Seattle Dollars: Ever heard of the Female Founder Effect?

Seattle’s a progressive town. It has the highest minimum wage in the country and it was one of the first major cities to pass paid sick days legislation.

And yet, Seattle is in line with national trends that show that as women workers become more educated, the gender wage gap widens.

Just take a look at this graph for Seattle wages by gender from 2005 to 2015:

Image courtesy of seattle.gov


In 2015, women earned 83 percent of what men earned, according to a Pew Research Center analysis. In other words, it would take an extra 44 days of work for women to earn what men did in 2015.

There are a bunch of hypotheses around why this gap exists: our abysmal family leave policies, a lack of strong enforcement around the Equal Pay Act, and not enough affordable childcare options. Then there are other hypotheses that focus on behavior: women having to walk the fine line of being likable but not overly aggressive when negotiating their salaries; women being afraid to talk openly about what they make for fear of retaliation or of being “rude.” And of course, flat-out gender discrimination.

Ruchika Tulshyan, a journalist and author of “The Diversity Advantage: Fixing Gender Inequality In The Workplace,” found similar patterns when looking specifically at Seattle startups. She and her co-author Martha Burwell recently released the first-ever comprehensive study on gender and entrepreneurship in Seattle.

They found that while Seattle women are more highly educated, have more work experience, and are older than men who work in startups, they are paid at least 10 percent less.

They also found a 15 percent gap based on race.

“We saw a real mismatch between the rhetoric of ‘we’re liberal and progressive, startups are meritocratic, anyone can start a company as long as you have a good idea,’ and what we’ve heard from women and people of color,” Ruchika said.

One proven solution to this? More companies led by female founders or women in leadership positions.

Ruchika said they found that women, people of color and parents of all genders were more likely to work at a startup with more women on the founding team.

This data point in particular stands out: “People of color of all genders were twice as likely as white respondents to work at startups with at least 50% women on the founding team,” the report says.

And this, Ruchika says, is called the female founder effect.

Think the rich and famous are immune to the gender pay gap? Think again. Wealthsimple digs into the economics of being a woman in Hollywood and finds that the pay gap, if you’re an actress, is even greater than if you’re a highway maintenance worker. You can read more about that here and then check out Wealthsimple’s one-stop-shop investing platform for all your investing needs. The first $5,000 you invest is managed for free for the first year, and you have on-demand access to their team of expert financial advisors for any questions.

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By The New Tropic Creative Studio
The WhereBy.Us Creative Studio helps clients big and small engage locals, through campaigns that use creative marketing, storytelling, events, and activations to build community, conversation, and impact.