Is ‘Strategic Discrimination’ Happening in Medtech?

Diagnostic

MD+DI recently published the Medtech Salary Survey 2021, an annual feature for which we ask medical device and diagnostic industry professionals detailed questions about their salaries, bonuses, benefits, job satisfaction, job security, and more. In this week’s Medtech Unfiltered video, News Editor Amanda Pedersen talks about one interesting finding that stuck out to her as she reviewed the published report.

Image by Hyejin Kang – Adobe StockMedtech gender gap

In comparing the 2021 findings to past reports, Pedersen noticed that the gender ratio in the medtech industry has improved dramatically over the past five years. The Medtech Salary Survey 2016, for example, showed the ratio of men to women working in the industry to be 4:1. The current report shows the ratio to be 2.3:1. That’s great news for the industry, Pedersen says, as numerous studies have shown the business value of hiring women. However, as the proportion of women in the industry has improved, the pay gap between women and men in the industry has widen. According to our data, the median pay gap between men and women in the industry overall has gone from about $16,400 in 2016 to $45,000 in 2021.

Pedersen reached out to about a dozen academic researchers with expertise in gender economics to pick their brains about what could be behind this trend. While most of these experts noted that difference in experience level could play a large role, they also shared some other interesting theories. One such theory has to do with what one of these researchers (Nancy Folbre, University of Massachusetts Amherst) termed, “strategic discremenation.”

Folbre explained that because women earn less, on average, than men, many employers know that they can offer women lower starting salaries than men with the same credentials.

“I call this ‘strategic discrimination’ — it’s not that they don’t like women workers, they are just trying to minimize costs,” Folbre said. “Once more women enter, then, this puts some downward pressure on the wages of men — because employers set the general starting wage lower, knowing that women, at least, will apply for the job.”

Folbre said this dynamic is more likely to affect men at the lower end of the wage distribution, and they begin to look for jobs elsewhere. The men most likely to stay are those earning higher salaries, she said, such as men with a lot of job tenure and/or in management positions.

This creates a selection effect, she said, where the gender wage gap increases because more low-wage men have left the job, or decided not to enter it, leaving more high-wage men on the job. 

“This selection effect can happen even without strategic discrimination,” Folbre said. “If most of the new job entrants are women, and most of the older, more experienced, and therefore more highly paid workers are men, the gender wage gap will increase. The good news is this effect should dissipate over time as more women move up the ladder. Difficult to say, though, how long this process will take, and it is almost certainly shaped by industry-level trends.”

Medtech Unfiltered streams live on our Facebook page every Wednesday at 11 a.m. Eastern Time.

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