A recent report from the World Bank reveals that women earn 77 cents for every dollar earned by men, underscoring the issue of the gender wage gap.
WHAT DOES THE 'GENDER PAY GAP' MEAN?
According to the International Labour Organization (ILO), the gender pay gap is defined as the gap between the average wage level of all women and all men working in the labour market for a monthly salary, hourly or daily wage.
This gap highlights the overall disparity in earnings between women and men across the workforce, distinct from the "equal pay for equal work" concept, which advocates for equal wages when women and men have the same qualifications and perform identical tasks.
It is an internationally established measure of women’s position in the economy in comparison to men.
The gender pay gap is the result of the social and economic factors that combine to reduce women’s earning capacity over their lifetime.
STATISTICS:
The International Labour Organization (ILO) estimates that women on average continue to be paid about 20 per cent less than men across the world.
As per the labour force survey data of the National Sample Survey Office (NSSO), the gender pay gap in India has declined from 48% in 1993–94 to 28% in 2018–19, but it is still high as compared to global average.
Also, the estimates from the Periodic Labour Force Survey (PLFS) 2020-21 show an increase in the gap by 7% between 2018-19 and 2020-21 in India due to Covid-19 pandemic.
FACTORS THAT CONTRIBUTE TO THE GENDER PAY GAP:
Labour Force Participation:
One primary reason is the lower rate of labour force participation among women compared to men, influenced by traditional gender roles. The International Labour Organization (ILO) reports that globally, the labor force participation rate for women is under 47%, while for men, it's around 72%.
Feminized jobs:
Occupational gender stereotyping often relegates women to care jobs, leading to "female jobs"being undervalued in wage determinations. This depresses women's wages compared to men's, as traditionally female-dominated fields tend to pay less than male-dominated ones.
A 2013 Georgetown University survey showed that the highest-paying professions, mainly in engineering and computer science, were mostly male-dominated, while the lowest-paying fields, such as arts and education, were predominantly female.
Career breaks:
Women more than men arelikely to take career breaks from their employment in order to raise children or care for the older or ill members of the family.
This means that when they return to work, they are likely to have fallen behind in advancement and in remuneration.
For instance, a 2019 World Economic Forum article, ‘An Economist Explains Why Women are Paid Less,’ cites OECD data showing a “motherhood penalty” of roughly a 7 percent wage reduction per child for women and a potential fatherhood premium for men, indicating a positive wage correlation with the number of children.
"Motherhood Penalty":
Some critics argue that a simplistic interpretation of the gender pay gap overlooks a crucial detail: the statistic that women earn 77 cents on the dollar compared to men masks the fact that women who do not get married or have children can earn 95 cents or even more for every dollar a man makes. This difference is known as the “motherhood penalty,” which suggests that women are unfairly penalized in their career growth when they take breaks to have and care for children. This penalty affects not only direct earnings but also long-term career progression and opportunities.
Working hours:
Women are more likely than men to be employed in part-time jobs, often due to unpaid family duties. According to ILO data from 2018, women outnumber men in part-time work in 73 countries.
Part-time positions often come with fewer benefits compared to full-time roles, which can adversely affect women's long-term income and career growth.
Cultural norms assigning domestic tasks to women limit their labour market involvement, with India's female-to-male ratio in unpaid care work stands at 9.83, which is the third highest in the world.
Under-representation in leadership:
Far fewer women than men are in management and leadership positions, especially at higher levels.
For instance, there are only 29% women in senior management positions worldwide.
When women are managers, they tend to be more concentrated in management support functions such as human resources and financial administration than in more strategic roles.This brings down the average salary of female managers compared to that of male managers.
Glass ceiling effect:
It represents a barrier that prohibits women from advancing toward the top of a hierarchical corporation, regardless of their qualifications and achievements.
Social conditioning:
The nurturing in a casteist-patriarchal society like India does not factor in the elements of gender sensitivity. Women are usually considered second-class citizens and subordinate to men, which influence women’s career opportunities as well as remuneration.
Digital divide:
Only 25% of females in India own a mobile phone compared to 41% of men. Moreover, only 35% of Indian women use the internet, reducing their opportunities.
The cost of traditional gender roles:
The research of Claudia Goldin, the 2023 Nobel laureate in economics, suggests that the traditional division of labor in the family, where women often "step back" to facilitate men's career advancement ("stepping up"), leads to significant sacrifices for both genders—women in terms of career progress and men in terms of family time.
GOVERNMENT INITIATIVES:
Legislations:
Code on Wages, 2019:
It subsumes the Minimum Wages Act, 1948 and the Equal Remuneration Act, 1976. It provides for payment of equal remuneration to men and women workers for same work or work of similar nature without any discrimination.
Maternity Benefit (Amendment) Act, 2017:
In 2017, the Government amended the Maternity Benefit Act of 1961, which increased the ‘maternity leave with pay protection’ from 12 weeks to 26 weeks for all women working in establishments employing 10 or more workers.
This is expected to reduce the motherhood pay gap among mothers in the median and high-end wage earners working in the formal economy.
Schemes:
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA):
Evidence shows that the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) benefited rural women workers and helped reduce the gender pay gap, both directly and indirectly.
Directly, by raising the pay levels of women workers who participated in the programme, and indirectly, benefits accrued to women involved in agricultural occupations through higher earnings, as MGNREGA contributed to the rapid rise in overall rural and agricultural wages in the country.
Skill India Mission:
Efforts are being made through the Skill India Mission to equip women with market-relevant skills to bridge the learning-to-livelihood gap and the gender pay gap.
Constitutional provisions:
Article 14: Equality before law for women.
Article 39 (D): equal pay for equal work for both men and women
Article 42: The State to make provision for securing just and humane conditions of work and for maternity relief.
Other related initiatives and efforts:
Gender mainstreaming in the Budget 2022 by 11%
In 2022, in a historic step towards reducing the gender pay gap in cricket, the Board of Control for Cricket in India (BCCI) announced equal match fees for its centrally contracted female and male players.
Acknowledging women’s efforts through Nari Shakti Puraskar, Rajya Mahila Samman etc.
Draft national policy for women, 2016
National Career Service (NCS) Project which comprises a digital portal that provides a nation-wide online platform for jobseekers and employers for job matching.
Efforts at the international level:
The ILO has enshrined ‘equal pay for work of equal value’ in its Constitution and the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) provides an international legal framework for realising gender equality and addressing the intersecting forms of discrimination and vulnerabilities among women and girls.
One of the targets of the UN Sustainable Development Goal 8 is “achieving full and productive employment and decent work for all women and men, including for young people and persons with disabilities and equal pay for work of equal value” by 2030.
In support of this Goal, the Equal Pay International Coalition (EPIC), was launched in 2017 as a multi-stakeholder initiative led by the ILO, UN Women and the Organisation for Economic Co-operation and Development (OECD) that seeks to achieve equal pay for women and men everywhere.
WAY FORWARD:
To reduce differences between average earnings of men and women, we instead need to tackle gender segregation in education and in our labour markets. Societies should do more to address the long established cultural reasons leading to a persisting gap. This means promoting gender neutral choices of individuals at all stages and in all aspects of their lives.
Equal pay for work of equal value is necessary to close the gender pay gap. Closing the gender pay gap is key to achieving social justice for working women as well as economic growth for the nation as a whole.
Undertaking a gender pay review in the enterprises to assess whether there is a gender pay gap and to what extent - conducting regular pay reviews can help a company keep on top of any discrepancies.
Governments as well as enterprises should promote a gender-inclusive business culture while adopting a holistic approach to equal remuneration for women and men for work of equal value.
Employers must ensure that unconscious gender bias does not affect performance reviews of employees.
CONCLUSION:
Eliminating the gender pay gap can provide incentives for more women to be economically active, which would advance gender equality and create a virtuous cycle. Studies have linked increased labour participation rates of women with higher levels of GDP. The ILO estimates that reducing the gap in participation rates between men and women by 25 per cent by the year 2025, could raise global GDP by 3.9 per cent, or USD 5.8 trillion.
PRACTICE QUESTION:
Q. Analyse the causes of the gender wage gap and assess its impact on gender equality and economic growth. (15 marks, 250 words)
