This Is Woman's Work with Nicole Kalil - Fair Shake: Women And The Fight To Build A Just Economy with June Carbone | 246

Episode Date: October 28, 2024

In this episode, we dive into the systems, structures, and practices that are working against us. Because my goal isn’t just that women (and I do mean all women) get a fair shake, but that we expect it. That we require it. Our guest is June Carbone, the Robina chair of law, science, and technology at the University of Minnesota Law School. Previously she served as the Edward A. Smith/Missouri chair of law, the constitution, and society at the University of Missouri at Kansas City; and as the associate dean for professional development and presidential professor of ethics and the common good at Santa Clara University School of Law. Basically, she’s wicked smart and very well-researched. She has just released her new book Fair Shake: Women and the Fight to Build a Just Economy which she co-authored with two other incredible women. My call to action: consider, in addition to what you care most about and what you believe is best, what will move policy and opportunity forward for all women. It’s time for us to think beyond just our own best interests. Buy June’s Book: Fair Shake  https://www.simonandschuster.com/books/Fair-Shake/Naomi-Cahn/9781982115128  Like what you heard? Please rate and review

I am Nicole Kalil, your host of the This Is Woman's Work podcast. And I've shared many, many times the purpose of this podcast is to create a new definition of what it means, what it looks and feels like to be doing woman's work in the world today. And I've been clear that you are the decider for you. But what I don't think I've ever shared is why I started a podcast that features almost exclusively women and covers all sorts of topics that are relevant for all sorts of women. I mean, we run a pretty full gamut here. So here's the reason. In all the coaching and consulting work I was doing before I started this show, I was

most often hired to support the women within an organization, coach women leaders, speak at women's events, run women's workshops and trainings, which I love to do and believe there's value in. But my frustration with always and only ever being asked to do those things is that it was never going to solve the problem in any organization because the problem wasn't women. And the implication when we only get women's events or extra support for the women in an organization is that they are the problem that needs to be solved. What I can say with extreme confidence is that it's not women that need to be fixed. It's leadership, cultures, policies, laws, and systems. And more often than not, when I'd share that with leaders and organizations, that's where everything came to a screeching halt.

In many cases, they were willing to check some boxes, host some events, and delegate the growth, support, and advancement of women, but unwilling to do the harder work themselves. It was important until it made them uncomfortable, and then it wasn't all that important. So I got pissed off, as I often do, and I realized for me that I couldn't keep banging my head against that particular wall and that I needed to focus my energy where I felt like I could make a real difference. Yes, hopefully providing support, resources, and tips and tactics for creating lives and work that lights us up through this podcast, but also by challenging the status quo, pointing out the problems as I see them, and encouraging us all to define success, relationships, independence, motherhood, confidence, and all aspects of woman's work

for ourselves so someone else doesn't get to define it for us. My goal isn't just that women, and I do mean all women, get a fair shake, but that we expect it, that we require it. So on this episode of This is Woman's Work, we're going to dive into some of the systems, structures, and practices that are working against us. Our guest is June Carbone, the Robina Chair of Law, Science, and Technology at the University of Minnesota Law School. She served as the Edwin A. Smith Missouri Chair of Law, the Constitution, and Society at the University of Missouri at Kansas City, and as the Associate Dean for Professional Development and Presidential Professor of Ethics at the Common Good at Santa Clara University School of Law.

Basically, she's wicked smart and very well-researched. She's authored several books and has just released her new book, Fair Shake, Women and the Fight to Build a Just Economy, which she co-authored with two other incredible women. So June, thank you for being our guest. And before I ask my first question, I'm curious your thoughts or reactions on my introduction. Do you feel like issues like the wage gap or harassment in workforce or challenges with getting more women into the upper echelons of corporations are things that we can solve by working with women? or is it about

working with leaders and policy or some combination of both? Oh, I loved your introduction. You know, Simon & Schuster is busy saying our book, this is not a fix the woman book, it's a fix the system book. And if there's an argument we're making, it's that this is a win-win opportunity, that exactly what's wrong with modern workplace is zero-sum thinking, competitive pay. If one person's winning, the other person is losing. We want to go back to an idea that, hey, maybe we would all be better off if we thought about how the whole is stronger than the sum of the parts. Okay, great. So I know one of the things that you cover or kind of bring to the forefront of your book is the triple bind that so many women face. Can you talk to us a little bit about that

as a starting point? Yes. In many of the workplaces we looked at, starting with Walmart and continuing through GE and Wells Fargo, there is a hidden system. What we discovered is many of the women we described hit what they thought was a glass ceiling. What they were really hitting was a secret system. So the triple bind. One, you can't win unless you're playing with the same rules as the men. Two, if you aren't playing by the same rules as the men, women are more likely to lose. What does that mean? Take narcissism. There's this whole literature on the narcissistic boss, the narcissistic CEO. But men who are rated more highly in traits associated with narcissism are also viewed by their subordinates as more effective managers. Women who are rated highly in terms of narcissism are rated as less effective managers. The rules are different. And the third is women who do figure it out, who figure out what the game is really about. Many of them find either they don't want to play on those terms or are pushed out when they can play.

And so that creates a triple bind for women that explains a lot about why you don't see more women in the higher ranks of the economy. It's anecdotal, but it speaks completely to my experience. I observed male leaders screaming at their employees, but there is no way I could get away with something like that or things that were perceived as strategic for me were cold or calculating and I couldn't play the game anymore. It was exhausting and it was just one of the many reasons why I made the decision to go out on my own. So I think that there are many people listening who can relate to that experience. What do we do about it short of leaving? Yeah, well, that's if you want to start.

So let me start at the individual level. And I think when I watch men, including men I admire, walk into a negotiation, what's got to be in the background is, I don't get what I want, I'm out of here. And I think with women, it doesn't have to be quite so cold-blooded, but it does have to be if you see all of the elements of a toxic workplace, you have to be plotting your next move. And one of women's disadvantages is when we look at top female executives, they are more likely to have come up within the ranks of a single company. Men are more likely to have switched. We have a small study in finance. It indicates that when men and women move, the men do better. But the reason they do better, it seems, is if they have a network in place already in the place they're moving to, then they are more likely to succeed. And especially women with children. I mean, one of the things we're seeing is women

are less likely to move when passed over for promotion than men. And you have to be willing to move to climb the ladders of corporate America. But in the peak childbearing years, a woman who has been successful, who has a support network, who has co-workers who value what she does, she can also leave at six o'clock. And with understanding that she's already doing as much work as many of the men, even if she's not putting in fact men are more willing to take jobs with irregular hours that pay more, but they're also more likely to move in today's climate where nurses are in demand. They'll move for a higher, and when I say move, it doesn't have to be that far away, but they'll move for a higher paying job. Female nurses typically are less likely to do so. Okay. Fascinating. And when we think about old fashioned sexism, I think we can say that we've made some progress. Are we living in an ideal world? No, but there has been some progress made.

How is this different, what you're talking about than old-fashioned sexism? So the starting point for the book is we discovered that the gender wage gap for college graduates as a whole was increasing. And when we started looking at numbers, two big numbers jumped out at us. The gender gap, the gap, not gender, the gap between CEO pay and standard worker pay. Go back 50s and 60s, it's about 20 to 1. Today, it's 399 to 1. And when you then look, how do CEOs get their money? How have corporations changed?

Not women changed, not gender relations changed. Corporations. The days of the corporation man did not believe in bonus systems, certainly not competitive bonus systems. GE in the 50s told its management trainees, you have to cooperate, but cooperate better than they do. You look at what that 399 to 1 system did, and it incentivized. We call it breaking the rules and getting away with it. If you can game the system to cheat on the numbers, on how many bank accounts are opened at Wells Fargo, which didn't get Wells Fargo more money, it just boosted its share price. That's how it paid off for top executives. Game the numbers, you get a huge bonus, you win big, and you're out the door by the time the chickens come home to roost. Now, in a system like that, what happens to women? 93% of gender disparities for executives come from bonus pay, not base pay. Base pay is pretty equal. And in this system, women are there. Take Walmart, largest class action in history. Terrible numbers, but still 18% of store managers were women. Comparable competitors, 50%. But still 18% are women. Women are in the game.

They're just marginalized in the game. And the game is a game of internal competition. And we see competitive bonuses as reflecting both efforts to game the system and the places where women are most likely to be shortchanged. Okay. So how do we distinguish between competitiveness in this game the system, break the rules, try to get away with whatever you can and incentivizing people to do great work and care about the growth of the organization, the profitability of the organization, because if we're talking about corporations and businesses, profitability is the goal. So my question is, how do we shift away from what isn't working towards something incentivizing that does. Yes, and that's what I always get asked, and I'm skeptical. But let me give you the short answer first, and then we can talk about the longer answer.

Let's take Microsoft as an example. So you say, where did this competitive system come from? Jack Welch, who is viewed the CEO of GE when he stepped down in 2000 called manager of the century. And he pioneered competitive bonus systems with stock options for a much higher percentage of employees. And this drives a lot of the gender gap in tech. And at one point it was adopted by 50% of corporate America, most notably Enron, Boeing, and lots of other places we can add to the corporate hall of infamy. But I want to talk about Microsoft because Microsoft is not, as far as I know, corrupt. Maybe Bill Gates engaged in some trust violations when they beat Apple, but Bill Gates steps down and Steve Ballmer, he was a sales guy. And the place where competitive

bonuses make the most sense is probably sales. Because sales are reductionist, individualistic, quarterly based. So Microsoft adopts Jack Welch's competitive evaluation system. And they get sued for sex discrimination. But perhaps more importantly, when they abandoned the system in 2013, the headlines are the evaluation system that wrecks your best people or Microsoft's lost decade. And the argument was that Microsoft failed in competing with Apple because the competitive bonus system destroyed trust. Without trust, you don't have innovation. Now, the word diversity, in the 50s, it meant a GM. The car guys talked to the ad guys. The engineers talked to marketing. Today, it means bringing in different perspectives. But when you have

competitive bonus systems, high stakes competitive bonus systems tied to reductionist short-term metrics, quarterly earnings, how many accounts you opened yesterday at Wells Fargo, it destroys trust, it lowers morale, it increases turnover, and it undermines innovation. What are the laws that are in place that are maybe working or helping? And then what are some things that we need to be mindful of that need to be fixed? Well, and I'm going to start first with why the laws don't work, and then some optimism. So the first chapter in the book is about Walmart. Again, largest class action in history. When we started, we thought we were going to write about

sex discrimination, you know, stereotyping, unconscious bias. And what we discovered is all of the factors in that case, which went to the Supreme Court, filed for decision by Justice Scalia, turning down class certification. you had to be willing to move several hundred miles away at short notice. The fact that they did not announce criteria for management positions. They heard it through a tap on the shoulder. They preferred B students and even C students to A students. Women are more likely to be A students. Why were they doing this? And then the light bulb went on. Wage theft. Wages and hours violations. Walmart never pays overtime. Managers don't compensate people who work overtime, even though they're legally required to do so.

Walmart is number one in the country in wage theft, having paid a billion and a half in fines over the last decade and a half or so, and almost twice the size of the number two company. Everything that disadvantaged women optimized wage theft. And wage theft is illegal, and Walmart does get fined for it. What changed? Well, Walmart, you know, when George W. Bush was president, he hired a Walmart lawyer to head the wages and hours division of labor. And the Supreme Court has gutted, has made it harder and harder to bring any kind of white collar prosecutions. It even let Jeff Skilling of Enron fame out of jail, but the lower courts put him back in. And so what you have is it's much harder to win cases, harder to win sex discrimination cases, harder to win white-collar crime cases of any kind.

It is not accidental. Nobody went to jail for the financial crisis. Now, that means you can break the rules and get away with it, and you have systems that optimize doing so. So what's the answer? Here's where we claims. The CEO of McDonald's not only was forced to resign, but when he lied about what was on his cell phone, the board clawed back a hundred million in bonuses in compensation from the CEO because of consensual relationships with subordinates. And then the Delaware Chancery Court, which oversees all of corporate America, ruled it was a violation of fiduciary duties for the head of HR not to have investigated the party atmosphere at headquarters in which he participated. What we're finding is if you can embarrass companies, you can win legally.

And it incentivizes hiring women. For every woman added to the board, sexual harassment complaints dropped by 22%. That's an area where companies are taking this somewhat more seriously, at least if it's top management that is being embarrassed. And we also find that the kind of atmospheres that are about abuse of power are also more likely to engage in sexual harassment so the two go together. The other promising thing is NASDAQ. NASDAQ in 2020, this is a stock exchange, put out a new rule requiring disclosure of the number of women on boards. Now they're being sued in the Fifth Circuit, of course, but the disclosure requirement should be legal. And the reason NASDAQ did it, it did an extensive set of reports indicating that more diverse boards,

and this includes racial diversity, but particularly gender diversity, more diverse boards are less likely to engage in securities fraud. Earnings manipulation is called earnings management. I prefer earnings manipulation. They're also simply less likely to have accounting errors that require revising financial statements. Now, why? Well, you can find women who will cook the books if you want to. If you look for them, they exist.

But it's much harder to have a number of women on the board if you're engaged in breaking the rules and getting away with it and covering it up, partly because the women on boards tend not to be part of the old boys club. They tend to get on boards by, they have different life experiences. They come from different networks. They are not friends with the CEO. And when you get that, it turns out it's better for business. I'm glad that you said that because that was the question that was baking in my mind. Something about like, is there a tipping point? Because I can think of all sorts of stories about sexual discrimination, sexual harassment,

cooking books, whatever you, all the things. And more often than not, even your Walmart example, 18% women. So it's, I don't want to send the message that women only ever do the right thing. That's, I don't think true or jives with my experience, but, and you gave some good reasons as to why, because there isn't that personal relationship. They probably had to get in differently, but is there a tipping point? I'm trying to figure out what the ideal state is here that would help to address some of these larger issues. When you're looking at management, you've got a system that is focused on, as I said, what's wrong with incentive pay. It's when it's tied to bottom line reductionist metrics that aren't good for the company in the long run.

So let's take GE as an example. Jack Welch, toast to corporate America. Increased earnings by several hundred percent, increased share price by 4,000 percent. And he leaves in 2000 when the financial crisis hits. It turns out he gained the numbers. I mean, GE paid 250 million in securities fines, but that's a slap on the wrist. The huge consequence was when the financial crisis hit, GE was toast. It no longer exists today because what they did was to shift heavily toward finance with fewer internal controls than more sophisticated financial companies. So they were wiped out.

So my takeaway is what prevents that the systems that are about gaming are going to be much more male dominant and they're going to be about exploiting people with walmart it's exploiting employees uh with ge its shareholders um in some companies its customers with Boeing, its short-changing safety concerns with its airplanes. Boeing has had a series of executives trained by Jack Welch, and many people attribute the destruction of the engineering culture at Boeing to those metrics. So I'm saying the goal ought to be better run companies, and if you get that, you'll get more women. But do we want 50% women? I mean, you know, some places in Europe mandate the percentage of women. I'm kind of skeptical about that. And one reason is, I think this is not just a woman problem. When you look at these policies, the single biggest losers in American society are blue-collar men in terms of

simply loss of status from where they were a generation ago. And I see these practices as short-changing women, especially women in the management ranks, but they're also short-changing all employees. And when you go down the management ranks, it's women who disproportionately staff the minimum wage jobs, but it's blue collar men who are most likely to simply be out of the labor market entirely. And both results are bad for the world. So what I want to see is a society that has more space for lots of people. And so let me give you one more little thing about the future. I did a lot of stuff, you know, spent a lot of time looking at labor market forecasts. The area where there's almost unlimited demand for jobs, not likely to be replaced by AI

anytime soon. Health care, could be education, entertainment, and tech. Now, the thing about the middle jobs, education and healthcare, disproportionately women. But the other thing is those jobs don't exist without subsidization. In healthcare, it may be the cross-subsidization that comes from insurance coverage. It doesn't have to be public subsidization, private subsidization. But again, you don't have people who can afford all the healthcare they need when they're sick. You get that through insurance systems that spread costs over a larger group of people, including people who are healthy.

That's what health insurance is about. And so if you start thinking that way about society, what do we need as opposed to what can an individual afford to pay for? You get really different results. And that's what I'd like to see. A full employment economy, greater emphasis on collective well-being. We have a whole chapter on school teachers. Don't get me started. So that's where I'd like to go with this. Okay. So I want to take a step back. I feel I'm going to try to paraphrase this in my words, not yours. But what I'm hearing is this is less about gender and more about people behaving like assholes and being narcissists and the policies that allow them to get away with it. And the reality that women are less likely to get away with behaving like assholes because,

because of the triple bind. And so this isn't necessarily like men are assholes and women are not. It's just that there are policies that are allowing people to get away with those behaviors. And our current reality is that men are allowed to get away with those behaviors at a level that women are just not. Is that at all on track? Boy, that's a perfect summary of the book. Okay. Yay. I feel good about that.

Okay. You've touched on a few, but let me just close this out by asking, what are a few actionable steps we can be taking now to ensure that we close this gap and create environments where people can't get away with being assholes anymore? Yeah. Well, and let me emphasize, the asshole part is deliberate. So when you have a system, let me just describe Walmart a little bit. So Walmart, after tapping people on the shoulder and choosing its C students, it's then a total sales divided by labor costs and only labor costs. And the managers will tell you the only way they can do that is by shortchanging their employees. So this is selection for assholes.

And when I summarize it, it's what high stakes competitive pay does, make everybody insecure. You're always looking over your shoulder at what your coworkers are doing. You then celebrate the people who succeed by stabbing other people in the back and you make the managers where they harass and bully and increase turnover and lower productivity. That's what the

management studies show. So what can you do about it? First, I do, I'm quite serious. If it's a toxic workplace, but they're paying you more money than you've ever had in your life, you do have to be plotting your exit strategy. Those workplaces are not going to change, and you can't change them. The second thing, I mean, collectively, maybe we can. The second thing, pay attention to abusive power. So what I see happening in the legal world is instead of employment lawyers focusing on unequal treatment, what they're really focusing on is abusive power. Whistleblower claims and sexual harassment claims are the ones to keep an eye out on. And when you see sexual harassment claims, you're likely to see a dysfunctional workplace and a bunch of assholes.

And that is going to be linked to a lot of other misconduct that's harder to see. So it's a tell. And that's where we're seeing change in the legal system is greater sensitivity to abuse power. It's ugly. And it's not just about sexually harassing women. It's about cheating customers. It's about predatory lending practices. It's about a lot of nasty stuff. So where do we need to go? How do you bring back the rule of law? So now I'm going to be radical and you can dismiss me. I am. I go back and, you know, if one is in the academy, especially on the left, I'm told never to say nice things about the 50s. You have to say they were sexist, racist, and they were. I

remember them. I'm old enough. But I think you also have to say what worked. And what worked in corporate America was 90% marginal tax rates. And I want to talk about why. Okay. It's not about raising money. It's not even about fairness and paying for things, although one could make those arguments. It's about something else. When you can't walk out the door with huge bonuses, you care more about the institutions. And I'd like to summarize it this way. Compare George Romney, the dad, governor of Michigan, ran for president in the 60s. Mitt Romney, the son, governor of Massachusetts,

ran for president 2012. George Romney, the dad, when he bragged about how he should be president because he was a great businessman, bragged about the health of American motors. Mitt Romney, the son, when he ran for president, the test of how good a businessman he was was his $200 million in the Cayman Islands with the op-ed pages of the Wall Street Journal saying, if he's really a good businessman, he'd have had more than $200 million in the Cayman Islands. But nobody, I'm not even sure Mitt, really cares

about Bain Capital, the company it founded. It's an extraction device. It exists to make you money. If you can't take it all with you, park it in the Cayman Islands, use it to buy Twitter, then you tend to care a whole lot more about the institutions with which you're associated. And so one of the questions I've got is how do you cap the unjustified power? And, you know, there are lots of corporate reforms, stock options. You can't cash them in until 10 years after you leave the company. I mean, that's America today, how much money you make, not the health of your company, not the innovation of your product is what establishes your status. And that's what's wrong with the system. June, my wheels are spinning.

I feel like smoke might be coming out of my ears. Thank you for such a deeply intelligent and fascinating conversation. I know I'm going to have to listen to this back several times. Thank you, thank you. Thank you for being here. And if you want to get your hands on June's book, it's Fair Shake, Women and the Fight to Build a Just Economy. Go to Amazon or ask your local bookstore to get it for you.

But absolutely get your hands on Fair get it for you. But absolutely get your hands on Fair Shake. Thank you again for being here. Thank you. Good questions. And you, you nailed it. I mean, that was an excellent summary. Awesome. Well, thank you. I appreciate that. All right. This may seem like a random way to close out this episode, but with a rather contentious election on the horizon, I think it's important. I find that people tend to vote not from a place of knowledge, research, or even understanding, but rather from a place of personal beliefs. And we typically have one or two beliefs that are running the show. There's one or maybe two things that we care so much about that we make all our decisions based on it and consume only information that

supports our belief and never challenges, questions, or offers a different perspective on it. And even worse, we think our beliefs should be applied, should be the standard for everyone else without considering their unique experiences, different perspectives, and distinctive challenges. This does not make us very good citizens. So I'm going to ask you to consider, in addition to what you care most about and what you believe is best, what will move policy and opportunity forward for women, all women, and what will limit the opportunity for any of us to behave like assholes? Because getting a fair shake, well, that's the baseline from which women's work should begin.