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There have been tremendous efforts to address the gender-based pay gap in employees across the world. However the disparity between what men make and what women make still persists. Employers should understand what to do to close in on this gap.
The pay gap between men and women varies across the world. Over the recent years, there have been tremendous efforts to address the gender-based pay gap in employees, which has narrowed. However, the disparity in pay between men and women persists across all industries in all countries.
For instance, a 2019 survey by U.S Census Bureau showed that the national median salary for civilians who worked full-time in a year was $53 544 for men and $43,394 for women. More statistics show that the average salary in the U.K was 33,400 GBP for men and 28,300 GBP for women in 2021, depicting a difference of over 5,000 GBP.
The gender pay gap is the average difference in earnings or remuneration between men and women working full-time or part-time. According to the UN, women make 77 cents for every dollar men earn globally.
Before we get into more details, it’s essential to understand and distinguish terms such as wage differential and discrimination.
Wage differentials refer to the wage difference between workers with different skills in the same industry or workers with comparable skills in various industries or localities. It’s common across all occupations, and certain factors contribute to it. They include experience, credentials, job tasks, employers, demand and supply of workers, etc. Wage differential has economic and social significance, and it’s often justified.
Wage discrimination is when employees with the same qualifications and who perform similar roles are not paid the same based on race, gender/sexual disposition, religion, age, ethnicity, nationality, and marital status. While no society is free from this discrimination, most countries worldwide have laws or acts prohibiting pay/wage discrimination.
Below are factors contributing to the gender wage gap globally:
Location is one factor contributing to the global gender wage gap. Experts often say that in regions where earnings are low across the board, there is a likelihood of slim gender gap pay than in high-income areas. Why? Low-income regions have minimum job opportunities (high unemployment rate) for both men and women. Therefore, a job is a job, and pay tends to be fair for both genders.
For instance, in the U.S, in states such as Utah, where the unemployment rate is at 2.7%, the gender pay gap is relatively high, above $15,000. Conversely, Puerto Rico, which had an unemployment rate of 8.27% in 2021, showed the lowest wage gap, with the median earning being $23 478 for men and $22 804 for women. Africa isn’t an exception. In countries such as Kenya, which had an unemployment rate of 5.73% in 2020, women earn 20% less than their male counterparts.
According to the Workplace Gender Equality Agency (WGEA), the gender pay gap is 2.5% for employees under 24 years old. Notably, it increases constantly before peaking, hitting over 30%, with a difference of around $40,000 annually for employees ages 45 to 64. Further, QWI data presented in January 2022 by the U.S Census Bureau showed that women in the U.S earned 30% less than men and that the pay gap increased with age.
Generally, when women start their careers between 18 and 24, they often earn close to what men make. However, as women grow old, the wage gap increases. Notably, an enormous gap is seen at over 45, where a significant difference in earnings is experienced.
Also, as women grow old, they start families and give birth, where caregiving roles may suppress their earnings. Why? Most childcare responsibilities disproportionally fall to women; thus, they’re likely to take some time out of work or postpone advanced opportunities.
Segregation as a factor contributing to the gender pay gap in the workforce may refer to two key aspects, i.e., unequal sharing of earning responsibilities or roles and women working in low-paid sectors.
First, there is an assumption that part-time jobs are “naturally less senior” and thus less paid. Part-time jobs are often positioned as “women’s choice,” even for remote work roles. More importantly, the highest-paid occupations require long working hours, which are incompatible with most women's gendered family responsibilities. These societal norms contribute to a significant number of women earning less than men.
According to the European Commission, more women than men graduate from universities in Europe, but due to care responsibilities, they don't feel as accessible as their choice of job or don't get the same opportunities as men. Consequently, they are more likely to work part-time jobs.
Secondly, according to an Economic Policy Institute (ECP) report, many professions dominated by women are low-paid, and professions that have become female-dominated have become lower-paid. The report cites an example of computer programming, which was initially a female-dominated field before it evolved into a more technically demanding occupation. It’s now a lucrative yet male-dominated profession. On the other hand, when more females became park rangers, pay in the field dropped.
But is the narrative related to some of the above claims changing in our society? Research showed that over half of young fathers in the U.K would take a pay cut to work less and spend more time with the family. This issue remains entirely subjective and debatable.
Wage discrimination is another leading factor contributing to the gender pay gap. In some cases, employers may discriminate against female employees based on gender, whereby they’re paid lower than females despite working in the same role. It also entails valuing women’s skills lower than those of men.
Women of races experience the negative impact of the pay gap. However, race as a form of bias contributes to the overall gender pay gap for women of colour. This one is one important dynamic most studies miss out on.
According to a study by the Women’s Foundation in collaboration with the Women’s Foundation of Minnesota, it was clear that racial pay disparities compound the gender gap. It showed on average, a white woman in Minnesota earned $0.78 for every dollar earned by a white man, but Latina, Native American, and Black women earned substantially less.
According to the data on Payscale’s 2022 State of the Gender Pay Gap Report and research by an HR software provider, Cipher, some occupations had extremely high gender pay gaps in favour of men and others in favour of women. 2022 State of the Gender Pay Gap Report
According to the data presented by the U.S Department of Labor, Yahoo Finance, and Havelife, it’s evident that some occupations have a smaller gender pay gap. Additionally, other occupations show a relatively closed gender gap when compensable factors are controlled as outlined below:
Globally, men earn approximately 13% to 30% more than men. However, the gender wage gap in Africa is more significant. The International Labour Organization (ILO) outlines that the median monthly income of men is twice that of women in Sub-Saharan Africa. Additionally, a study by the World Bank Group showed that the average income of female entrepreneurs was 2/3 that of male entrepreneurs.
UN Women outlines issues such as occupational segregation, lack of social protection, and discrimination as some of the causes of the gender pay gap in Africa. Additionally, women in Africa are often trapped in low-paid, poor-quality work, whereby about 89% of women’s jobs in Africa are informal.
Employers must address the gender pay gap issue to achieve equitable working conditions and fair pay for male and female workers. Below are ways to narrow the gender pay gap:
Raising the minimum wage would be transformative action to address the issue of the gender pay gap, wealth gap, and racial disparities related to pay. It also means that women are overrepresented in low-wage occupations and would see an increase in what they take home.
Employers ought to ensure that women workers have equal opportunities as men to accelerate their careers and to be appointed or promoted to managerial roles. As a result, this could help improve women's representation and reduce gender biases in top-level managers' decisions.
The easiest way for employees to know they’re being compensated fairly and equally, depending on their roles, is by letting them know how much their peers earn. Knowing how promotions are given in an organization is equally important for employees.
Employers often ask potential employees about their salary history with previous jobs and use such hiring techniques to justify low pay. It also makes women push back from negotiating.
Instead, employers should clearly communicate their salary range for specific roles. More importantly, they should state whether the salary for the position is negotiable.
Over the years, unions have shown an impact in narrowing the gender gap pay due to the equitable pay practices they often advocate for. Among other benefits of unions is their grievance procedure in case union members experience discrimination.
Governments of various countries should have laws and policies that enforce pay equity for all employees through their relevant agencies. It would create a better framework to address the gender pay gap.
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