This file was prepared for electronic distribution by the inforM staff. Questions or comments should be directed to inform-editor@umail.umd.edu. Chapter 5 THE ECONOMIC AND SOCIAL COSTS OF SEXUAL HARASSMENT INTRODUCTION Although it is widely acknowledged that sexual harassment is costly to our society, there have been few attempts to capture and describe the nature and extent of those costs. The study of sexual harassment in the federal workforce conducted by the U.S. Merit Systems Protection Board in 1987 concluded that sexual harassment cost the government $267 million over a two year period. (1) A 1988 study of Fortune 500 companies found that sexual harassment cost a typical company $6.7 million annually. (2) These cost figures are large and therefore impressive. However, two principal shortcomings of these studies are their limited definitions of costs (primarily lost productivity and turnover) and their exclusive focus on the costs of sexual harassment to employers. The Task Force believed that it was important to explore a broader range of costs from the perspective of individuals who were subjected to harassment for two reasons. First, this would put a human face on the problem and describe the costs of harassment in a way to which other individuals could relate. Second, this analysis could capture the economic, emotional and social price from the victim's experience. To accomplish this goal the Task Force, in conjunction with the State Division of Human Rights (DHR), devised a survey to measure the financial and emotional impact of sexual harassment on individual victims. (See Appendix F.) The survey collected information in four primary areas: * descriptive information of the individuals involved and the specific events; * employment circumstances of the victim; * financial indicators associated with the alleged sexual harassment; and, * non-economic effects of the harassment on the victim. The survey was distributed to two groups of sexual harassment victims: victims who met with or testified before the Task Force, and those who filed sexual harassment complaints with DHR in 1992. THE VICTIMS' EXPERIENCES All these costs, over five years in the legal system, and still no end in sight... The victim continues to suffer emotionally, physically and financially while the lawyers and doctors all get rich on other people's misery! -Victim of sexual harassment In public meetings, roundtable discussions and through survey responses, the Task Force heard personal stories from victims of sexual harassment about the economic and social costs of harassment that they and their families have paid. For most, the experience of the harassment was only the beginning. In the months and years afterward, the economic losses mounted: loss of raises and promotions, loss of a job, inability to find another one, loss of health insurance and pension benefits. The economic costs accumulated: bills for therapy and doctor's visits, and bills for lawyers. There were also considerable social costs: personal stress, strain on family relationships, loss of long-time work colleagues and the loss of self-esteem. The following accounts are drawn from public testimony before the Task Force and from private discussions with victims and their advocates, as well as responses to the surveys distributed by the Task Force. ECONOMIC COSTS Victims of sexual harassment told the Task Force they began to experience economic costs almost from the moment they resisted sexual harassment or reported it to supervisors. These costs usually started with lost promotions, raises, commissions, training, transfers, professional memberships or other opportunities within the company where they were working. For example, a real estate sales associate who reported being harassed by her company's owner said that after she resisted, "sales and listings were taken from me, real estate referrals were denied me and commissions were taken from me." Another victim said, "I left a permanent civil service position since it was clear that I would be denied a promotion due to my reports of sexual harassment." While many attributed these losses to direct retaliation by superiors who were the harassers, other victims said they were subjected to what they perceived as company-wide "blacklisting" in which they were labeled as troublemakers and found their careers dead-ended. For example, a secretary at a large company stated she continued to experience this kind of situation even after her harasser was given early retirement: Although this man has been gone for over three years, because I chose to stand up and fight, rather than keep quiet or quit my job, I continue to be retaliated against in the form of denial of interviews, transfers, pay increases and equal opportunity employment. A 62-year old financial writer provided a vivid portrait of what happened nine days after she reported a sexually-harassing environment in her workplace: I was downgraded and told I was to receive a zero-percent salary increase. (I was the only one in the division who did not receive a 5 percent raise.) That was the beginning of a humiliating year-long constructive discharge which included a change in title, loss of my window office, reduction of my responsibilities and other painful acts of retaliation that continued right up to my firing...For the last two months, I was assigned a menial job in a cold, isolated storage room that was not protected by the company's security system. This room had been burglarized during lunchtime at the Christmas holidays. While some of these victims of sexual harassment stayed at the workplaces where the harassment occurred, many either resigned or were forced out. When they began to look for new employment, they encountered a variety of problems, including lack of good references from their previous job and attempts by their harassers to deny them new employment. Many reported they were out of work for months and ended up accepting employment that did not pay as well. "I went out to look for another job," explained one victim. "I went in to fill out an application, and I could not write the name of this company as a reference." Another victim, who left a $45,000-a-year job in an upstate community because of persistent sexual harassment, said she found that "[c]hanging companies in a small town is just like starting over again." She earned $23,000 one year and $8,000 the next, adding that "I have been reduced to the brink of bankruptcy and the threat of losing my home." One woman reported "as a result of filing this (discrimination) lawsuit, nobody will give me a job." She heard from a friend that a prospective employer "would not hire me because of the lawsuit and did not care what my performance record was, even if I would walk on water." The victims who resigned from their jobs reported they could not collect unemployment while looking for new positions. One said she ended up on welfare. Others totally depleted their savings accounts and borrowed money. While struggling with sharply reduced incomes, these victims of sexual harassment began to see their bills increase, reflecting the costs of lawyers hired to pursue lawsuits and doctors and therapists helping them cope with physical and emotional consequences of the harassment. One woman reported, I have depleted all my savings as a result of this lawsuit. Since I have to pay my attorney as we progress, I have presently paid somewhere in the vicinity of $13,000. My medical bills have been over $9,000. She spoke of "many sleepless nights trying to figure out how I was going to come up with the money. A 33-year-old victim stated: I had to sell my home at an estimated loss of $30,000 due to my reduction in salary. I was unable to pay for my daughter's college education and she was forced to withdraw from school. SOCIAL COSTS The mental emotional and physical costs of pressing a sexual harassment lawsuit are even dearer than the financial costs. One woman told the Task Force in her survey response, I found that it is a terribly traumatic experience to endure prolonged retaliation, a climactic firing and the filing of a lawsuit against a powerful company. Psychologically, I was affected by a sense of powerlessness and anger over unjust treatment and betrayal by senior managers I had trusted. This assessment was seconded by many of the victims who contacted the Task Force. All spoke of experiencing severe stress that negatively affected their work, their self-esteem and their family relationships. Many sought medical treatment and therapy. "At night, I had and still have nightmares," said a 24 year-old deli clerk who reported being harassed by her boss and workers. "I was a nervous wreck at work. I cut one of my fingers on a knife; I would miscount money, drop things. I always felt I didn't know what they were going to do next." A secretary used the Task Force survey to describe the stress of working for 31/2 years for a sexual harasser: Sleepless nights, and day after day of threats and torment from my harasser left me totally devastated, hoping the Lord would take me during the night so I would not have to face another day of the torture. When I got home from work I was so exhausted that I did not want to eat and would collapse on the sofa. Some victims also reported living in fear of their harassers. One 32 year old female production supervisor who was harassed by a male subordinate found out he had a history of violent behavior. As a result, she said, I constantly looked behind me everywhere I went, plus took extra precautions to make sure my daughter wasn't hurt...I worried he'd come and hurt us or do something in retaliation. I later found out he was fired nine months later for punching a co-worker in the face. Some of the victims reported physical manifestations of their stress, including stomach problems, loss of weight and loss of sleep. A 23 year old woman blamed harassment for "making me physically ill and dreading going into work each day." Others spoke of the effect the harassment had on their professional self-confidence and career plans. A graduate student in physics, one of few women in her field, reported that after her advisor began to sexually harass her, Some days as I drove to campus, I began to cry so hard that I had to turn around and go home. I lost all self confidence in my scientific abilities and last summer worked as a food vendor, instead of working in a research lab as I had for the past several summers. The experience ultimately prompted her to give up plans for a career in physics, a field in which she expected to encounter future harassment because it is "dominated by middle-aged men." A number of the sexual harassment victims described the strains their experience placed on family relationships: * I would call my grandmother at 2 a.m. and cry into the phone. My friends and family were very supportive, but it was a stressful angry and bitter time for all of us. * My husband and mother had to endure my health deteriorating as well as my sobbing episodes and angry outbursts. It affected what should have been happy moments in my life and marriage. * I cried non-stop and I would not even perform the simplest of tasks at home. My family did not know how to help me. The victims also reported the loss of friends at work. Those who remained on the job said they often were "ostracized" by co-workers who either disagreed with the sexual harassment charges or were afraid to be associated with the victim for fear they, too, would experience retaliation. One woman reported: The sexual harassment had a devastating effect on my friendships. People that I thought were my friends treated me like a leper. No one wanted to associate with me...It was as if I had been stabbed in the heart. It hurt so bad I cried. Another said: Most of my colleagues felt that what I had claimed was true, however, I should not have "tattled" on him. The majority of the staff shunned me. I was treated as if I had broken the law, not he. Several of the victims who responded to the survey reported another very significant loss which had not been anticipated by the survey questions: time. Explained one woman: An incredible amount of time went into "fighting back" - putting together a complaint and describing every incident. There were so many meetings with the affirmative action officer. Another victim spoke of: time spent worrying and fretting trying to decide whether to ignore the problem, to let the next woman fight it, before deciding to blow the whistle. Time spent in selecting a lawyer, in case preparations, in gathering evidence to satisfy document requests. In the entire process of pursuing her sexual harassment complaint, she said,~"Time is the one irreplaceable loss." THE STATE DIVISION OF HUMAN RIGHTS' ANALYSIS OF COMPLAINANTS' RESPONSES SURVEY METHODOLOGY The Sample The survey developed by the Task Force and DHR was distributed to 300 individuals who filed sexual harassment complaints with DHR in 1992. The complainants' responses were then analyzed by DHR staff and students at the Robert F. Wagner School of Public Service at New York University. When the survey was distributed in February 1993, none of these cases had been fully processed. Each was in the preliminary stage of the investigation process, and, therefore, the cases are "alleged" cases of harassment for which probable cause had not yet been determined. (3) Of the 300 individuals to whom surveys were distributed, 84 responded. The following are the criteria met by each participant: * filed with the New York State Division of Human Rights; * alleged sexual harassment in a workplace setting; * made charges during 1992; * did not resolve their cases prior to December 1992; and, * voluntarily and anonymously responded to the survey. Descriptive Information This section formed a profile of the alleged harasser, complainant and the context of their relationship. It requested information on: SEX of both complainant and alleged harasser RACE of both complainant and alleged harasser AGE of the complainant OCCUPATION of the complainant as categorized into eight job classifications MARITAL STATUS of the complainant RELATIONSHIP of the complainant to the alleged harasser (superior, subordinate, and/or colleague) INCIDENTS of harassment alleged by the complainant Employment Circumstances This section captured information regarding the impact of the alleged harassment on the complainant's work environment and conditions. It solicited data on: TENURE of complainant with organization both prior to and following alleged harassment ABSENCES of complainant due to alleged harassment IMPACT on complainant in terms of productivity and advancement due to alleged harassment WORK STATUS of complainant due to alleged harassment (termination, resignation, retention) Financial Indicators This section captured information regarding the financial consequences of the alleged harassment. It included questions about: LIFE INSURANCE lost by complainant due to alleged harassment HEALTH BENEFITS lost by complainant due to alleged harassment PENSION PLAN lost by complainant due to alleged harassment SALARY changes of complainant due to alleged harassment through change of job or demotion UNEMPLOYMENT benefits collected by complainant due to alleged harassment SAVINGS depleted by complainant due to alleged harassment DAY CARE lost by complainant due to alleged harassment LEGAL COSTS incurred by complainant due to alleged harassment MEDICAL COSTS incurred by complainant due to alleged harassment THERAPY COSTS incurred by complainant due to alleged harassment Non-Economic Costs The final section of the survey captured information regarding the emotional and physical effects of the alleged harassment. It included questions about: RELATIONSHIPS of the complainant to friends and family affected by the alleged harassment AILMENTS of complainant due to alleged harassment PSYCHOLOGICAL impact on complainant due to alleged harassment SURVEY RESULTS There is not a universal profile which can be used to describe the alleged incidents of sexual harassment. Sexual harassment occurs in a variety of settings with little regard for occupation or gender. The descriptions that follow do not necessarily reflect trends of sexual harassment in the workplace, but represent the experiences of the participants of this survey. What are the characteristics of sexual harassment in the work place? In order to measure the data, the analysts categorized the incidents into seven groups. Many of the case descriptions included more than one form of harassing behavior. In these instances, the cases were assigned to several categories. The descriptions for each category are examples provided by claimants in their own words: ADVANCES I was often asked to go out to dinner and constantly subjected to hugs. REMARKS "Do you spit or swallow?"~ he told me to "keep [your] big breasts off [me]"; he referred to his penis in size GESTURES He would lick his lips suggestively; the director would stare at me TOUCHING Grabbed me and told me he was sexually attracted to me; touched my breasts; put his hand on my hind end MATERIAL He showed me a baby picture of himself with a big penis; I was sent computer messages asking if I swallowed it FAVORS If I wanted a raise, I would have to give him a blow job; I would get a raise if I raised my skirt FORCE Touching became progressive and climaxed at him forcing me to perform oral sex As the chart which follows indicates, the harassing behaviors most frequently reported were remarks, which were experienced by 73% of the complainants. The second largest class of harassing behaviors was touching, which was reported by 42% of the complainants. The third type of behavior was advances, which were reported by 26% of the complainants. The remainder were split among the other four categories. The majority of the complainants reported more than one form of harassment, with some experiencing as many as three or four forms. [chart unavailable in electronic format] The duration of the harassment varied significantly from case to case. One individual experienced alleged harassment for almost 10 years while another was allegedly harassed on a job interview. The average length of alleged harassment endured was 13 months. What are the Characteristics of Complainants and Alleged Harassers? In the sample, 92% of the complainants were women and 8% were men. On the other hand, 86% of the alleged harassers were men while, 14% of the harassers were women. Harassment did not occur exclusively between men and women. In some cases, it occurred between people of the same gender. The average age of the complainant was 34 years old. However, the range of ages was quite large. The youngest victim was 19 years old and the oldest victim was 64 years old. For 78% of the cases, the complainants alleged that they were harassed by someone in a position of authority. These results indicate that the majority of sexual harassment centered around quid pro quo harassment. However, sexual harassment among colleagues and from subordinates did occur. Almost 14% of those reporting instances of harassment indicated that colleagues were alleged harassers. An additional 2.5% indicated that they were being harassed by subordinates, and the remainder stated that they were being harassed by some combination of superior, colleague and subordinate. Who was the harasser? Third Party 1% of responses Sup. Coll. Sub. 1% of responses Sup. & Coll. 4% of responses Subordinate 2% of responses Colleague 14% of responses Superior 78% of responses Within the sample, the majority of the complainants alleging sexual harassment were split among three occupational categories: administrators and managers; office and clerical workers; and service and maintenance workers. The chart below demonstrates the percentages of individuals within each category. Twenty-nine percent of the complainants were in managerial or administrative positions at the time of the alleged harassment. The second largest group was service and maintenance workers, who comprised 27% of the sample complainants. The third largest group, comprising 24% of those reporting, was office and clerical staff. The remaining five categories included professionals, technicians, protective service workers, paraprofessionals and skilled crafts people. [chart indicating occupations of respondents unavailable in electronic format] FINANCIAL COSTS There are two primary types of costs incurred by victims of sexual harassment: lost benefits and direct expenses. Lost Benefits The survey collected information on benefits that people lost as a result of the alleged harassment. The benefits lost included jobs, salaries, health benefits, life insurance plans, pensions, additional or other benefits, day care and advancement opportunities. The most common lost benefit was loss of one's job. Of those responding, 86% no longer were employed by the organization in which the alleged harassment occurred. Forty-five percent of the participants resigned, some indicating that they were forced to resign. Forty-one percent were terminated by their employer. Only 14% remained in their positions. For those who changed jobs, the average interim between the job where alleged harassment occurred and a new position was six months. Closely related to the loss of job is the effect on salary. Frequently, individuals who resigned or were terminated accepted new positions which paid less than their previous jobs. Only 7% of the participants earned more money in their new positions. Twenty percent of the participants indicated no change in salary as the result of the change in jobs. The remaining 73% experienced a decrease in salary, as a result of the job change. The average salary change was an annual loss of $10,596. The survey also measured information on the number of people who lost health benefits, life insurance, pensions or other benefits as a result of the alleged harassment. Participants were asked to estimate the monetary loss of each benefit. Although most people knew whether or not they lost benefits, many did not estimate the value of these losses. (4) As a result, the information describing the number of people with lost benefits was more comprehensive than the information estimating their worth. The average values of the benefits packages were calculated based on those who estimated values. The averages do not include complainants who did not make estimates. Of those who responded, 45% indicated that they had lost their health care benefits, with an average reported value of $2,652 annually; 37% reported a loss of life insurance benefits, with an estimated average of $53,941; pension benefits were reported lost by 26% of the participants, with an average value of $2,287; and 28% of the individuals responded that they had lost other benefits, with an average estimated value of $1,093. (5) Have you lost benefits? Percent responding positively Other Benefits 28% Life Insurance 37% Pension Benefits 26% Health Benefits 45% A loss or change in job status can affect access to day care arrangements. Fifteen percent of the participants indicated a loss of day care as a result of the alleged harassment. The study also attempted to measure the number of individuals who felt that their opportunities for advancement were diminished because of the alleged sexual harassment. Of the participants, 68% indicated that they believed their advancement possibilities were lessened as a result of the alleged harassment. Direct Expenses In addition to the losses that an individual may have experienced as a result of the alleged sexual harassment, there were also direct costs that were incurred. This survey attempted to measure three types of costs: legal costs, medical costs and therapy costs. In addition, the survey asked complainants to estimate any depletion of savings. Legal expenses were incurred by 32% of the participants, with an average cost of $2,757. It was more difficult to measure medical cost because individuals often indicated that they had medical problems but did not seek help because they did not have the resources to do so. Medical problems were experienced by 54% of the complainants, with an average cost of $2,026. [chart indicating effects of harassment on expenses and savings not available in electronic format] A similar problem existed in attempting to measure the costs associated with therapy. Many individuals indicated that they felt that they would benefit from counseling, but could not afford to seek it. (6) Forty-four percent of the individuals indicated that they received some form of counseling, frequently from clergy. The average cost for therapy was $2,351 per individual, excluding those people who sought free guidance. The average total costs including legal medical and therapy amounted to $2,087. In addition, savings were depleted by 65% of the complainants, with an average depletion of $4,709. (7) ORGANIZATIONAL AND SOCIAL COSTS Organizations also incur costs as a result of sexual harassment. These costs include low productivity, high absentee rates and legal costs. Since these surveys were completed by the alleged victims, not by the employers, it was impossible to fully measure employer costs. However, some losses incurred by the organization could be approximated by information provided by participants. The survey asked employees to estimate the number of days missed due to the alleged harassment and the effect of the harassment on job productivity. The average number of days missed by employees due to alleged sexual harassment was 9.74 days. (8) The costs associated with these absences were not estimated by the individual participants. Productivity was impacted for the vast majority of individuals who reported sexual harassment. Eighty-nine percent of the complainants indicated that their work productivity was negatively affected by the incidents of harassment. Society also bears costs associated with sexual harassment. One of these costs can be estimated from the amount of unemployment insurance collected by complainants. On average, the amount of unemployment benefits received by individuals was $7,446. Unemployment benefits were collected by 57% of those people who left their jobs. The average length of time for collecting unemployment was eight months. In addition to collecting unemployment, seven percent of the individuals indicated that they had collected some other form of compensation, such as Aid to Families with Dependent Children. OTHER EFFECTS OF SEXUAL HARASSMENT ON THE VICTIM In addition to the medical and psychological problems experienced by victims of sexual harassment, harassment can affect other aspects of the victim's life. In this study, 54% of the individuals indicated that they suffered from medical problems and 44% indicated that they suffered from psychological problems as a result of the alleged harassment. In addition, 93% of the participants indicated that the sexual harassment affected their relationships with family members. (9) Similarly, 82% of the participants indicated the alleged harassment affected their friendships both inside and outside the work environment. [chart indicating non-economic costs not available in electronic format] SURVEY LIMITATIONS The inherent drawbacks associated with surveys resulted in a statistical analysis that was somewhat limited. The data collected did not capture a full picture of all of the forms and impacts of sexual harassment. Four types of limitations were identified. Sample Gathering information from complainants at the beginning of the filing process was intended to provide fresher recall and more detailed descriptions. However, because this survey collected data prior to the resolution of cases, it measures the costs of alleged sexual harassment rather than costs of proven harassment. In addition, there is the possibility of further costs not yet accrued at the time of the survey, and therefore unreported. Question Terminology The questions were designed to allow the complainants flexibility and freedom to respond in their own words. As a result, the answers to questions needed to be sorted and classified in the analysis process. Discrete categories were created for each question, and participants' answers were matched with these discrete categories. During this sorting process, the analysts may have misinterpreted the complainants' original answers. Although the format made it difficult to quantify some of the information, the anecdotal information is important to understand the impact of sexual harassment-what it looks and feels like to the alleged victims. Self-Selection The individuals included in this analysis are those who chose to file claims with DHR as opposed to pursuing other external filing options. Furthermore, these individuals voluntarily responded to the survey. As a result, the sample is a statistically biased representation of the general population. The analysis which applies to this sample group cannot be applied to the population to make estimates about the effects of sexual harassment in general. The results of this survey only represent this particular sample. Incomplete Information Individuals frequently did not respond or only partially responded to questions. Therefore, indicators of items such as medical expenses or benefits lost may underestimate total monetary losses. For example, a participant may have indicated that she or he lost a health benefits package but could not estimate the value of the package. It should also be noted that the survey did not directly measure potential costs to the employer resulting from harassment such as low morale, loss of productivity, high absentee rates, high turnover and legal expenses. For these reasons, the total costs and losses due to sexual harassment may be or probably are underestimated in this report. CONCLUSION In order to learn about the full impact of sexual harassment on victims, organizations and society, it is necessary to gather comprehensive and accurate information. This evidence can then be used to impress upon employers and employees alike that sexual harassment is costly. The responses by victims to the Task Force's costs survey eloquently describe the high price they paid when sexual harassment occurred. When this and similar information is disseminated, it should help to convince organizations that the best way to minimize all costs associated with sexual harassment is to prevent it. In response to the limitations of the survey instrument, and to additional issues raised by the responses, several recommendations for additional studies are offered. These include changes in the format of the survey itself such as providing discrete categories for reporting financial information and ordinal categories for reporting impact. Additional areas of study might include attempts by the complainant to seek internal solutions prior to filing a complaint with DHR, and a survey directed to employers regarding their costs. ENDNOTES 1. U.S. Merit Systems Protection Board. (1987). Sexual Harassment of Federal Workers: An Update. Washington, D.C.: United States Government Printing Office. 2. Klein Associates, Inc. (1988). The 1988 Working Women Sexual Harassment Survey Executive Report. Cambridge: Klein Associates Inc. 3. According to Black's Law Dictionary, probable cause is "reasonable cause; having more evidence for than against;...an apparent state of facts found to exist upon reasonable inquiry...which would induce a reasonably intelligent and prudent [sic] to believe that a cause of action existed." H. C. Black, (1979) Black's Law Dictionary, Fifth Edition. St. Paul: West Publishing Company. 4. For instance, one complainant said, "All my benefits are lost and I used up all my savings." She did not indicate the specific amounts of either her benefits or her savings. 5. The absolute average for other benefits lost would have been $16,983. However, this figure included one case with a reported loss of $160,000 which significantly skewed the results. The figure of $1,093 is a more accurate representation of the benefits lost. 6. One participant noted, "Financially, I could not afford the expense of counseling. My physician prescribed a mild tranquilizer to calm me and to help me cope." 7. For instance, one complainant noted, "I drained all my savings to survive." 8. The absolute average number of days absent due to sexual harassment would have been 16.08. However, this figure included one complainant who missed 365 days of work due to the alleged sexual harassment. The results of the survey are better represented by the 9.74 days missed quoted above. 9. This experience was described by one of the participants, "I didn't want to talk to anyone at work or at home. I was raped before, so all this stuff from that job made me go back to not trusting people."