Gender Pay Gap Is Slowly Closing?

The ‘gender pay gap’ comes up often in political debates, policy reports, and everyday news. But what is it? What does it tell us? Is it different from country to country?

The gender pay gap is defined as the relative difference in the average gross earnings of women and men within the economy as a whole.

Although equal pay has been a legal requirement since the Equal Pay Act was introduced in 1970, pay discrimination and inequality in the average wages between men and women persists in all countries and across all sectors because women’s work is under-valued and women tend to be concentrated in different jobs than men.

This is even true when the work itself requires equal or more effort and skills, however, women’s work is valued and remunerated less. The gap widens for women of color, immigrant women and mothers. Mothers, due to the so-called “motherhood penalty”, are pushed into the informal economy, casual and part-time work.

Gender Pay Gap

The gender pay gap is the difference between male and female earnings. It reduces women’s lifetime earnings and also affects their pensions – this is one of the significant causes of poverty in later life for women.

There have been many protests in different countries around the world about wage inequality between men and women. In many countries, women even have to work longer hours than men to receive equal pay with men from their employers.

The United Nations Entity for Gender Equality and the Empowerment of Women, also known as UN Women, has announced that women only make 77 cents for every dollar earned by men, worldwide. As a result, there’s a lifetime of income inequality between men and women and more women are retiring into poverty.

The gender pay gap has become one of the main concerns of women’s rights activists these days. There have been recent developments in some countries to eliminate inequality. But what is the situation in other countries?

Why Gender Pay Gap Exists?

In recent years, many efforts have been made to promote equality between men and women in different countries.

• Direct Discrimination: this happens when a woman is paid less than a man for the same jo only due to her gender.
• Undervaluation: Many employers undervalue women’s competences and skills and pay them less money than men for doing the same job, requiring similar skills, qualifications or experience.
• Promotion: Another way in which women’s competences and skills are undervalued could be reflected in the promotion rates in an organization.
• Different Job Choices: women and men still tend to work in different types of jobs. Some societies consider jobs to be gendered. For instance, women frequently choose to teach in primary schools. Different job choices attach different values for each gender. More than 40% of women work in health, education and public administration while only 29% of scientists and engineers in the EU are women.
• Traditions and Stereotypes: These two are among the most important reasons women are being underestimated and are paid less money than men in most under-developed and developing countries. Some countries have traditions and stereotypes against women’s competence and ability that may influence the choice of educational paths and employment patterns. In these societies, school career services often encourage girls and boys into traditionally gendered occupations.
• Motherhood Role: women are expected to choose to care for children, so they naturally end up in part-time jobs, below their skill levels, and with fewer progression opportunities.
• Segregation: this in the labor market also reinforces the gender pay gap. Women and men still tend to work in different jobs.

The ONS has also conducted research into the causes of the gender pay gap. This found the key factors explaining the pay gap were as follows:

• 22 percent of the gap is due to the different industries and occupations in which women work
• 21 percent of the gap is due to differences in years of full-time work
• 16 percent of the gap is due to the negative effect on wages of having previously worked part-time or of having taken time out of the labor market to look after the family
• only 5 percent of the gap is due to formal education levels
• A significant proportion (36 percent) of the pay gap could not be explained by any of these factors, suggesting direct discrimination may still be an important factor

Pay Gap by Country

In many countries, even in developed countries, there are traditional and patriarchal views against women, and this ignores their skills. On the other hand, traditional beliefs against women and distrust toward their ability have caused pay discrimination against women by employers.

The World Economic Forum has announced that it will take another 118 years – or until 2133 – until the global pay gap between men and women is finally closed.

In recent years, many efforts have been made to promote equality between men and women in different countries.

Here are the names of OECD member countries with the biggest gender pay gaps, ranked least to worst:

Austria: Austrian women earn 15.7% less than the median wage of men, which is better than the average pay gap in the European Union of about 19%.

Finland and Mexico: women in Finland and Mexico earn 16.5% less than the median male wage.