Mar 6, 2007

Hillary's Strange Math

On her website, Hillary Clinton says she wants to teach "women and girls negotiation skills" because "Women are 8 times less likely to negotiate their starting salaries then men and if a woman with a starting salary of $25,000 fails to negotiate for $5,000 more a year, she stands to lose more than $568,000 by age 60."

I'm trying to figure out how she got the $568,000 figure. Let's say you start working at 18 and fail to negotiate a 5,000 a year raise. This causes your salary to be $5,000 lower each year of your working life. By age 60 you have lost only $210,000. I suppose Hillary is somehow using interest to get the $568,000 figure.

Also, if women really are less likely than men to negotiate higher starting salaries then employers should prefer to hire women. This will increase the demand for female employees and so raise their non-negotiated for starting salaries. This process should continue until the starting salaries of equally qualified men and women become equal.