Stories | July 21, 2016

Equal pay – are the odds in your favour?

Men get paid the same as women in figure skating and gymnastics but why are women paid considerably less in sports such as football, cricket or golf?

Novak Djokovic, one of the world’s top tennis players, landed himself in hot water in early 2016 when he said male tennis players should earn more money because their matches sell more tickets.

But the argument that people are just less interested in women’s sport as a basis of unequal pay does not hold: the final match of the women’s football World Cup in 2015 attracted a record-breaking 23 million viewers, the biggest American television audience for a football game ever. 

In fact, a BBC survey in 2014 found that, of 35 sports awarding prize money, 25 pay men and women the same amount. These include tennis, athletics and swimming. Football, cricket and golf are among the 10 that do not.

Is this huge disparity because women’s athletic performances have to be equivalent to men’s to be considered remarkable? Or is it simply because sport and physical activity have been historically considered to be a male preserve? The answer may lie somewhere in between.

Even Maria Sharapova, who in 2015 was the highest paid woman in sports for the 11th year running and banked $29.7m, earned nowhere near as much as the professional boxer Floyd Mayweather, the highest-paid male athlete at $300m.

All that glitters
One possible explanation is that our views are swayed by information that is eye-catching or salient. People are likely to focus on information that is prominent – hence the focus on male super-athletes’ astronomical pay. This bias not only makes us needlessly envious but also contributes to poor decision-making as we end up making choices on attractive first impressions. 

What you see is what you get
The lack of attendance, media coverage and sponsorships in women’s sport are like the chicken or the egg problem. Viewers want to watch sports at the highest professional standard and sponsors want to be associated with the best athletes. But the UK’s Women’s Sport and Fitness Foundation (WSFF) reports that in 2013 women’s sports received only 7% of coverage and 0.4% of the commercial sponsorships. 

Battle it out
Part of the reason that sportsmen are paid so much more than sportswomen lies in tournament theory. Economists say that when workers are paid on relative ranking rather than absolute levels of performance, their wages are set by essentially pitting them against each other, like in a tournament. This is probably why the World Cup 2015 winning women’s US football team took home just $2 million, whereas the German men’s World Cup winners were showered with a cool $35 million. And even the highest paying female footballer is paid much less than the average male footballer. 

Negotiate a better deal
However, the psychology literature shows that men and women have different approaches when contending in a competitive environment and negotiating pay. Not only do women tend to be less confident about their relative ability than men, they shy away from wage negotiations, are more risk-averse in a tournament (as payment levels are not guaranteed), and don’t perform as well as men when competitive pressures increase. This is true both in the workplace and at school. These differences in willingness to compete emerge very early on in life, contributing to persistent gender pay gaps in the workforce. 

Fair game
The one notable exception to the pay gap in women’s sports is tennis. Since 2007, all four Grand Slam tournaments give equal prize money to men and women. However, even the income of Maria Sharapova, who in 2015 was the highest paid woman in sports on the Forbes list for the 11th year running and banked $29.7 million, came nowhere near the highest-paid male athlete. Professional boxer Floyd Mayweather made $300 million in 2015: a whopping $270.3 million, more than the top 10 women athletes made combined.

Work to be done
Harvard behavioural economics professor Iris Bohnet writes in her book What Works: Gender Equality by Design that we all have an unconscious gender bias even though our rational selves may very well be gender-neutral.

So we can continue to express our dissatisfaction at not being paid equally. This isn’t exactly fair but, as behavioural economics shows us, sometimes this inequity aversion with a fixation on fairness can be disadvantageous and leave everyone worse off.

Sometimes we just need to see what’s possible and many times that is continuing to choose to compete, not shying away from competition. And negotiating when you can to close the pay gap.

Are you an hard bargainer or do you dread negotiating? Send us your views or questions.

eZonomics team
.(JavaScript must be enabled to view this email address)