Unexpectedly Intriguing!
May 20, 2014

We think that Pinch Sulzberger is an idiot.

There. We said it. Now, let's discuss why we think that....

It all starts with a story that was floated to and repeated by the New Yorker's Ken Auletta regarding the reasons why Sulzberger sacked Jill Abramson, the woman who has worked for several years as the Executive Editor of the New York Times as that company worked to shrink its way toward profitability under her leadership. The emphasis in the following section is ours:

Several weeks ago, I’m told, Abramson discovered that her pay and her pension benefits as both executive editor and, before that, as managing editor were considerably less than the pay and pension benefits of Bill Keller, the male editor whom she replaced in both jobs. “She confronted the top brass,” one close associate said, and this may have fed into the management’s narrative that she was “pushy,” a characterization that, for many, has an inescapably gendered aspect. Sulzberger is known to believe that the Times, as a financially beleaguered newspaper, needed to retreat on some of its generous pay and pension benefits; Abramson, who spent much of her career at the Wall Street Journal, had been at the Times for far fewer years than Keller, which accounted for some of the pension disparity. Eileen Murphy, a spokeswoman for the Times, said that Jill Abramson’s total compensation as executive editor “was directly comparable to Bill Keller’s”—though it was not actually the same. I was also told by another friend of Abramson’s that the pay gap with Keller was only closed after she complained. But, to women at an institution that was once sued by its female employees for discriminatory practices, the question brings up ugly memories. [Update: On Thursday, Sulzberger gave his staff a memo on what he said was “misinformation” on the pay question. “It is simply not true that Jill’s compensation was significantly less than her predecessors,” he wrote. “Her pay is comparable to that of earlier executive editors.”] Whether Abramson was right or wrong, both sides were left unhappy. A third associate told me, “She found out that a former deputy managing editor”—a man—“made more money than she did” while she was managing editor. [Update: The man in question, John Geddes, was in fact the managing editor of news operations.] “She had a lawyer make polite inquiries about the pay and pension disparities, which set them off.”

The reason we believe that Sulzberger is an idiot is because his solution to the problem of unequal pay at the New York Times was to significantly boost the pay of his top-ranking female employee. If he were more serious about running a successful and more profitable business, he should have replaced all the overpaid men on the New York Times' staff with women willing to do the same jobs at lower levels of compensation.

New York Times Masthead - Source: http://www.coons.senate.gov/blog/post/new-york-times-makes-case-for-election-reform

To demonstrate why, we'll adapt the math on wage gaps that was recently developed by economist Steve Landsburg to the particular situation that applies at the New York Times and media organizations in general. To do that, we'll use data provided by Pew Research and the New York Times' 2013 annual report.

The results of the math in our tool below will tell us how much more profitable the New York Times could have been, if only Pinch Sulzberger were not so determined to maintain just under two men for every one woman on the New York Times' payroll at their average 20% higher pay.

Wage, Workforce and Business Debt Data
Input Data Values
Women's Pay as Percentage of Man's Pay [%]
Number of Women per Each Man in Workforce
Employee Compensation as Percentage of Business Revenue [%]
Debt Expenses as Percentage of Basic Operating Revenue [%]

How Much Could a Business Profit by Replacing Men with High Pay with Women Earning Lower Pay?
Calculated Results Values
Percentage Boost in Profit For Hiring Women to Replace Men [%]

That additional 10.4% profit may not seem like much, but the financially-troubled New York Times Company would not have had to shrink so much in recent years if Sulzberger had implemented such a lower wage-paying strategy. Sexism is costing Sulzberger's New York Times' money.

And that's why we think that Pinch Sulzberger is an idiot. As it happens, others have other reasons for thinking the same thing.

Image Credit: Christopher Coons.

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