When the risk of workplace sexual harassment is high, companies pay bigger salaries, a new study shows. And that may just be because it's cheaper to give a bump in pay than it is to banish bad behavior.
Just as employers dole out bigger paychecks to workers in jobs that come with a risk for injury and fatality, many are now paying more when the risk for sexual harassment is high, says the study's author Joni Hersch, a professor of law and economics at Vanderbilt University.
And it turns out this strategy might actually work. Hersch cites an example of a female mining engineer who chose to put up with sexual harassment rather than take a lower paying job with better working conditions. “She could have had a nicer job, but she likes the higher pay,” Hersch said.
For the new study Hersch calculated the risks of sexual harassment by industry, age group and sex by scrutinizing claims filed with the Equal Employment Opportunity Commission. Her study was published in the American Economic Review.
When she combined that data with information on pay, Hersch came up with some intriguing results. For example, she found that while women were six times as likely to be harassed as their male counterparts, men were getting far more relief in their paychecks.
Echoing the disparity between male and female incomes, the payoff for putting up with harassment was an extra 50 cents an hour for men and an extra 25 cents an hour for women.
Mining and construction had the most EEOC complaints by women. Interestingly, mining also turned out to be bad news for men, scoring the second highest, right behind the information industry, when it came to EEOC complaints.
For the most part, the worst places for women to work were those dominated by men. An exception is the leisure and hospitality category, which includes the restaurant industry.
Leisure and hospitality employees an almost equal number of men and women. But women still bore the brunt of harassment with 7 times as many claims to the EEOC as men.
And when Hersch looked specifically at food services, she found that the rate of harassment among women aged 25 to 44 was second only to that experienced by women working in mining.
Perhaps not surprisingly the rate went down with age.
With the economy still in the tank, Hersch expects companies are going to continue to be able to buy their way out of the problem for quite some time.
“With over 9 percent unemployment for the last four years, it’s not likely to change,” she said. “At a time of such high unemployment people are reluctant to leave their jobs and or to file a complaint.”