A research team led by Kellie McElhaney and Genevieve Smith, including Nitisha Baronia and Krupa Adusumilli, developed this case, assisted by Case Writer Susan Thomas Springer. We would like to give special thanks to the following individuals who provided critical insights at Gap Inc.: Art Peck, Michelle Banks, Debbie Edwards, Nancy Green, Julie Gruber, Dan Henkle, Danielle Katz, Erin Nolan, Andi Owen, Peter Pawlick, Sheila Peters, Lauri Shanahan, Bobbi Silten, Sabrina Simmons, Amy Solliday and Keith White. Copyright © 2017 by The Regents of the University of California. All rights reserved. No part of this publication may be reproduced, stored, or transmitted in any form or by any means without the express written permission of the Berkeley-Haas Case Series.

July 1, 2017

KELLIE MCELHANEY GENEVIEVE SMITH

Eliminating the Gender Pay Gap: Gap Inc. Leads the Way

“If change continues at the slower rate seen since 2001, women will not reach pay equity with men until 2152.”

The Simple Truth About the Gender Pay Gap, Spring 2017 Edition,

American Association of University Women (AAUW)

“Frankly, I would have always assumed that women were getting paid the same amount as men. I mean, they were doing

the same jobs. But, back when we started Gap… I don’t think it occurred to many people that women could be leaders.

I’m glad to know that things have changed.”

Doris Fisher, Co-Founder of Gap Inc. On Monday mornings, one Gap Inc. executive used to open his staff meetings chatting about a topic common across America’s corporate offices—the weekend’s football games. But thanks to Gap Inc.’s inclusive culture, one female employee felt comfortable sharing that the many non-football fans around the table felt left out of that conversation. So, he started warming up his meetings with less gender- specific topics. The corporate culture at Gap Inc. broke gender norms from the beginning. In 1969, Don and Doris Fisher opened the first Gap store in San Francisco as equal partners selling Levi’s and vinyl records simply

B5892

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GAP INC. 2

because they had a hard time buying a pair of jeans. The husband and wife founders grew the company together at a time when there were few women business leaders—yet they made pay equity and female leadership part of the company’s heritage. Today that store has grown into a global brand with e- commerce sites, 3,200 company-operated stores, and about 450 franchise stores in more than 90 countries worldwide. At the time of writing, The Gap Inc., a publicly traded company since 1976, was composed of five divisions: Gap, Banana Republic, Old Navy, Athleta, and Intermix. In 2014, Gap Inc. made history by becoming the first Fortune 500 company to announce that it pays female and male employees equally for equal work, on average across all its locations (controlling for observable variables). They commissioned a leading gender and diversity consulting firm named Exponential Talent to validate the methodology and numbers. Exponential found no meaningful or statistically significant difference in pay by gender across the global organization. Furthermore, when comparing pay of the median male and median female full-time employee, the female to male ratio was at parity,1 signifying the high representation of women at all levels of leadership and in managerial positions. Gap Inc.’s leadership in equal pay and gender equality has been publically recognized—for example, the company won the 2016 Catalyst Award.2 Since Gap Inc.’s announcement, other companies have followed suit in claiming “equal pay,” and the attention towards mitigating the gender pay gap by companies and governments continues to grow. On June 15, 2016, thousands of men and women gathered at the White House for the first United States of Women Summit, discussing issues such as leadership, educational opportunity, and equal pay for women. Leaders and change-makers from around the world—from celebrities such as Oprah Winfrey to political leaders including President Barack Obama—gathered to advance the state of women and the U.S. economy.3 At the conference, 28 companies signed the Equal Pay Pledge4 to take concrete actions, such as conducting annual pay analyses, to lower the national gender wage gap. Gap Inc. took the pledge as well, noting that despite having an exemplary track record for equal pay, they are committed to continuing their work. Gap Inc.’s company culture has enabled women to rise in the ranks through a variety of policies and practices including diminishing psychological barriers, encouraging mentorship, being family-friendly, and more. This culture of collaboration, inclusion, and close relationships – which can be considered more feminine traits – has built itself over time, creating a structure for women’s advancement and equal pay. U.S. Pay Gap History Today, women make up nearly half of the workforce in the United States; however, women continue to earn less than men. In 2016, the U.S. Census Bureau reported that the female-to-male earnings ratio (based on the median earnings of men and women in 2015) is 0.8.5 Even when women do the same jobs as men, and controlling for observable variables, a gap persists: women earn between 93-95% of their

1 Peter Pawlick. Personal Communication, October 31, 2016. 2 See more here: http://www.catalyst.org/media/catalyst-announces-winner-2016-catalyst-award. 3 (2016). The united state of women. The United State of Women. Retrieved from http://www.theunitedstateofwomen.org/. 4 The pledge, which can be taken online, requires that companies “…commit to conducting an annual company-wide gender pay analysis across occupations; reviewing hiring and promotion processes and procedures to reduce unconscious bias and structural barriers; and embedding equal pay efforts into broader enterprise-wide equity initiatives.” Signing companies must also “…identify and promote other best practices that will close the national wage gap to ensure fundamental fairness for all workers.” Businesses that have taken the pledge have noted their specific commitments here. 5 Bernadette D. Proctor, Jessica L. Semega, Melissa A. Kollar. Income and Poverty in the United States: 2015. United States Census Bureau. Retrieved from https://www.census.gov/library/publications/2016/demo/p60-256.html

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GAP INC. 3

male counterparts’ salaries.6 The wage gap, which is due to a variety of variables including social and cultural norms and unconscious bias, results in significant lost wages that add up over a woman’s lifetime and contribute to gender inequality. At the current pay gap, women will not see equal pay in the U.S. until 2059. For women of color, the rate is slower, with black women having to wait until 2124, and Hispanic women having to wait until 2248 for equal pay.7 Historically, there have been two important factors in decreasing the wage gap: the increase of females in the job market and reduction of occupational segregation. Ever since women entered the job market in larger numbers in the 1950s to work during the interwar and World War II periods, the rise of women in the job market has continued. Indeed, between 1947 and 2008, female employment among working-age women increased by approximately 0.6 percentage points per year. This growth has been due to several reasons, including medical advances (e.g., improved contraception and better maternal care) and technological advances that have made childcare and household work easier and more accessible to working women.8 This increased labor participation influenced wage convergence, and legislation for equal pay further pulled women into labor markets. There has been considerable progress in reducing the extent of occupational segregation. Since 1970, women have reduced their over-representation in administrative support and service jobs and have made significant inroads into management and traditionally male professions.9 However, trends have differed across educational groups. Highly educated women have made substantial progress moving into formerly male managerial and professional occupations, while less-educated women have made smaller gains integrating into traditionally male blue-collar occupations.10 Finally, (and related to reductions in occupational segregation) evolving social norms have naturally eased the gender pay gap as well.11

Measurement Methods There are multiple ways to explore “equal pay” and measure the gender wage gap within an organization.12 Organizational Pay Gap Analysis The broadest option is to compare the average salaries that women and men earn across an organization, at all levels. This high-level analysis tends to result in a larger wage gap, as many companies have a disproportionate number of men in higher paying managerial and leadership positions. As a result, women may seem to be earning a lower average salary than men in the company, not necessarily because each

6 C. Corbett and C. Hill. (2012). ERIC—Graduating to a pay gap: The earnings of women and men one year after college. American Association of University Women. 7 (2014). The gender wage gap: 2014. IWPR. Retrieved from http://www.iwpr.org/publications/pubs/the-gender-wage-gap-2014/. 8 C. Olivetti and B. Petrongolo. (2016). The evolution of gender gaps in industrialized countries. Working paper. National Bureau of Economic Research. 9 F. Blau and L. Kahn. (2016). The gender wage gap: Extent, trends, and explanations. IZA, No. 9656. Retrieved from http://ftp.iza.org/dp9656.pdf. 10 F. Blau and L. Kahn (2016). The gender wage gap: Extent, trends, and explanations. IZA, No. 9656. Retrieved from http://ftp.iza.org/dp9656.pdf. 11 C. Olivetti and B. Petrongolo. (2016). The evolution of gender gaps in industrialized countries. Working paper. National Bureau of Economic Research. 12 WGEA.Pay equity toolkit. Retrieved on October 12, 2016 from https://www.wgea.gov.au/sites/default/files/pay_equity_tookit_managers.pdf.

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GAP INC. 4

woman is being offered a lower salary than her male counterpart, but because of a leadership gap illustrating that women are not moving up to the higher paying roles in the company. Level Pay Gap Analysis Compare average male and female pay at each level in the organizational hierarchy (analyst, manager, etc.) across all functional verticals, looking at pay gaps within each management tier regardless of their functional division. This mediates for some of the leadership representation gap; however, it does not consider how jobs within different functional divisions may be assigned different market values. Further, it may fail to account for the disproportionately high number of women in back-end or support positions. Like-For-Like Pay Gap Analysis Also called equal pay for work of “equal or comparable value,” this is perhaps the most detailed pay gap analysis and it is at this level of analysis that the gender wage gap often seems most narrow. This illustrates the direct difference in the salary that men and women earn in similar occupations, which is much smaller once the leadership gap is accounted for. Defining work that is of “equal or comparable value” can be difficult and requires a deep level of analysis and understanding of comparable work. The gender pay gap includes both explained (measurable) and unexplained (often difficult to measure) components. Measurable factors (other than type and level of work) include, for example, age, tenure in position, number of subordinates, and geography. Even when all measurable factors are considered, an unexplained gender pay gap persists. This reflects discrimination, implicit biases, social norms, and other factors that are difficult to measure—including possible gender differences in risk-taking, mobility, and ambition.

How Gap Inc. Measures Pay At Gap Inc., managers are provided with pay data for their overall team plus salary information that reflects the external market at minimum once each year during a pay review process. Sabrina Simmons, former CFO of Gap Inc., looked at the entire group as a whole to see where people were ranked and paid when a request for higher pay came in. Through this she examined and corrected for any disparities. Gap Inc. analyzes pay data annually and provides information to empower managers. Initially, Gap Inc. found limited research and a lack of existing methodologies to create a model to examine equal pay. After some study, they chose two methods of analysis. First, they performed organizational pay gap analysis, which shows a ratio of pay for full-time male versus female employees, not controlling for any variables or levels in the organization. Second, they performed like-for-like analysis, which shows a ratio of pay for all male and female employees, controlling for work of equal value and other measurable factors. In 2014, Gap Inc. conducted an analysis of both the median pay and average pay for all 34,114 female versus male full-time employees globally, not controlling for any variables or levels in the organization. The median female to male pay ratio was at parity. The average female to male ratio was slightly lower for women. However, this is representative of the fact that Gap has a higher percentage of women at entry-level positions. Moving into more senior positions in headquarters, the percentage of women and men even out.

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GAP INC. 5

Another analysis was conducted to find the pay ratio between male and female employees when controlling for levels and measurable factors for all 129,387 employees (excluding Senior Vice Presidents and above), including part-time workers.13 In the case of part-time workers, hourly rates were annualized at 40 hours per week and monthly rates were annualized. Gap used a geographically sensitive method of comparing employee pay rates in like jobs across the entire organization. Pay ratios for male versus female employees were developed for each like job by controlling for select variables, including region (as the cost of labor varies by location). Those jobs were then grouped within defined job levels based on the employee’s contribution level,14 job responsibilities and skill/experience required. Other variables including time in position and team size were not controlled for in the analysis but provided additional context. The findings were statistically validated by an external management firm, that found that no significant or meaningful gender wage difference at Gap Inc. globally or within any of their major regions. While there have been minor fluctuations by level over the past 3 years, the results are consistent.

Gap Inc. Empowers Managers and Employees Gap Inc. strives to minimize unconscious bias impacting pay through several mechanisms. First, Gap Inc. provides leaders with pay data for their teams at least once per year, and includes market-relevant pay ranges for each role, taking into account geography. They also provide managers with criteria and filters in making pay decisions. Not only do these practices reduce unconscious bias in pay, but according to Mercer (2016), organizations with a robust pay equity process and a dedicated team also have greater female representation. Mercer highlights that only 35% of organizations report a pay equity analysis process built on a robust statistical approach.15 The team that oversees pay at Gap Inc. shares with managers and HR partners where their employees are positioned relative to pay ranges that reflect the external market. Managers are provided with a distribution of employee pay in the pay range and are then free to make decisions in terms of paying talent appropriately. The data does not necessitate action from managers, but rather provides them with data to make informed decisions. A promotion/equity budget is a part of the overall annual pay increase budget and can be used to address equity issues. In discussing the pay data provided to managers, Senior Vice President of Loss Prevention at Gap Inc., Keith White says: “When operating eyes wide open and not just treating people as if they are in a vacuum, gender inequality in pay becomes a non-issue.” Gap Inc. has eliminated performance ratings in HQ and Distribution/Call Centers, and is in the process of expanding this change to stores in several brands. Eliminating performance ratings, which can have gender biases baked into them, does not mean that Gap Inc. has walked away from a focus on performance against goals. They established a Company performance standard and encourage managers to have more frequent and honest touch-base conversations about performance against goals. A team from Stanford recently analyzed the language of hundreds of performance reviews from technology and professional-service firms and found that managers are significantly more likely to critique female

13 Peter Pawlick. Personal Communication, October 17, 2016. 14 To determine contribution level, Gap has a methodology to level jobs looking at characteristics such as leadership, functional knowledge, area of impact, interpersonal skills, etc. These characteristics are then scored and ranked to drive the contribution level. There is inherently some subjectivity in this process. 15 Mercer. (2016). When women thrive, businesses thrive.

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GAP INC. 6

employees for coming on too strong. In addition, women’s accomplishments are more likely to be seen as the result of team—rather than individual—efforts.16 Gap Inc. does not require that applicants provide previous salary information when submitting an employment application. One positive outcome is that for applicants who have been unfairly compensated for their skill and experience in prior positions, their new salary is not anchored to the past. The impact of this hiring policy has been most pronounced among women and minorities.17 Typically at Gap Inc., applicants choose to provide salary information and it is discussed during the hiring process, potentially used as a factor in salary negotiations. Also, Gap Inc. publishes the company’s compensation practices on GapWeb (the Company’s intranet site), which employees can access to understand the company’s pay practices. However, while managers receive pay data for employees on their team, employees can’t see specific pay ranges unless their managers choose to provide them with that information.

The Business Case for Gender Pay Equality Art Peck, CEO of Gap Inc., says other companies are realizing that recruiting and retaining more women capitalizes on talent and produces a win-win, because diverse teams result in stronger financial performance. Morgan Stanley’s 2016 report “Why it Pays to Invest in Gender Diversity” reveals that higher gender diversity translates to increased productivity, greater innovation, better decision making, and higher employee retention and satisfaction. Companies with more diversity tended to have a higher level of forward one-year return on equity (ROE), on average 0.7% better than their regional sector peers and 1.1% above those with low representation of women in the workplace.18 Simply put, Peck says, “What’s good for women is good for business.” Achieving equal pay at the organizational level signals more equal female representation at higher levels of the company. Evidence is becoming clearer that gender diverse teams and women in leadership make business sense by creating teams with a higher level of collective intelligence and skills. Diverse teams are smarter, more effective,19 and more creative.20 Indeed, gender diverse workforces perform better financially: a 2015 McKinsey study found that companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry means.21 Research continues to accrue regarding the business benefits for women in leadership positions. Companies with more women in executive management have been shown to financially outperform companies that have no women in senior roles. According to a U.S. study, Fortune 500 companies with the highest representation of women on their top management teams experienced better financial performance on measures of ROE (35.1% higher) and Total Return to Shareholders (34% higher) than

16 R. Silverman. (2015). “Gender bias at work turns up in feedback.” Wall Street Journal. Retrieved from http://www.wsj.com/articles/gender-bias-at-work-turns-up-in-feedback-1443600759. 17 (2016). Leave no one behind: A call to action for gender equality and women’s economic empowerment. United Nations Secretary General’s High-Level Panel on Women’s Economic Empowerment. Retrieved from http://www.womenseconomicempowerment.org/reports/. 18 Morgan Stanley (2016). Why it Pays to Invest in Gender Diversity. https://www.morganstanley.com/ideas/gender-diversity- investment-framework 19 A. Williams. (2010). Evidence for a Collective Intelligence Factor in the Performance of Human Groups. Science, 330: 686 20 J. Marinova, J. Plantegna, and C. Remery. (2016). Gender diversity and firm performance: evidence from Dutch and Danish boardrooms,” The International Journal of Human Resource Management, 27/15: 1777-1790. 21 (2015). Diversity matters. Mckinsey & Company.

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GAP INC. 7

companies with the lowest women’s representation.22 Recent data from the International Monetary Fund (IMF) (2016) reveals that the more women in senior managerial positions and in corporate boards, the more profitable firms are.23 Further, firms with a larger share of women in senior roles have a significantly higher return on assets (ROA), even within narrowly defined industries.24 At the very top, the correlation between women at the C-suite level and firm profitability is demonstrated repeatedly, and magnitude of the estimated effects is not small: A profitable firm at which 30% of C-suite leaders are women could expect to add more than 1 percentage point to its net margin (which represents a 15% boost to profitability) compared to otherwise similar firms with no female leaders.25 Other companies, whose leaders recognize that doing the right thing is also good for business, are acting to reduce gender inequality. Marc Benioff, Co-Founder and CEO of Silicon Valley tech giant Salesforce, launched Women Surge in 2013 with the goal of achieving 100% equity for men and women in pay promotion and requiring meetings to include 30% women.26 HeForShe, a global movement that engages men for gender equality, has ten CEO Corporate Champions spanning ten industries, who employ more than one million people and have committed to accelerate progress towards parity in their workforce.27 Equal Pay Barriers Various factors inhibit women from entering the workforce—particularly full-time jobs—and impact their ability to advance. Cultural and Societal Barriers Many women who participate in the job market tend to self-select for lower paying, part-time, or flexible jobs—or stay out of the job market—largely due to unpaid care responsibilities and domestic work. Part- time work enables flexibility but often at the cost of lower hourly pay, reduced access to social protection, and weakened long-term career prospects.28 In this vein, women face a “motherhood penalty,” a difference in earnings between women with and women without children, that can be quantified. This results from attempts to balance work and family responsibilities that may involve part-time employment or career breaks. For the OECD countries, the gender pay gap increases steeply during childbearing and childrearing years.29 A business poll of the

22 Catalyst.org. (2004). The bottom line: Connecting corporate performance and gender diversity. 23 IMF. (2016). Unlocking female employment potential in Europe: Drivers and benefits. 24 L. Christiansen, L. Huidan, J. Pereira, P. Topalova, and R. Turk. (2016). Gender diversity in senior positions and firm performance: Evidence from Europe. IMF. 25 M. Noland, T. Moran, and B. Kotschwar. (2016). Is gender diversity profitable? Evidence from a global survey. Working paper, Peterson Institute for International Economics. 26 J. Bort. (2015). This is the woman that convinced Marc Benioff to guarantee equal pay for women at Salesforce. Business Insider. Retrieved from http://www.businessinsider.com/leyla-seka-inspired-benioff-on-equal-pay-2015-4. 27 Corporate Champions include: AccorHotels, Barclays, Koch Holding, McKinsey & Company, PwC, Schneigder Elextric, Tupperware Brands, Twitter, Unilever, and Vodafone. (2016). Corporate parity report. HeForShe. 28 ILO. (2016). Women at work: Trends 2016. J. Kahn, J. García-Manglano, and S. Bianchi. (2014). “The motherhood penalty at midlife: Long-term effects of children on women’s careers.” Journal of Marriage and Family, 76/1: 56-72. 29 OECD. (2012). Lack of support for motherhood hurting women’s career prospects, despite gains in education and employment. Retrieved from http://www.oecd.org/newsroom/lackofsupportformotherhoodhurtingwomenscareerprospectsdespitegainsineducationandemploym entsaysoecd.htm.

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GAP INC. 8

Department for International Development (DFID) in the United Kingdom revealed that the three most commonly cited barriers preventing women from advancing in the workplace were all related to the difficulties of balancing domestic and professional responsibilities.30 There is also some evidence of a premium for men, highlighting a positive relationship between a man’s wage and his number of children.31 Occupational Segregation Academic sorting and choices in education lead to “occupational segregation” when girls become older.32 Although women represent most of those in tertiary education globally, female university graduates remain less likely to receive degrees in scientific, technical, engineering, and mathematical (STEM) disciplines associated with careers in higher paying fields. Women are more likely to work in sectors that have lower average pay. Importantly, occupational choice is affected by social norms (tracing back to academic sorting), stereotypes, lack of role models, and lack of information about opportunities and pay differentials.33 Within all industries, a gender pay gap exists, although with significant variation. Interestingly, female- dominated industries—such as healthcare, social assistance, and insurance services—have particularly high gender pay gaps, likely because a fundamental issue remains that women are clustered in comparatively lower positions even in these industries.34 A study of U.S. census data from 1950 to 2000 found that when women moved into industries in large numbers, companies in those industries began paying less even after controlling for education, work experience, skills, race, and geography. This research demonstrates that when women take over a male- dominated field, pay for an industry drops by up to 57% (as is the case in the field of recreation). On the flipside, female-dominated industries that become dominated by men (e.g., computer programming) see an increase in pay.35 Research highlights that employers placed a lower value on work done by women.36 Employment in Lower-Level Positions Regardless of the sector, women tend to be employed in lower-level positions. There is a persistent gender gap at higher ranks of management and leadership. Data of Fortune 500 companies from 2011 reveal that while women are nearly half of managers, they are only 14.3% of executive officers, 3.8% of CEOs, and hold 16.6% of board seats.37 Occupation is the largest single factor accounting for the gender pay gap, with the second being industry—together they contribute to over 50% of the gender wage gap (see figure 3). Research reveals that the largest gender pay gap is in higher-paying white collar jobs.38 30 DFID. (2016). Women’s economic empowerment: DFID business survey. 31 ILO. (2016). Women at work. 32 S. Doughty. (2015). Why do we have a pay gap? The diversity perspective. Retrieved from http://www.victoria.ac.nz/som/clew/files/3-Doughty-Equal-Pay-Presentation-0515-.pdf. 33 McKinsey & Company. (2013). Women matter 2013: Gender diversity in top management: Moving corporate culture, moving boundaries. 34 Commonwealth Government of Australia. (2013). What is the gender pay gap? Workplace Gender Equality Agency. Retrieved from https://www.wgea.gov.au/addressing-pay-equity/what-gender-pay-gap. 35 R. Oldenziel. (2001). Making technology masculine: Men, women and modern machines in America, 1870-1945. Amsterdam University Press. 36 P. Allison, P. England, and A. Levanon. (2009). “Occupational feminization and pay: Assessing causal dynamics using 1950- 2000 U.S. Census Data,” Social Forces, 88/2: 865-891. 37 (2011). Fortune 500 women executive officers and top earners. Catalyst Census. 38 F. Blau and L. Kahn. (2016). The gender wage gap: Extent, trends, and explanations. IZA, No. 9656. Retrieved from http://ftp.iza.org/dp9656.pdf.

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GAP INC. 9

Lower representation of women at higher levels could be due to limited female talent in the pipeline or barriers that prevent women’s advancement, such as the glass ceiling. These barriers include discrimination, work-family conflicts, and reduced interest in high-level positions. Oftentimes higher- paying white-collar jobs demand longer and less flexible hours resulting in work-family conflicts.39 In addition, several studies find that women are less likely to be promoted, all else equal, while other studies highlight that women instead exit at higher rates by choice.40 Lower proportions of women in managerial and leadership roles further perpetuate pay and promotion gaps, because managers often promote based on those who meet their own characteristics. This trend, known as “ingroup favoritism,” prevents women from climbing up the career ladder in companies where there are not many women in leadership.41 Personal and Psychological Traits Research finds that men place a higher value on money, have higher self-esteem, believe that they control their own fate, and are less risk averse, more competitive, more self-confident, and more disagreeable than women. These traits can contribute towards the pay gap. For example, women are slightly less likely to opt for jobs that include performance pay, as they are less attracted to competitive environments than men, which may decrease their ability to overcome the wage structures that they are already within.42 In addition, women are less likely than men to negotiate for themselves.43 When they do choose to negotiate, one study found that women ask for an average of $7,000 less than the men.44 Also, their managers are less likely to want to work with them due to violating gender norms about appropriate female negotiating behavior.45 Discrimination and Unconscious Bias Unconscious biases are the automatic, mental short-cuts used to process information and make decisions quickly. These biases are based on experience and cultural stereotypes. Unexplained factors contributing to the gender pay gap (or unconscious bias) accounts for 38% of the gender pay gap overall.46 (Exhibit 1)

39 F. Blau and L. Kahn. (2016). The gender wage gap: Extent, trends, and explanations. IZA, No. 9656. Retrieved from http://ftp.iza.org/dp9656.pdf. 40 F. Blau and L. Kahn. (2016). The gender wage gap: Extent, trends, and explanations. IZA, No. 9656. Retrieved from http://ftp.iza.org/dp9656.pdf. 41 “Why the ‘position gap’ is more important than the wage gap for women in tech.” Washington Post. Retrieved on October 12, 2016 from https://www.washingtonpost.com/news/the-switch/wp/2015/04/14/why-the-position-gap-is-more-important-than-the- wage-gap-for-women-in-tech/. 42 A.Manning, and F. Saidi. (2010). “Understanding the gender pay gap: What’s competition got to do with it?” Industrial and Labor Relations Review, 63/4: 681-698. 43 L. Babcock. (2003). “Nice girls don’t ask.” Harvard Business Review. Retrieved from https://hbr.org/2003/10/nice-girls-dont- ask. 44 NPR.org. Why women don’t ask for more money. Retrieved on October 12, 2016 from http://www.npr.org/sections/money/2014/04/08/300290240/why-women-dont-ask-for-more-money. 45 (2016). Leave no one behind: A call to action for gender equality and women’s economic empowerment. United Nations Secretary General’s High-Level Panel on Women’s Economic Empowerment. Retrieved from http://www.womenseconomicempowerment.org/reports/. 46 F. Blau and L. Kahn. (2016). The gender wage gap: Extent, trends, and explanations. IZA, No. 9656. Retrieved from http://ftp.iza.org/dp9656.pdf.

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THE

Chinese Must Go

THE

Chinese Must Go VIO LENCE, EXCLUSION, AND THE MAKING OF THE ALIEN IN AMER I CA

Beth Lew- Williams

Cambridge, Mas sa chu setts · London, England 2018

Copyright © 2018 by the President and Fellows of Harvard College All rights reserved Printed in the United States of Amer i ca

First printing

Library of Congress Cataloging-in-Publication Data

Names: Lew- Williams, Beth, author. Title: The Chinese must go : vio lence, exclusion, and the making of the

alien in Amer i ca / Beth Lew- Williams. Description: Cambridge, Mas sa chu setts : Harvard University Press,

2018. | Includes bibliographical references and index. Identifiers: LCCN 2017032640 | ISBN 9780674976016 (cloth) Subjects: LCSH: Chinese— United States— History—19th century. |

Chinese— Vio lence against— United States. | Border security— United States— History—19th century. | Race discrimination— United States— History—19th century. | Emigration and immigration law— United States— History—19th century. | Aliens— United States— History—19th century. | Citizens—United States— History—19th century. | United States— Race relations— History—19th century.

Classification: LCC E184.C5 L564 2018 | DDC 305.895 / 1073— dc23 LC rec ord available at https:// lccn.loc . gov / 2017032640

Cover photo courtesy of the Oregon Historical Society, image number 28159

Cover design by Jill Breitbarth

In memory of Lew Din Wing

CONTENTS

INTRODUCTION

The Vio lence of Exclusion 1

PART 1 • Restriction

1. The Chinese Question 17 2. Experiments in Restriction 53

PART 2 • Vio lence

3. The Banished 91 4. The People 113 5. The Loyal 137

PART 3 • Exclusion

6 . The Exclusion Consensus 169 7. Afterlives under Exclusion 194

EPILOGUE

The Modern American Alien 235

APPENDIX A

Sites of Anti- Chinese Expulsions and Attempted Expulsions, 1885–1887 247

APPENDIX B

Chinese Immigration to the United States, 1850–1904 253

ABBREVIATIONS 255 NOTES 259 ACKNOWL EDGMENTS 337 INDEX 341

THE

Chinese Must Go

1

INTRODUCTION

The Vio lence of Exclusion

THEY LEFT IN driving rain. Three hundred Chinese mi grants trudged down the center of the street, their heads bowed to the ele ments and the crowd. They were led, followed, and surrounded by dozens of white men armed with clubs, pistols, and rifles. As if part of a grim parade, they were encircled by spectators who packed the muddy sidewalks, peered from narrow doorways, and leaned out from second- story win dows for a better view. One of the Chinese, Tak Nam, tried to protest, but later he remembered the mob answering in a single voice: “All the Chinese, you must go. Every one.”1

The date was November 3, 1885, and the place was Tacoma, Washington Territory. But that hardly mattered. In 1885 and 1886, at least 168 commu- nities across the U.S. West drove out their Chinese residents.2

At times, these purges involved racial vio lence in its most brazen and basic form: physical force motivated by racial prejudice and intended to cause bodily harm.3 The vigilantes targeted all Chinese people— young and old, male and female, rich and poor— planting bombs beneath businesses, shooting blindly through cloth tents, and setting homes ablaze. Once physical vio lence had become a very real threat, the vigilantes also drove them out using subtler forces of coercion, harassment, and intimidation. They posted deadlines for the Chinese to vacate town, leaving unspoken the conse- quences of noncompliance. They locked up leaders of the Chinese commu- nity and watched as the rest fled. They called for boycotts of Chinese workers and waited for starvation to set in. This too was racial vio lence.

While historians often claim that racial vio lence is fundamental to the making of the United States, rarely are they referring to the Chinese in the

Sites of Anti- Chinese Expulsions, 1885–1886. Vigilantes drove out Chinese residents through harassment, intimidation, arson, bombing, assault, and murder. Map based on data collected by the author (see Appendix A).

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Colorado

Idaho Territory

Montana Territory

Nevada

Oregon

Utah Territory

Washington Territory

Alaska Territory

Wyoming Territory

New Mexico Territory

Arizona Territory

INTRODUCTION 3

U.S. West. Instead, they are thinking of moments when racial prejudice fu- eled the vio lence of colonization, enslavement, and segregation.4 It has long been recognized that these transformative acts of racial vio lence anchor not only the history of Native Americans and African Americans, but also the history of the entire nation. Anti- Chinese vio lence, however, is routinely left out of the national narrative.5

It is easy to see this omission as simply due to the relative numbers. There were comparatively few Chinese in nineteenth- century Amer i ca, and fewer still who lost their lives to racial vio lence, making casualty counts from anti- Chinese vio lence appear inconsequential. The 1880 census recorded 105,465 Chinese in the United States; at least eighty- five perished during the peak of anti- Chinese vio lence in the mid-1880s. However, these numbers do not capture the full extent of the vio lence, since some of the most egregious in- cidents occurred before or after this period. In 1871, for example, a mob in Los Angeles lynched seventeen “Chinamen” in Negro Alley in front of dozens of witnesses and, in 1887, the “citizens of Colusa” (California) took a com- memorative photo graph after the lynching of sixteen- year- old Hong Di. Events like these have drawn attention for their exceptional brutality, but often anti- Chinese vio lence was not fatal or recorded. By relying on the metric of known fatalities, historians have often viewed anti- Chinese vio- lence as a faint echo of the staggeringly lethal vio lence unleashed against Native Americans and African Americans.6 When we use black oppression and Indian extermination to define racial vio lence in nineteenth- century Amer i ca, Chinese expulsions seem insignificant. Or, even more inaccurately, they appear not to be violent at all.

The omission of this history can also be explained by the vio lence itself. Chinese migration to the U.S. West began in the 1850s, when thousands of Chinese joined the rush for gold in California. While other newcomers claimed a place in Amer i ca and American history, however, vio lence pushed the Chinese to the outer recesses of the nation and national memory. In Ta- coma, there were no Chinese after 1885 and, thanks to arsonists, there are no physical remnants of what once had been. Indeed, the city of Tacoma, in a present- day effort at “reconciliation,” spent over a de cade searching for de- scendants of the Tacoma Chinese, but has yet to find any.7 Successful ex- pulsions left little behind, even in the way of memories.

Above all, this history has been neglected because it has been misunder- stood. The violent anti- Chinese movement was not a weak imitation of

It was rare for Chinese mi grants to be lynched, and rarer still for a lynching to be photographed. Hong Di was a convicted murderer sentenced to life in prison, but unnamed “citizens” removed him from jail and hanged him on a railroad turnstile. “Hong Di, Lynched by the citizens of Colusa, July 11, 1887 at 1:15 a.m.,” BANC PIC 2003.165. Courtesy of the Bancroft Library, University of California, Berkeley.

racial vio lence elsewhere. It was a distinct phenomenon that must be con- sidered on its own terms. Even without lethal force, anti- Chinese vio lence had profound and lasting consequences, although not the ones we might expect.

What made anti- Chinese vio lence distinct was its principal intent, together with its method and result.

The intent was exclusion. At the local level, anti- Chinese advocates fought to prohibit Chinese from entering spaces and working in occupations deemed the sole entitlement of white citizens. At the national level, they fought to bar Chinese mi grants from entering the United States and to deny citizen- ship to those already in the country. At the international level, they fought to exclude China from the conversation about immigration, hoping to turn a bilateral policy into a unilateral one. Though scholars sometimes separate these demands into disparate strains of racism, nativism, and imperialism, respectively, anti- Chinese advocates rarely drew these distinctions. In their minds, the threat of Chinese immigration demanded exclusion across mul- tiple spheres.

At the time, national exclusion was a particularly radical objective. Al- though border control may seem natu ral and inevitable today, the United States began with a policy of open migration for all. In the early nineteenth century, the federal government was more concerned with attracting “desir- able” immigrants than prohibiting “undesirable” ones. Though individual states sometimes regulated immigrants they deemed criminal, poverty- stricken, or diseased, the federal government was not in the business of border control.8 This meant that there was no need for passports, no concept of an “illegal alien,” and no consensus that the United States should determine the makeup of its citizenry by closing its gates.

Anti- Chinese advocates demanded that the federal government change all this. Chinese exclusion warranted extreme mea sures, they argued, because the Chinese posed a peculiar racial threat to nineteenth- century Amer i ca. Popu lar thought of the day held that the Chinese race was inferior to the white race in most ways, but not all. The Chinese were heathen and servile, but also dangerously industrious, cunning, and resilient. Chinese mi grants hailed from an ancient and populous nation, which Americans granted had

INTRODUCTION 5

6 THE CHINESE MUST GO

once been home to an advanced civilization. Assumed to be permanently loyal to China, the Chinese appeared racially incapable of becoming American. While white citizens worried that Native Americans and African Americans would contaminate the nation, they feared the Chinese might conquer it. One anti- Chinese leader in Tacoma, for example, openly wor- ried that if “millions of industrious hard- working sons and daughters of Confucius” were “given an equal chance with our people,” they “would outdo them in the strug gle for life and gain possession of the Pacific coast of Amer i ca.”9 Therefore, as Americans turned to dispossession, subordination, and assimilation of Indians and blacks in the late nineteenth century, they ad- vocated exclusion for the Chinese. Behind these divergent racial scripts lay callous calculations. White Americans coveted Indian lands and required black labor, but many saw no reason to tolerate the Chinese.10

Not all white Americans agreed, however. In the mid- nineteenth century, many U.S. traders, cap i tal ists, and missionaries saw Chinese migration as key to American profits and power. Businessmen eyed luxurious Chinese products and vast Chinese markets, while Protestant missionaries saw an op- portunity to convert “heathens” on both sides of the Pacific. In the minds of cosmopolitan expansionists, American people and goods crossing the Pacific would extend U.S. power abroad, while the reverse movement of Chinese mi grants would accelerate the development of the West and strengthen U.S. claims on China.11 Envisioning Amer i ca’s future beyond the Pacific Ocean and the rewards they personally would reap, these influ- ential elites strongly opposed the movement for exclusion. This re sis tance, however, only emboldened the movement’s advocates and drove them to more dramatic tactics later in the nineteenth century.

The principal method of anti- Chinese vio lence became expulsion. Since their arrival in the 1850s Chinese mi grants had been popu lar targets for harassment and assault, but systematic expulsion became the method of choice by the 1880s. In western states and territories (where 99 percent of Chinese resided), vigilantes used boycotts, arsons, and assaults to swiftly remove the Chinese from their towns and prevent their return.12 And while the campaigns to drive out the Chinese sometimes produced casual- ties, these were rarely by design. Two men died on the forced march from Tacoma, but according to Tak Nam, the deaths did not directly result from physical assault. At a redress hearing following the expulsion, he described

how the crowd used clubs, poles, and pistols “to shove[] us down” and “drive us like so many hogs.” It was in this context that, after an eight- mile forced march and a night “in the drenching rain,” “two Chinamen died from exposure.”13

Though the vigilantes set their sights on ridding themselves of Chinese neighbors, the expulsions were not simply local means directed toward local ends. Using sweeping rhe toric and direct petitioning, vigilantes translated their vio lence into a broader cry for exclusion. Anti- Chinese vio lence, in other words, was a form of po liti cal action or, more specifically, what could be termed “violent racial politics.” By directing racial vio lence against local targets, vigilantes asserted a national po liti cal agenda. These vigilantes, of course, lacked the power to determine U.S. law or diplomacy; a host of po- liti cal forces and contingent events created the ultimate policy of exclusion. But the vigilantes made Chinese exclusion pos si ble, even probable, when their violent protests drew the national spotlight. The federal policy of Chi- nese exclusion, touted as a solution to Chinese migration, was also designed to combat the more immediate threat of white vio lence.

That vio lence held power over U.S. politics in the nineteenth century should not come as a surprise. Transformative moments of state vio lence— including the Mexican- American War (1846–1848), the Civil War (1861– 1865), and the Indian Wars— clearly mediated politics through force, but so too did a host of extralegal battles. Violent racial politics swelled in popu- larity in the Reconstruction South and in western territories where white citizens lacked more recognized forms of po liti cal power. This racial vio lence terrorized local populations, shaped local politics, and, at times, advanced a national agenda. In the mid- nineteenth century, po liti cal vio lence, and the rhe toric that accompanied it, challenged the federal government’s reserva- tion of Indian lands, enfranchisement of African Americans, and toleration of Chinese migration. By the century’s end, the federal government had ac- quiesced to violent demands for Indian dispossession, black oppression, and Chinese exclusion.14

The principal result of anti- Chinese vio lence was the modern American alien. The term “alien” has long referred to foreigners, strangers, and out- siders, and in U.S. law has come to define foreign- born persons on American soil who have not been naturalized. Admittedly, “alien” has become un- pleasant or even offensive to our modern ears, and recently scholars and

INTRODUCTION 7

journalists have begun to replace it with “noncitizen.” This more neutral alternative, however, is too imprecise for the subject at hand. In the nine- teenth century, the term “noncitizen” would have encompassed a large and diverse group, including, at vari ous times, slaves, free blacks, Native Ameri- cans, and colonial subjects.15 We cannot simply do away with the word “alien,” therefore, since it offers historical accuracy and specificity. In this book, the term is used cautiously to describe a par tic u lar legal and social status, not an intrinsic trait. The Chinese entered Amer i ca as mi grants and were made into aliens, in law and society. Through a halting pro cess of ex- clusion at the local, national, and international levels, the Chinese mi grant became the quin tes sen tial alien in Amer i ca by the turn of the twentieth century.16

At the local level, vio lence hardened the racial bound aries of the U.S. West. Men like Tak Nam had established themselves in polyglot communi- ties, living and working alongside white and Native Americans. He had resided in Tacoma for nine years before his expulsion, and in the country for thirty- three. Then vio lence made neighbors into strangers, figuratively and literally, as vigilantes disavowed any connection to the Chinese and drove them into unfamiliar surroundings. In addition to killing scores in the mid- 1880s, the vio lence displaced more than 20,000. In the pro cess, it acceler- ated Chinese segregation in the U.S. West, spurred a great migration to the East, and hastened return migration to China.17

As violent racial politics removed Chinese from local communities, it proved similarly effective at excluding them from the nation. Before the out- break of vio lence in 1885 and 1886, Congress attempted to balance com- peting demands to close Amer i ca’s gates and open the door to China. In 1882, American leaders created a temporary bilateral compromise: a law known as the Chinese Restriction Act. Only after the law’s public failure and the ensuing vio lence did Congress turn to a long- term policy of unilat- eral “Chinese exclusion” in 1888. The change in nomenclature signaled a major shift in law, enforcement, and intent, as Congress narrowed the ave- nues for Chinese migration, dedicated more resources to enforcement, and expanded U.S. imperialism in Asia. Historians, with their eyes trained on what Chinese exclusion would become, have overlooked the distinction between the Restriction Period (1882–1888) and Exclusion Period (1888–1943). To understand the radicalism of Chinese exclusion and the contingent

8 THE CHINESE MUST GO

history of its rise, we must recognize the period of restriction, experimenta- tion, and contestation that preceded it.18

Together, the restriction and exclusion laws dissuaded untold thousands of Chinese mi grants from settling in the United States and, by separating men from women, stunted the growth of an American- born Chinese popu- lation. With time, Chinese exclusion became Asian exclusion as policies first practiced on the Chinese provided a blueprint for laws targeting Japa nese, Korean, South Asian, and Filipino mi grants in the early twentieth century.19 As a consequence, in 1950 these groups made up only 0.2 percent of the U.S. population; even in the twenty- first century, only a small fraction of Asian Americans can trace their American roots back more than one generation.20 We can appreciate the significance of exclusion if we imagine what could have been.