Understanding what the glass ceiling is and how it affects women in the workplace

• The glass ceiling refers to the often invisible barriers women and minorities face in the workplace.
• The writer Marilyn Loden coined the term in 1978. In 1991, the Glass Ceiling Commission was created.
• Women are participating more in the workforce but often aren't represented in executive positions.

Though women play an integral role in today's workforce and continue to break barriers, many women and minorities experience instances of discrimination and are overlooked for senior roles because of the glass ceiling.

What is the glass ceiling?

The term "glass ceiling" is a metaphor for the barriers that women and people of color face when striving to move upward in the workplace.

"The glass ceiling isn't so much a thing. It's a phenomenon that people have noticed where women seem to have an easier time entering into organizations at lower levels, but as they advance to higher levels, their numbers dwindle," said Rosalind M. Chow, an associate professor of organizational behavior and theory at the Tepper School of Business at Carnegie Mellon University.

"So the glass ceiling basically refers to the idea that there is something holding women back or down from getting into those leadership positions. This is probably doubly true for women of color," she added.

Looking at education attainment levels, women get advanced degrees at higher rates than men and play a key role in the labor market. Yet there's a dearth of women in C-suite or other executive roles.

Data from the Bureau of Labor Statistics showed that in 2021, women made up 29.1% of chief executives in the workforce. And as of September, the 2021 "Women CEOs in America" report said, there were 41 female CEOs of Fortune 500 companies — a 10.8% spike from the previous year. Though that number was a record high, women CEOs still made up only 8.2% of Fortune 500 companies.

As for women of color, the report said there were five in CEO roles at Fortune 500 companies, which was an increase from three in 2020.

Note: The "glass escalator" is different from the "glass ceiling" and refers to white men being promoted faster when working in fields typically dominated by women or minorities.

Understanding the glass-ceiling theory and effect

The term "glass ceiling" was coined by the writer and consultant Marilyn Loden in 1978 at the Women's Exposition in New York. From 1991 to 1996, through The Glass Ceiling Commission, the US Department of Labor studied the phenomenon and how it affected women and minorities in the workforce.

In 1995, the commission found that white men held most management positions in corporations, and that the workforce was divided, with women and minorities accessing fewer leadership opportunities.

"The existence of this invisible barrier significantly puts women like me at a disadvantage, all things like competence and skills being equal," said Deborrah Ashley, a marketing strategist, a trainer, and the founder of Thrivoo, a LinkedIn consulting and training company. Before starting her company, she spent two decades working in corporate marketing.

Ashley added: "This is especially true for women of color because being a woman in the first place has its consequences already. Adding color to the mix puts us in an even more difficult situation because when pitted against white women, we are usually considered inferior."

It's not women's lack of talent, skill level, or ambition that prevents them from accessing further opportunities. There are other factors at play, such as unconscious bias, that can affect whether women move up the corporate ladder.

Chow said that in general, men tended to see great performance in other men, and women saw the same in other women. But when a group of men evaluate a woman's performance, they're less likely to see her as a "sure bet" or recognize her merits.

"People who are evaluating workers have some inherent biases themselves and are less likely to recognize great talent in women of color," Chow said.

Quick tip: The social psychologists Alice Eagly and Linda L. Carli suggested that the term "glass ceiling" should be retired, and that the term "labyrinth," sometimes referred to as the "labyrinth of leadership," should be used instead. This metaphor describes the detours and twists and turns women and minorities take in their career as they strive for more authority.

Women in the workforce

Not so long ago, women weren't as central to the workforce. In 1950, 30% of women participated in the labor market, data from the Bureau of Labor Statistics showed.

As of January, even despite the pandemic pushing women out of the workforce, women's participation in the labor market stood at 56.8%, data from the Department of Labor showed.

The work landscape has shifted significantly over the past seven decades. More women are in the workforce, but they aren't represented in as many leadership or executive roles.

Research from the University of Chicago Booth School of Business found that women tended to choose lower-paying professions, and despite attaining higher levels of education, they were still paid less. Additionally, the research found that women tended to be more risk averse and might not negotiate or pursue higher-paying jobs.

Part of this may be a result of how women are conditioned and socialized by the patriarchy — this extends to the workplace, which is essentially a microcosm of patriarchal systems. Of course, this isn't always the case.

Another factor for women in the workplace is that much of the unpaid domestic caregiving falls on women's shoulders. Women are often the default parent for childcare or may be caring for aging parents. Those factors affect women's workplace needs.

"Women might opt to take more flexible work arrangements, which then make it so they are less visible to people who are making decisions about who is a star performer or who should be promoted," Chow said.

The glass ceiling isn't just about women's choices or how they must navigate the world and the workplace. "The alternative explanation is that women are performing the same as men, but their performance is discounted or even evaluated more poorly even though it's exactly the same," Chow added.

Companies can work toward eliminating this barrier by recruiting women and minorities into leadership and executive roles, something that's lacking in many corporate companies. On top of that, companies can do an internal audit for their hiring and promotion processes and offer a level of transparency to employees.

"To address this issue, companies should be transparent when it comes to their promotion process so they can show that they have given all qualified employees equal opportunities for career advancement. This will eliminate bias and effectively destroy the glass ceiling," Ashley said.

Aside from focusing on the recruitment of a diverse pool of candidates and providing equal opportunities to employees, companies should evaluate where they stand regarding promotion and retention.

"A lot of it has to do with promotion and retention issues that they have within the organization — keeping track of why women or women of color are leaving or not getting promoted," Chow said.

The glass ceiling and its effects on women's finances

Women's earning potential may be capped at a certain level, and upward mobility may be less accessible because of the glass ceiling. Though, in theory, employers are supposed to provide equal opportunities, many women have firsthand experience of their careers plateauing.

That's why the glass ceiling is an important concept. It illustrates the invisible ways — often because of sexism and racism — that women are kept in certain roles and may not be afforded the same opportunities as men. Of course, not getting a fair shot at higher-level roles with higher pay has an effect on women's finances.

"When it comes to women's finances, the glass ceiling prevents them from earning as much as the men in their industries, thereby widening the gender pay gap," Ashley said.

Aside from not having the same access to opportunities with higher pay, there's also the gender pay gap, with women earning $0.82 for every dollar a man makes. For women of color, the gap in pay is even steeper. These factors have a compounding effect on women's finances over their lifetime, resulting in many women earning less and saving less for retirement.

The bottom line

The glass ceiling affects women's career trajectories and, therefore, their financial lives. Change is something that can happen within companies by reviewing promotional practices and employee retention. While women can strive to support other women in the workplace, Chow said that men must also be willing to step up, speak up, and advocate for the advancement of women in the workplace. So often they are the ones in positions of power, and change can start from there.

• Read more from Women of Means:
• Understanding the gender pay gap and how it hurts women's earnings and ability to build wealth
• I never planned to be the breadwinner, but having a stay-at-home husband made the benefits of invisible, unpaid labor crystal clear
• 3 habits of high-earning women that can help just about anyone with money, according to a financial planner who's worked with millionaires
• A career coach who spent 16 years in corporate America breaks down what women should do monthly, quarterly, and annually to position themselves for a raise