Gender Pay Gap | What is it and How Can We Fix It
Author: Tushita Sinha, April 15, 2019 – Posted in: Human Resources – Tags:

INTRODUCTION

While images of smart, successful women working alongside men are found in abundance, the truth of the workplace and the remuneration lie in conflict with it. In the reports on Gender pay gap thousands of companies file their gender pay gap figures, revealing that on average men are paid more than women. There are various factors that lead to this gap, but let’s first look at what it exactly is.

WHAT IS GENDER PAY GAP?

Gender pay gap ( or wage gap) is the average difference between the earnings of a company’s male and female employees. For instance, a company having a 5% wage gap means that the female employees earn an average of 5% less per hour than men, or in simpler words, the average female employee would make 95 cents to every 1 dollar made by a man. There are two different categories in which this gap is calculated, first being the uncontrolled gender pay gap which takes the ratio of median earnings of all women to all men and the controlled gender pay gap which takes into account a number of factors like job titles, experience, qualification, hours worked and industry.

According to Payscale, in 2019 women earned 79 cents for every dollar earned by men. This figure is representative of the uncontrolled gender pay gap and presents a 1% improvement from 2018 and a 5% improvement from 2015. To zoom in on the disparity, when all factors such as position, education level and experience are accounted for, the gap is still not negligent. A woman with the same qualifications and characteristics of employment still earns 98 cents for every dollar by a man. So there still exists a gap of 2% in the wages. The question that can be and should be raised here is why the gap and what are the reasons behind these differences.

Factors contributing to gender pay gap:

Discrimination is the most obvious reason to the question of why the gender pay gap exists, but the problem persists on a more complicated scale.

Different Industries.

Much of the research done on wage gap across various industries shows that women are paid less in almost all the industries. And while one might expect that in a field dominated by women the figures would be different, research proves otherwise.Payscale gives the example of the legal industry, where although women make up for 52% of the workforce, they still face the largest uncontrolled gap of all occupations covered in their report.

In the 2019 research report, Glassdoor found out that in the US, the controlled gender pay gap is largest in media, retail and construction, repair and maintenance industries and is smallest in biotech & pharmaceuticals, education, and aerospace and defense industries.

Job titles and opportunities.

In general, most of the jobs that pay the highest also have the largest gender pay gap and the jobs paying less have comparatively smaller pay gaps. The difference also comes from the fact that the representation of women in the higher paying jobs is significantly lower to that of men. So women are less likely to hold higher positions, this is also termed as opportunity gap.

 Women move up the career ladder at a slower pace. So the pay gap grows with age as women become stagnant in their professions. There are multiple reasons behind this, one being the assumptions of employers towards the kind of work the genders are suited for. Another important factor to this is that women spend more time out of the workforce since their time also includes the unaccounted work of taking care of the household and motherhood.

Occupational and Industry segregation.

The biggest cause of the gender pay gap is the differences in the professions taken up by men and women. Women generally tend to pick occupations that pay less, they tend to be overrepresented in fields like Education, Healthcare, Community and Social services (typically lower paying jobs) while men dominate fields like engineering and computer science (comparatively higher paying jobs).

The 2019 report by Glassdoor says that in the US occupational and industry segregation explains about 56.5 percent of the overall wage gap which is by far the largest factor.

Race and Ethnicity.

Wage gap among different ethnic and racial groups have significant variations, the largest gap is seen in the pay of black women.

Equal pay day, started by the National Committee on Pay Equity, is celebrated as symbolic of how far into the year women must work in order to earn what men earned by the end of the previous year. The dates change every year, 2019 celebrated this day on April 2. The dates to recognize the work  by women of color changes accordingly;

 Asian-American women – 5th March, 2019.

African American women – 22nd August, 2019.

Equal pay day is then an apt representation of the variations of wage gap based on the racial and ethnical bias.

GENDER PAY GAP FINDINGS ACROSS DIFFERENT COUNTRIES.

The gender pay gap exists around the world, in the study done by Glassdoor it was found that Germany has the largest gender pay gap with 22.3% (78 cents for every dollar earned by a man) and France has the smallest gender pay gap with 11.6% (88 cents for every dollar earned by a man). The pattern found among the eight countries that were studied for the report shows that the pay gap shrinks when calculated as controlled or adjusted, that is, when all the factors of qualifications and experience is taken into account.

There are a lot of countries that have yet to tackle or even address this issue. The concern raised by the data and statistics of the pay gap available for the few countries only makes us wonder at what the situation is in countries that don’t have proper laws related to this matter.

HOW TO HELP CLOSE GENDER PAY GAP.

Although the wage gap exists persistently, the efforts by organizations and government around the world have tried to close this gap and it has worked in a slow but gradual change and improvement. The issue can be tackled on both a broader organizational level and individual levels.

Measures taken on the level of the organization:

Transparency, being transparent about your wage system and the payment of your employees goes a long way to help bring the awareness of the differences and provides a equal platform for women to raise concern. Most organization hesitate from adopting this policy in fear of the disappointment of the workers, this can be avoided by taking an objective estimation of the worth of a job position and deciding on a fixed, equal salary for a specific job title.

Equal distribution of employees, a workplace balancing the number of male and female employees has proved to be a better environment for equal pay opportunities. It also creates a positive atmosphere for a conversation on these issues. Data shows that an equal representation of women on the top paid jobs shrinks the pay gap of the company.

Measures taken on an individual level:

Know your worth and how much you deserve for the work you deliver.

When applying for the same job with the same qualifications men and women both have almost the same expectations of the salary, so there’s no noticeable ‘salary confidence gap’.

So when working at the same level, women need to know the compensation and raise concern if it is at differences with that of the male employees.

Be confident in your approach and persistent about the end result.

Do your research and approach the issue of a raise, a promotion or a question on the disparity of the salary with confidence. Know the counters to any possible arguments, find out the value of your work and stick to it.

Conclusion

In conclusion to all the findings, the truth of the renumeration gap (even though promising in the statistics of past years)  encourages us to work more to eradicate it, and to work as a team of government, workforces and individuals. The present figures are not negligible and can be improved with constant effort. With the data on paper we must also remember that it also has to be put into action in how fairly women are treated in the workplace and how secure they are made to feel in this environment.