The gender pay gap is the average difference in earnings between men and women who are employed. It is the extent to which the percentage of men’s earnings differs from that of women. Women generally receive less pay than men.
There are two distinct measurements of the pay gap: the adjusted pay gap and the non-adjusted pay gap.
Adjusted pay gap factors in differences in hours worked, occupations chosen, education, and job experience. It measures the pay gap between the amount men and women receive for performing the same work.
The non-adjusted pay gap values represent the total earnings of the average man and woman.
For example, the adjusted pay gap in the United States is 95-100% while the non-adjusted pay gap is 79-83%.
The global gender pay gap, which stands at 68.5%, is not just a statistic. It’s a stark reality that pushes women into poverty, particularly in their older years. This disparity not only reduces economic output but also increases women’s dependency on men and welfare payments, especially in old age. Older women are more likely to face poverty, with 22% of women aged 65 and above at risk compared to 16% of men in the same age group.
The gender pay gap is not just a local issue, but a significant socioeconomic problem that extends to developing countries, making it a global concern.
Despite the lack of sufficient data on wealth disparity in Nigeria, the gender pay gap calculator indicates that Nigerian men earn 71% more on average than women, underscoring the need for more comprehensive research in this area.
Causes of the Gender Pay Gap
1. Occupational Segregation and Gender Norms:
This is responsible for the pay disparity between men and women in different occupations. The job opportunities available for men and women across various occupations differ. Domestic jobs, caregiving jobs, and some health jobs are culturally known as “feminine” and generally pay less compared to other occupations like industrial jobs, oil and gas, automation, and technology, which men mostly dominate.
2. Parenthood and Motherhood Penalty:
When a woman is of childbearing age, some employers may view her as less employable due to obvious reasons. These include pregnancy, maternity leave, and the responsibilities that come with caring for children. Overall, this significantly reduces the hours that women spend at work, irrevocably reducing their pay when compared to men. The phenomenon of lower wages due to childbearing is known as the motherhood penalty.
3. Gender Inequality and Discrimination:
Gender inequality and discrimination are systemic issues that persist at all levels of business and in all industries, contributing to women earning less than men. These issues, including sexual harassment, gender stereotypes, gender roles, and work-life balance, need to be addressed to close the gender pay gap.
Gender stereotypes also play a significant role in reducing the earnings of women in the workplace. Employers have testified to paying men higher salaries than women, even though their job descriptions were the same and they performed at the same level as their male counterparts. The employer’s reason was that he didn’t expect the woman to give as much as the man.
What Has Changed
Significant strides are in motion to narrow the gender pay gap. Countries worldwide have seen an increase in women’s earnings relative to those of men. Notably, African and Asian nations have experienced rapid growth in this area over the past three years. Sweden, Denmark, and Finland have made commendable progress by implementing legal policies on women’s earnings and childbirth. These interventions, aimed at reducing the gender pay gap, are a cause for optimism and include:
1. Provision of education and opportunities for women:
More women have been able to pursue formal training in schools that equip them with skills that enable them to secure high-paying jobs. There has been an increase in available job opportunities for women in STEM (Science, Technology, Engineering, and Mathematics), and more women now actively participate in STEM roles than ever before. A study even revealed that there were more women in about four technology industries than men.
2. Inclusion of Women in High-Paying Fields:
There has been a significant push for the inclusion of women in technical fields such as programming, cybersecurity, software engineering, and financial technology, as well as many other high-paying roles. Scholarship and mentorship are also available for women across all these fields. There has also been advocacy for women to participate in politics and leadership positions. More women in leadership positions have the potential to increase the number of women who reach the highest levels of their careers. An increase in the number of women holding political positions would also lead to the creation of more favorable policies guiding the treatment and payment of women in the workplace.
3. Introduction of New Policies to Reduce the Gender Pay Gap:
Ever since the topic of the gender pay gap became a familiar one, the government and other governing bodies have implemented rules to ensure the inclusion of women and equal payment of salaries to men. There has also been increased transparency in the wages paid to both men and women working at the same level. In the Nordic countries, the government pays women adequate sums of money during their maternity periods to compensate for any losses they may have incurred, ensuring a balance in the pay gap during this time.
What Hasn’t Changed
Despite a decrease in the gender pay gap across various occupations and countries, some areas have shown no improvement. According to a study conducted by the Joint Economic Committee, in 2014, mothers earned 3% less than childless women and 15% less than childless men. The progress in narrowing the gender pay gap is only significant for childless men and women. Research shows that the motherhood penalty, which is the decrease in pay for mothers, remained unchanged rather than declining, unlike the gender pay gap. This results in women in the 35 and above age group earning more than those aged 18-35.
Pay equity is still far from breaking through due to gender discrimination. As of May 2024, women in the U.S. received 17% less than men, despite gender equality initiatives like Equal Pay Day. For women of color, the disparity is even more pronounced. A lot of women still experience verbal and non-verbal discrimination stemming from the gender stereotypes that arise from just being a woman. The lack of representation of women in leadership positions as the ladder advances also affects the chances of women’s admission to higher positions that will earn them more money, thereby reducing the gender pay gap.
The World Economic Forum estimates that closing the gender gap in economic participation and opportunity will take 169 years at present advancement rates.
The inclusion of women in the workplace and the achievement of gender pay equity are not just important; they are imperative. These measures are crucial for maximizing the labor force and fostering global economic growth. We certainly cannot overstate the urgency of this issue.