Where Women Are Underpaid and Underrepresented

The media are misleading when they say that WNBA pay, and the number of female Fortune 500 CEOs, are at record highs.

Yes, the players’ pay was up by 53% since 2019 and, at 55, the number of women leading the largest firms exceeded all in the past.

Still, the actual numbers are egregiously tiny.

Underpaid and Underrepresented Women

Gender Pay Gap

In a NY Times column, Nobel economics laureate Claudia Goldin detailed the WNBA numbers. Because the WNBA is partially owned by the NBA, we wind up with a conflict of interest. When the NBA negotiated joint television contracts worth $77 billion over 11 years, it delegated a disproportionate amount to itself. And yet, last year, the TV audience for the women’s championship NCAA game was larger than the men’s.

We can use eyeballs per game as a money metric. Then, we would have a 77 percent allocation of revenue because the typical WNBA game attracted approximately 77 percent of the NBA eyeball average. Similarly, for game attendance, the women have one-quarter of the game’s attendance per player (adjusting for fewer games than the NBA).

Indeed, when we cite the surge in popularity of the women, led by Caitlin Clark, all of the comparisons point to the women receiving more than 1/80th of the average NBA salary.

Gender Leadership Gap

The most recent Fortune 500 CEO list named 55 women. Close to 10 percent, the number is shockingly low. After all, more than half the U.S. population is female and more women than men, aged 25-34, have college degrees.

Sometimes a graphic does a better job of displaying the gap than a slew of stats:

Our Bottom Line: Anchors and References

Behavioral economists tell us that our opinion can depend on an anchor. Defined as where we began, the anchor is the starting number. As a result, it could be $4.00 per gallon of gasoline. Then, prices about $4.00 sound expensive and those below it are cheap. Similarly, judging if our investments are faring well, we look at where the S&P or the Dow have been.

With basketball and CEOs, we can use past pay or past CEO totals as our anchor. Then, when that total rises, the anchor makes us feel like we have made a substantial gain.

Instead, a behavioral economist could also direct us to a reference point. Then, using men’s NBA salaries or male CEOs as our comparison, we see that the women’s numbers are low.

My sources and more: This Claudia Goldin opinion column reminded me that we needed to update our post on WNBA salaries. Then, adding to today’s facts, Axios had the CEO report.