In his latest post on the Data+Science blog, Jeff Shaffer called out the major news organizations for mis-reporting the details of a story on the Australian Gender Pay Gap. With permission, the post appears below:
“Breaking News: Senior executives are paid more than junior positions”
It was just about a year ago that Steve Wexler and I wrote a blog post on a very similar topic. Back in January 2017, we wrote about the analysis that was done in a great many of the Makeover Monday visualizations on the Australian Gender Pay Gap. You can read more about that here. Yesterday, I saw a number of trending notifications for Barclays that caught my attention and I wondered what was going on. When I searched Barclays, I quickly started to see Tweets and news articles such as the ones below.
Just like the Australian gender pay data that we wrote about last year, these headlines are comparing averages. At least Bloomberg and CNBC used the word “average”. And buried in some of these articles is the important point
“The disparity in Barclays’s gender pay is exacerbated by a disproportionate number of men in senior positions at the bank.” – Bloomberg
“Barclays said that it paid men and women in the same roles equally.” – BBC
The problem with these headlines is that without taking into account the distribution of the data, it masks the real issue at hand.
You may recall the image from that last post outlining the dangers of using averages.
The danger of using averages from Why Not to Trust Statistics.
Here is another example from Ben Jones that compares the salaries of Seattle Seahawks football players.
This is exactly what is going on at Barclays. The headlines for many of these news articles are simply incorrect. For example, the MSN headline reads “Barclays pays female investment bankers half that of male peers.” A peer is generally regarded as someone who is the same age, status, rank, and ability. Someone reading these headlines would quickly assume that Barclays is paying men much more than women who are in the same role and that is incorrect.
I don’t know how this happens. One news organization gets it wrong and then others jump on board with a more sensational headline. This may be out of ignorance, people not reading the Barclays report or it could be that they are trying to sensationalize the issue. The problem is that it’s wrong. These news organizations, these headlines and some on social media are spreading misinformation.
Barclays wrote up an excellent report that outlines the issue. This is NOT an issue of men being paid more than women for the same job. The underlying problem, which Barclays clearly states in their report, is that there are more women in junior level roles and more men in senior-level roles. In fact, they use some great data visualizations to explain what’s going on in the data.
The chart below shows the count of employees in Senior Management, Middle Management and Junior Staff. Notice that at the Senior Level of the organization there are very few women, and in Middle Management, there is nearly double the number of men vs. women. On the other end of the organization, women dominate the Junior Staff, with nearly double the number of women in those junior roles vs. men.
To highlight this further, one way for Barclays to “solve” this gender pay gap is to actually discriminate against women and only hire men in the lower paying jobs. Then this gap would go down, but that certainly wouldn’t be a desired outcome.
It’s easy to understand why there is such a large gap in the wage when explained in this manner. This particular issue at Barclays has nothing to do with unequal pay. Rather, it has to do with the fact that there are not enough women in the senior and middle management roles. Barclays identified this as an issue and wrote that they are committed to working to improve this. Rather than focusing on the wage gap, we should be monitoring the number of senior and middle managers. Middle managers likely have an opportunity to advance into senior management roles, so this would be a good area to monitor carefully. For example, they should observe the number of men and women in middle management over time to see if there is a positive trend in this segment of the employee base. Then efforts could be made to support those women and their development plans.
Barclays CEO, Jes Staley, understands the heart of the issue. He said, “Although female representation is growing at Barclays, we still have high proportions of women in more junior, lower paid roles and high proportions of men in senior, highly paid roles.”
It seems RBS, and probably many other companies, is facing the same issue. Bloomberg reported this morning, “RBS’s Female Staff Paid 37% Less on Average Than Men”. At least they slipped in the word “average” and this article also spells out the real issue much more in detail.
“Men make up about 70 percent of the employees in RBS highest-paid quartile, mirroring the proportion of women in the bank’s lowest-paid quartile.”
The Chair of the Treasury Committee in the UK said, “One way of reducing the gender pay gap is to increase the proportion of women in more senior roles, so it appears that Barclays is on the right track.” This is the key takeaway and a major issue that needs to be addressed, not just in the financial services industry, but in the field of data analytics and many other fields. I’ll discuss this more in an upcoming blog post that is already in the works.
The major news organizations should know better than to publish false or misleading headlines. That may be an unrealistic goal these days, but if you are reading this far then I hope I can at least impart this bit of wisdom to you. Everyone makes mistakes, but I challenge you to think critically about your data analysis, question the data and don’t spread misinformation.
Jeffrey A. Shaffer
Follow on Twitter @HighVizAbility