Owners and Dun & Bradstreet Information Services:

• Today there are 7.7 million women-owned businesses in the U.S. generating nearly $1.4 trillion in sales.
• Women-owned businesses employ 15.5 million people in the U.S. alone, 35 percent more people than the Fortune 500 companies worldwide.
• From 1991 to 1994, the rate of employment growth for women-owned businesses was 118 percent higher than the national average. Employment grew by 11.6 percent among commercially active U.S. women-owned firms over that period, compared to the national average of 5.3 percent growth.

Conclusion

The glass ceiling, a close relative of the pay-gap myth, bears a striking resemblance to the statistical manipulation and inferred generalizations of its ancestor. It would be disingenuous to suggest that discrimination no longer exists; but discrimination is illegal, and abuses of the laws should meet with swift justice. In today's world it is not pervasive and systemic discrimination but a myriad of decisions and considerations -- personal choices -- that determine a person's role in the market place.

1. Leslie Kaufman-Rosen with Claudia Kalb. "Holes in the Glass Ceiling Theory." Newsweek. March 27, 1995, p. 24.
2. U.S. Bureau of Labor Statistics.
3. U.S. Bureau of Labor Statistics.
4. U.S. Bureau of the Census, Current Population Reports, Series P-70, No. 10, "Male-Female Differences in Work Experience, Occupation, and Earnings: 1984," U.S. Government Printing Office, Washington, D.C., 1987.
5. "Facts on Working Women." U.S. Department of Labor, Women's Bureau. No. 93-5, December 1993, p. 8.
6. Ibid.
7. U.S. Department of Commerce, Bureau of the Census, Current Population Reports, Series P-70, No. 32, "What's It Worth? Educational Background and Economic Status: Spring 1990," p. 4.
8. June O'Neill and Solomon Polachek. "Why the Gender Gap in Wages Narrowed in the 1980s." Journal of Labor Economics, vol. 11, no. 1, 1993, p. 224.
9. U.S. Department of Commerce, Bureau of the Census, Current Population Survey, unpublished data in U.S National Center for Education Statistics, Digest of Education Statistics, 1994, table 239.

This fact sheet is based on a Pacific Research Institute briefing by Katherine Post and Michael Lynch titled, "Free Markets, Free Choices: Women in the Workforce."