Investigating the True Cost of Workplace Sexual Harassment

Senators Kirsten Gillibrand, Patty Murray, Dianne Feinstein and Elizabeth Warren have requested that the Government Accountability Office (GAO) commission a​ ​study​ to reveal the true costs of sexual harassment in the workplace and create an in-depth, accurate picture of its true consequences—not just for individual employees and employers, but for the national economy.

In 2017, women across the country participated in a strike on International Women’s Day to showcase their contributions in their workplaces and communities. The #DayWithoutAWoman protests demanded gender equality. (A Jones / Creative Commons)

What is known about the prevalence of sexual harassment and its economic effect on the U.S. economy and federal workforce? How does the Equal Employment Opportunity Commission (EEOC) track and compile data on the prevalence and costs of sexual harassment in the workplace? What actions do experts recommend in order to improve understanding of the costs and prevalence of sexual harassment to the U.S. economy?

These are the central​ ​questions​ that the Senators want to see addressed in the study, and such data could prove to be immensely informative—especially because it would reveal how statistics around sexual harassment’s impact are discovered, created and framed.

In a letter to the GAO, the four senators​ ​cited​ an EEOC report indicating that employers had paid out about $700 million to employees in sexual harassment settlements since 2010—a figure which includes the costs of the pre-litigation process only, and not the potentially millions of dollars paid post-litigation​. According to their letter, sexual harassment in the workplace has been reported to have already cost the federal government about $327 million.

So far, all of the data that has been collected on sexual harassment is related to the direct costs, such as payouts and legal fees—but there is no current study that includes those that are less visible, and their inclusion could cause the noted cost to skyrocket. “Knowing the true cost of sexual harassment would be significant,” Adrienne Lawrence, who has been tracking recent investor lawsuits against publicly traded companies accused of employing sexual harassers, such as Wynn Resorts and 21st Century Fox, Inc, told Ms. “Those numbers would be so incredibly impactful and real for larger social implications associated with businesses essentially squandering money by allowing sexual misconduct in the workplace.”

The actual costs of sexual harassment in the workplace would undoubtedly shock policymakers and citizens alike. Factoring in the value lost in women leaving the workforce after being harassed, as well as the growth potential squandered by companies now facing massive public relations crises in the wake of the #MeToo movement, could play a huge role in shifting the dynamics around the fight for workplaces free from sex discrimination. Research data on the true cost of sexual harassment could lead shareholders to redirect their investments elsewhere and insurance carriers to increase premiums—as was the case for Wynn Resorts, which is fielding lawsuits from investors who claim that the company’s refusal to fire CEO Steve Wynn led them to economic losses. Monetizing the value of women workers could also give businesses a better understanding how much they are hemorrhaging financially by not addressing sexual harassment, and even potentially inspiring women to know their worth and demand better for themselves.

This is not the first time that female senators have requested investigations into the costs of sexual harassment in the workplace. In January, Senator Gillibrand appealed to the Department of Labor (DOL) and the Bureau of Labor Statistics (BLS), asking them to do a similar study. BLS​ ​declined, citing difficulties and complexities in data collection methods—even though the Bureau is trusted with processing and producing the most complex level of economic data.

BLS said it would be too challenging for researchers to monetize individuals and their human capital to give a better understanding of how much money is truly lost by allowing sexual harassment to continue. Lawrence disagrees. “There are people who do these studies for wrongful death lawsuits all the time,” she pointed out, “telling you how much someone’s worth. Being able to monetize the economic value individuals bring to the table and the loss caused by sexual misconduct would also give Congress and the individuals lobbying for change more power in terms of showing the financial loss that’s going on.”

It goes without saying that it is disappointing to think employers and policymakers need an additional motivation to fight back against institutionalized sexism, and specifically to curb sexual harassment in the workplace—but in an economy fueled by competition and capital, a deeper look into the true costs of sex discrimination could help advance a feminist agenda. “Everybody has to be better than somebody else,” Lawrence reasoned, speaking to the nature of competition that dominates most sectors. “Unfortunately, that tends to be more important at times than economics—but at least we know the next most important thing in our society is money, and so to be able to monetize the loss caused by sexual harassment, and to make it an economic issue as opposed to a moral issue, may wake up a few more people.”

The study Senators are demanding now could lead to a watershed moment in the fight to end sexual harassment. Knowing the scope of the money lost because of inaction on sexual harassment could usher in a sort of sea change. Until then, Lawrence encourages women to stay motivated and engaged—and to keep speaking up when they encounter such behavior in their own workplaces.

“I tell people to continue to fight, to continue to educate themselves,” Lawrence told Ms. “Speak life into your colleagues, speak life into the women in your lives who may not know their worth. Communicate to women that they have options and that they can stand tall.”

Rosalind Jones is a writer and global feminist thinker with a focus on international women’s liberation. Her goal is to use her writing and language skills to elevate the voices of gender equality advocates in all corners of the world. She is an Occidental College graduate with a degree Diplomacy and World Affairs and is currently an editorial intern at Ms.

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