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5 minutes reading time (1085 words)

The truth about the global gender wage gap

young professional - international pay equity day

 

At age 15 I got my first job as a cashier at a Farmer’s Market. One day, after working there for about two years, I overheard a new hire, a boy, make a comment about how much money he made. I was shocked. He made a dollar more than me an hour for the same job and with less experience. Even as a teenager, I knew this was wrong, and promptly put in my two-week notice. Over the years, I’ve heard countless personal stories similar to my own, and this gender wage gap isn’t going away anytime soon. In fact, the 2020 Global Gender Gap Report, which looks at gender gaps in economic participation, education, health and politics, revealed that gender parity will not be attained for 99.5 years.


According to the International Labour Organization, the weighted global gender pay gap ranges from about 16% to 22%.


So, why does this gap exist and why are we having such a hard time closing it? How is it that the same work, when done by a woman, is somehow valued less? Why do women, who are equally responsible for caring for themselves and their families as men, work more hours and make less money in literally every country in the world?

 

Let’s start with what we know.

 

The gender wage gap is about more than just making less money for the same job. It’s about the wage gaps throughout the lifecycle (including the so-called motherhood penalty, sector choice, and the choice of whether to be full-time or part-time etc.), wage gaps between and among different racialized populations, historical labour force participation, education attainment, and pay transparency.

 

The wage gap through the life cycle

 

The wage gap first begins in childhood. A study in Australia found that girls are given 11% less pocket money than boys, and a study done by MEDA in Ethiopia revealed that young women were less likely to be given cash by their parents than young men. Historically, lower educational attainment for women contributed to the wage gap and this is still the case in some contexts. However, even in countries where women are graduating from university at higher rates than men, young women still begin their careers earning less than their male colleagues.

 

Sector choice

 

The sectors women and men choose as their careers is also a major contributing factor. Healthcare, service, and hospitality jobs are most commonly held by women, but these sectors see lower levels of investment, growth, and remuneration. World Bank research notes that, “A hierarchy of earnings -- “the profitarchy” -- emerges whereby men in male-dominated sectors are the top earners, women in male-dominated sectors and men in female-concentrated sectors in the middle tier, and women in female-concentrated sectors at the bottom. Interestingly, the same study found that women with certain characteristics are more likely to enter male-dominated sectors including younger women, married women, and those who inherited a business and/or have substantial support from a male role models or partner.

 

The motherhood penalty

 

As explained in greater detail in a former MEDA blog, the motherhood penalty (referring to the pay gap between mothers and non-mothers as well as between mothers and fathers) also significantly impacts women’s wages over their lifetimes. In general, women’s wages are negatively impacted by motherhood, while men’s wages are positively impacted - though these gaps are also influenced by socio-economic status. Many working mothers have no access to paid leave and are more likely to have or take on part-time employment status or breaks in employment due to unpaid carework. While men may also take advantage of flexible work arrangements to contribute to childcare, they are less likely to take unpaid leave or reduce their hours. The cumulative effect is fewer years of experience and seniority, which negatively impacts earnings over a women’s lifetime.

 

The wage gap is exacerbated for racialized women

 

In North America, racialized women are particularly underrepresented in higher-paying jobs, roles, and careers. According to the U.S. Census Bureau, the wage gap for Latinas, Native American Women, Black Women, White Women, and Asian American women is 54, 57, 62, 79 and 90 cents, respectively, to every dollar a white, non-Hispanic man makes. In Canada, women of colour earn an average of 56.7% of what all men earn.

Preliminary evidence also suggests that COVID-19 will only deepen the gender wage gap. For example, the female dominated sectors of accommodation and food services; real estate, business and administrative activities; manufacturing; and the wholesale/retail trade are projected to be at higher risk of job losses and declining work hours. Specific jobs in healthcare and social work, characterized by long hours, low pay, and challenging conditions are also more essential now than ever before. The COVID-19 pandemic has not brought new inequalities, but it did bring existing inequalities to surface.

This brings me to the central point. There are a number of contributing and exacerbating factors to the gender wage gap. But, ultimately, the gender wage gap is a product of patriarchy and sexism. Plain and simple. In fact, a recent study featured in Harvard Business Review revealed that previously explored arguments related to women’s behaviour do not adequately explain the level of gender inequality in treatment of women in the workplace. The data suggests that bias occurs when women and men, “act identically but are treated differently” and that, “gender differences may lie not in how women act but in how people perceive their actions”.

 

So what can we do?

 

In addition to advocating for legislation to guarantee equal pay for work of equal value and greater mandated pay transparency, businesses and organizations should commit to doing the following

  1. Conduct regular internal pay equity studies or analyses and be transparent about the results.

  2. Use analytical and objective job evaluation methods which rely on gender neutral criteria.

  3. Publish salaries or salary ranges for all employees and encourage staff to negotiate to be paid equitably

  4. Establish an employee diversity performance management system by regularly measuring, analyzing and actioning gender disaggregated data including key performance indicators such as recruitment, hiring, promotions, performance, compensation, attendance, absenteeism, etc.

  5. Do not request salary history. Research has shown that salary histories can negatively and disproportionately impact job advancement for women and racialized people.

Taken together, these steps will contribute to greater pay equity – and begin redressing some of the persistent inequities we see in economics, politics and society. Together, we can achieve gender equality.

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