Gender pay disparities, women in leadership and women-owned businesses worse in Iowa than many other states

Gender pay disparities, women in leadership and women-owned businesses worse in Iowa than many other states

November 2, 2017 | 11:59 am
Alissa Gardner, owner of URealty, Meegan Hofmeister and Emily Carlson, founder and creative director of Written Apparel, meet at Caucho in Cedar Rapids on Wednesday, Sept. 13, 2017. Meegan Hofmeister started Dostal House as a co-working and retail space for women entrepreneurs. Members meet regularly to talk through the ups and downs of owning a business, and they help each other find resources when needed. (Rebecca F. Miller/The Gazette)
Chapter 1:

Why is Iowa bad for working women?

Working at Best Buy, a world of jumbo flat screens, GPS devices, game systems and computers, Meegan Hofmeister was the only woman on the sales floor.

“A lot of the male customers doubted I could understand electronics,” said Hofmeister, 32, of Cedar Rapids. “One day, I was literally asked to find another sales person.”

Instead of complaining about sexism, Hofmeister laughed it off.

“I knew I was good at sales,” she recalled. “It made me more determined to prove them wrong.”

Iowa women have been proving themselves in the workplace for decades. But they still face challenges including one of the nation’s largest gender pay gaps, few women leading Corridor companies and near worst-in-the-nation status for women-owned businesses.

So why is Iowa so bad for working women?

Amber Dunlap (right) and Tiffany Lipp (left), co-owners of Sol Sisters, talk with other Dostal House members during a meeting at Caucho in Cedar Rapids on Wednesday, Sept. 13, 2017. Meegan Hofmeister started Dostal House as a co-working and retail space for women entrepreneurs. Members meet regularly to talk through the ups and downs of owning a business, and they help each other find resources when needed. (Rebecca F. Miller/The Gazette)
Chapter 2:

Gender Pay Gap

Only 15 states have a larger pay gap than Iowa — where median earnings of full-time, year-round female workers in 2015 were 77 percent of male earnings, according to an American Association of University Women review of U.S. Census data. Iowa is not only below the national average, but behind Midwestern states that include Minnesota, Illinois, Nebraska and Wisconsin.

Even when men and women are performing similar jobs in upper management, Iowa women make less money.

Among nine Iowa companies that responded to an October 2016 survey by Iowa Women Lead Change (IWLC), women who were executive/senior level managers made an average $113,444 a year compared to $135,571 for men.

Median earnings by gender and educational attainment in Iowa

Data collected from individuals at least 25 years old with earnings in the past year and does not account for discrepancies that may arise as a result of working part-time or full-time, among other factors. Source: U.S. Census Bureau

Rilyn Eischens / The Gazette

“That does not surprise me,” said Tiffany O’Donnell, 48, chief executive officer for IWLC, the Cedar Rapids-based not-for-profit that promotes women’s leadership. “Women are not always negotiating for the best salaries.”

O’Donnell, who spent 25 years as a reporter and anchor at Iowa television stations, including CBS2/Fox 28 in Cedar Rapids, remembers the shock she felt when a male colleague departing the profession told her how much money he was making.

“Despite being at the station longer, and possibly having better name recognition, I was compensated significantly less,” she recalled.

Iowa is among 35 states without a pay-transparency law prohibiting private employers from requiring employees to keep quiet about their salaries, according to the U.S. Department of Labor. This means private employers can fire or discipline employees for disclosing their salaries, which equal-pay advocates say perpetuates the gender pay gap.

Men and women starting their careers today often do so at comparable salaries, said Mary Noonan, a University of Iowa associate sociology professor who studies gender pay disparities. But for women who start families, the pay gap can become a chasm.

“The wage gap now is predominantly a motherhood penalty,” Noonan said.

A maternity leave of six to 10 weeks likely won’t hurt a woman’s long-term earning potential, Noonan said. But “when it turns into six months, unpaid, she will have a hard time finding another job.”

“It could be her employer looks at her as someone who might be slowing down at the job,” Noonan added.

Iowa’s agricultural heritage may be one reason for Iowa’s larger-than-average gender pay gap.

Only 14 percent of America’s 2.1 million farms in 2012 were run by women, according to the most recent U.S. Department of Agriculture Farm Census. An even smaller share — 12.5 percent — of Iowa farms had female principal operators.

Male farm ownership spurs Iowa’s relatively high share of women in the workforce, said Colin Gordon a UI history professor and research consultant with the Iowa Policy Project.
“The predominance of agriculture tends to drive up women in the labor force because women are looking for jobs that provide health insurance,” Gordon said.

Those flexible jobs with good benefits sought by farm wives may be as teachers, public workers or nurses — often lower-paying professions.

Gordon said Iowa’s gender pay gap is worse than some of our Midwestern neighbors because Iowa has a larger share of rural communities with low median salaries for female-dominated professions. New limits to collective bargaining passed by the Iowa Legislature may further reduce teachers’ and nurses’ opportunities to raise wages, he added.

Jennifer Daly president and CEO of Iowa's Creative Corridor Economic Development Corp. at the Cedar Rapids Metro Economic Alliance office in southeast Cedar Rapids, Iowa, on Friday, August 25, 2017. (Jim Slosiarek/The Gazette)
Chapter 3:

Women in Business Leadership

Of the 25 largest employers in the Corridor or their parent companies, only three had female chief executive officers, a Gazette review showed. Those three include Alliant Energy and Quaker Oats, both of which have parent companies led by women, and not-for-profit Four Oaks.

The gap extends outside of the seven-county Corridor.

Only about six percent of Iowa’s private, for-profit companies had women in CEO roles, which is similar to the national level, according to a 2014 IWLC report. Meanwhile, between 22 percent and 25 percent of for-profit companies statewide had women in executive roles, and only 16 percent of public company board members were women.

“It’s very rare to sit down with a CEO who’s a woman,” said Jennifer Daly, 45, president and CEO of Iowa’s Creative Corridor Development Corp.

By comparison, half the executives for not-for-profit entities were women, the report found.

Membership for the Iowa Business Council, which represents the state’s largest employers, is almost entirely devoid of women. Of the 25 members — top business executives, the three Regent university heads and the president of the Iowa Bankers Association — only two are women.
The gap can mean female leaders almost always are surrounded by professional peers who are men. That was the situation when Debi Durham, now 57, interviewed for her first economic development job in Oklahoma in the mid-1980s.

“It was interesting, I have to tell you, I was interviewed by a room full of men — there were very few women, if any on the board at the time — and one person even questioned my ability, quite frankly, because I was young and I was female,” said Durham, director of the Iowa Economic Development Authority.

Durham said it meant she would have to make her voice be heard.

“(I was) always making sure I had a seat at the table, and sometimes I forced myself around the table. You have to be assertive,” Durham said.

Daly, who started her economic development career in Iowa and then Illinois, faced similar dynamics. At her last position in Peoria. Daly experienced the first instance where she felt excluded because of her gender and she had to try to break into a “good old boys” network.

“That was probably the first time I felt it in a big way and that it became something where I really had to think about ‘How do I change that?’” Daly said.
The issue was fixed, Daly said, through “a lot of conversations.”

“You have to be able to carefully call people out on things, without damaging relationships,” she said.

Lynette Marshall, president and CEO of the University of Iowa Foundation since 2006, didn’t seek out an all-female executive suite. But as she worked with talented women and men in fundraising and university advancement, she picked women for three of four senior leadership positions as well as board chair.

 

“People best prepared for those jobs at that time were women,” said Marshall, 56. “I’m probably not completely cognizant of the fact that, for me, it does not seem odd to promote a woman.”

University advancement has grown quickly as a profession in the past 25 years and women have taken advantage of the boom, Marshall said. But while the field is largely female, few women are in top leadership. Of the 14 leaders of Big Ten university foundations, only five are women, she said.

Income and gender in Iowa

Roll over the bars to learn more about what percent of female and male Iowans who worked year-round, full-time in 2015 belonged to each income bracket.

Source: U.S. Census Bureau

Rilyn Eischens / The Gazette

Having women in leadership roles is vital not only to ensure a diverse group of ideas and talent, but so young girls will realize those positions are open to them, Daly and Durham agreed.

“You only know what you know. If your whole life, the only adult women you ever see are not in high-level professional roles, then that shapes how a kid sees things,” Daly said.

When Daly went to visit the White House during the 2016 election, she told her daughter that two women were running for president from major parties. If one of them won, Daly said, the country would have its first female president.

“And she looked at me and she’s like, ‘What? There’s never been a woman president?’” Daly said. “In her world, that would never occur to her.”

The success of Bug Soother caught Freda Sojka, founder of Simply Soothing, by surprise. (Liz Martin/The Gazette)
Chapter 4:

Women-Owned Businesses

Women majority-owned companies made up 36 percent all businesses across the country, and businesses co-owned by men and women reached nine percent in 2016, according to a 2016 report from the Iowa Small Business Development Center.

In a state where 97 percent of companies are classified as small businesses — anything fewer than 500 employees — 33 percent of Iowa’s were female-owned while 13 percent were equally male and female owned, the SBDC report shows.

Iowa consistently has ranked near the bottom nationwide for the proliferation of female-owned businesses.

The number of women-owned businesses in Iowa grew 25.9 percent from 1997 to 2015, which gave the state a rank of 49th among 50 states and the District of Columbia. Nationwide, the number of women-owned businesses increased 74 percent during that period, according to the 2015 American Express Open study based on U.S. Census data.

However, Iowa jumped in its nationwide rank in American Express Open’s 2016 report, to 30th nationwide. The study, which compared trends since the 2007 recession, stated Iowa had a 30.7 percent increase in the number of women-owned businesses during that period.

Median annual earnings by industry in gender in Iowa

Roll over the chart to learn more about pay by gender and industry for full-time, year-round workers in Iowa.

Source: U.S. Census Bureau

Rilyn Eischens / The Gazette

Lisa Shimkat, 46, state director for the Iowa SBDC, pointed out that the data used in the 2015 study only counted businesses with employees, excluding the Iowa small businesses owners that do not have paid staff.

Still, Shimkat said the study was “a wake-up call.”

 

“What I’m finding now is that there are a lot more resources out there, but we’re not getting to word out there about those resources,” Shimkat said.

Just as Iowa’s agriculture industry may affect the gender pay gap, it may keep women away from start-ups. Farm operations are variable, depending on the weather, crop prices and other factors. If men are running more than 85 percent of Iowa’s farms, their wives may be less likely to take on the risk of starting their own businesses.

Not only that, but financial hurdles often face women looking to open a business, particularly when it comes to their credit history, Shimkat said.

“It’s a big risk from a financial perspective,” said Meegan Hofmeister, a former Best Buy employee and now founder of the Dostal House, a women-only co-working space in Cedar Rapids’s New Bohemia district. “You’re relying on that to be successful to support yourself.”

 

After a failed business venture, Hofmeister opened the Dostal House earlier this year to offer a support group for female business owners. Dostal House, 1000 Third St. SE, in Cedar Rapids’s New Bohemian District, has space for retail and a salon on the main floor with work space for female entrepreneurs upstairs.

“We’re all women on our own missions,” she said. But “if one of us is struggling, we can pick each other’s brains. It keeps us all moving forward.”

For Freda Sojka, opening her own business was a way to get away from the attitudes she said she experienced while working at a company in Muscatine for more than 20 years. (See sidebar.)

She founded Simply Soothing, a company in Columbus Junction known for its Bug Soother product, about 15 years ago.

“There’s subtle ways women are kept out, but I don’t see it here,” Sojka said. “I don’t see any difference in dealing with a man or woman buyer — it’s all about the product. I can’t even think of a time if I was ask if (my business) was women-owned or not.”
The key to increasing the number of female business owners in the state, Shimkat said, is encouraging current owners to have a succession plan once they retire. According to data from the U.S. Census Bureau and a 2015 survey, the majority of self-employed individuals in Iowa are between the ages of 51 and 60.

This offers an opportunity to target females looking to start a new career in the entrepreneurial world, Shimkat said.

Emily Carlson, founder and creative director of Written Apparel, talks with other business owners during a meeting at Caucho in Cedar Rapids on Wednesday, Sept. 13, 2017. Meegan Hofmeister started Dostal House as a co-working and retail space for women entrepreneurs. Members meet regularly to talk through the ups and downs of owning a business, and they help each other find resources when needed. (Rebecca F. Miller/The Gazette)
Chapter 5:

Solutions

Even though data shows Iowa has a ways to go for women in business, female leaders said change is happening.

Daly pointed to girl- and women-centric organizations focused on leadership development. And IEDA’s Durham said her department recently revamped Iowa’s Targeted Small Business program, which supports businesses run by women and minorities. She also cited FIN Capital, an female investor group in Des Moines, as an example of progress.

Initiatives such as the EPIC Corporate Challenge, in which companies commit to boosting women leaders, also will help, even if it just by exposing the problem.

“For there to be substantive change, it must be meaningful and measured,” said Diane Ramsey, founder of IWLC and co-chair of the challenge.

Median weekly earnings by gender, 2015

Explore the map below to see how men's and women's weekly earnings compare in Midwestern states, based on 2015 annual averages for wage and salary workers.

Iowa companies and the state can do more to aid women who may take time off work to raise a family, women said. Flexible benefits — such as paid family leave — would help working mothers as well as fathers.

Joining states that include California, Colorado, Illinois, Louisiana and Michigan with pay-transparency laws would give Iowans the freedom to compare salaries without fear of being fired. Women also need help learning how to negotiate for higher pay.

“When somebody wants you for a position, that’s your best opportunity,” Daly said. “If you miss that opportunity, then overall your wages will be lower.”

Ramsey encourages women to speak up for what they want.

“There are great opportunities and we should go after them,” she said.

All content copyright 2016, Gazette Communications, 500 Third Avenue SE, Cedar Rapids, Iowa 52401. Read more about us or e-mail us.