On The Chopping Block: The Women of Wall Street

by Anna Collins, Esq. (Portland, Maine)

While the current economic crisis has been undeniably devastating for Wall Street, some say the women of Wall Street are at the sharpest edge of the chopping block. As reported by Forbes Magazine, financial services and insurance firms have cut 260,000 jobs. The majority of layoffs, however, have impacted women. Seventy-two percent (72%) of the workers laid off have been women, even though they constituted sixty-four percent (64%) of employment before the crash began.

Louise Marie Roth, Professor of Sociology at the University of Arizona and author of “Selling Women Short: Gender Inequality on Wall Street”, notes that several factors may explain why the women of Wall Street are at risk during this financial crisis.

Being “One of a Kind” Makes Women Easy Scapegoats

First, the women are often isolated from other women in their company, especially at the highest executive levels. On the one hand, strong company performance or individual achievement brings attention of employees and colleagues towards the women. On the other hand, being “one of a kind” makes it easier to become a scapegoat when things are not as rosy. “A weak woman stands out more than a weak man,” Roth explains. While men’s weaknesses get ignored in a crowd, the rarity of women leaders on Wall Street makes it easier to amplify their weaknesses — whether real or not.

Contradictory Expectations Lead to Negative Impressions

Another factor that may explain why women are at risk is that they are especially vulnerable to a classic double standard when it comes to expectations of behavior. On the one hand, there is an expectation that because Wall Street is driven by “masculine” behaviors, women must be firm, tough, and aggressive. Yet, if they are too much so, they are seen as behaving inappropriately. As women, after all, they are expected to be nice and feminine. “For many women I talked to,” Roth explains “this is hard to do.”

Often, Roth notes, the expectations are contradictory and women simply do not know which expectation is being invoked. Even worse, if both expectations are invoked at the same time, women are left without a winning strategy. Regardless of which expectation they meet, their actions are not sufficient.

The Lack of Objective Evaluations Amplifies Subjective Prejudices

In part due to these two factors, the women of Wall Street may be more vulnerable in a time of economic crisis. They are the ones, after all, who stand out and cannot seem to meet the expectations of their companies. “Their perceived weakness or inability to meet conflicting expectations provides a reason to let them go,” Roth concludes.

In fact, some companies utilize evaluation methods that are far from objective and amplify subjective prejudices — such as “360 degree reviews.” “Depending on industry, these types of reviews,” Roth explains “can be very subjective and if women are being held to a higher standard, the evaluations end up compounding the subjective stereotyping – especially at the higher end of the corporate ladder.” The end result is harsher evaluations, especially in an economic downturn.

Crisis Motivates Companies to Intensify “Business As Usual”

Roth believes that when companies are faced with crisis, they oftentimes intensify their “business as usual” practices. “Instead of recognizing where the company may be failing,” she continues “they intensify the existing cultural routine.” If the culture is one where women are held to a higher standard, as discussed earlier, then the women are the first to get in the way of “business as usual.” The reality is, Roth says, that organizational change does not happen rapidly and women are oftentimes sacrificed at the alter of broken business models — the same models that some say led to this financial crisis in the first place.

After the initial crisis period is over, Roth believes companies will realize that they must make dramatic changes to their business models. It is hard to anticipate what the post-crisis models will look like, but Roth expects the changes will include new types of compensation structures that are friendlier to women. “As compensation ramps down a little, the jobs in finance may become less attractive to men,” she says “thereby leaving an opening for women to
enter or re-enter the field.”

Sadly, this possibility underscores what some research already shows. “Research on jobs that change from being more male-dominated to gender-mixed or female-dominated shows that this happens after the rewards and prestige decline,” Roth explains, “thus making the jobs less appealing to white men.” If Roth is right, one wonders whether women will find such a new status quo more acceptable than the current one. It is certainly hard to imagine that the women of Wall Street, especially those who are now bringing employment discrimination claims, will be satisfied.