Take Five: At the current rate of progress, no equal pay until 2069

Date: Friday, February 24, 2017

Chidi King,Director of the Equality Department of the International Trade Union Confederation.
Chidi King,Director of the Equality Department of the International Trade Union Confederation.

Across the world, women still get paid 23 per cent less than men. Chidi King, Director of the Equality Department of the International Trade Union Confederation (ITUC), the main international trade union organization representing the interests of working people worldwide, and a member of UN Women and ILO’s Equal Pay Champions initiative, unpacks the issue.

Globally, the gender pay gap stands at 23 per cent globally. What’s behind this gap?

The global gender pay gap is an expression of persistent inequalities between men and women in our societies and in our places of work. The social and cultural norms that broadly cast men’s roles as decision-makers and women’s roles as carers, play a significant part—not only in terms of the type of paid work into which women are channelled—but in terms of how that work is valued and remunerated.

When women enter the formal labour market, their paid work and their role as workers is often seen as subsidiary or supplementary to their principle role of “homemakers”. This in turn impacts how women are paid. Even where women have equivalent or better qualifications than men, their skills are not valued the same as men's and their career progression is slower.

“Closing the gender pay gap needs a package of measures, central to which is decent work”

  • One of the most effective and quickest ways to narrow gender pay gaps is through minimum living wages.
  • This needs to be backed up by universal social protection, extended to workers in formal and informal economy—income security to the unemployed or underemployed (the majority of whom again are women), paid maternity leave, child care and other social and health care support, insurance against lost earnings due to sickness or occupational injuries and adequate pensions in retirement.
  • Ensuring that workers have freedom of association and the right to organize and bargain collectively.
  • Provision of quality public childcare and elderly care services, family friendly work-place policies, and policy measures encouraging men to share care responsibilities.
  • Transparency within companies in criteria and decisions concerning pay can also help prevent gender bias.

But the main underlying reason for the gender pay gap is that women tend to be concentrated in different jobs to those of men; and jobs tend to be valued along gender lines. In order to ensure “equal pay for work of equal value”, we need to address the fact that a job in the male-dominated construction sector, for example, may be of the same or similar objective value as a job in female dominated child-care sector (in terms of skill, effort, responsibility and working conditions). Yet, the job in the female-dominated child care sector will almost invariably be less well paid. The way we value different types of jobs has to change—and this has been recognized by the International Labour Organization (ILO) Convention 100, dating back to 1951.

Are some women and certain sectors more impacted by the gender pay gap than others?

Women in male-dominated industries may earn more than those in female-dominated industries, but the gender pay gap persists across all sectors. For example, in the United Kingdom, it’s estimated that female managers in the financial services sector earn up to 39.5 per cent less than their male counterparts [ 1].

Overall, women in formal employment are segregated in a narrower range of sectors and occupations. A 2016 study of trends in women at work by the ILO confirms that in high and upper-middle income countries, the female work force is concentrated in teaching, nursing, health care, office and administrative work, and sales and service industries [2]. These sectors are the ones that tend to be under-valued and underpaid, precisely because of the high numbers of women present.

Women are also overrepresented in the low paid, insecure and often unsafe jobs within global supply chains, particularly in agriculture, textile and garment industries. In fact, the majority of the world’s women—up to 80 per cent] [3 in some parts of the world—work in the informal economy, where not only do they lack decent wages, safe working conditions and social protections like health care, maternity protection or paid leave, but women also earn less than men within this sector.

Racial and other inequalities also play a role in widening the wage gap for women of colour or from marginalized groups. As revealed by a recent Canadian study, women of colour earn 68 cents for every dollar earned by white women and 79 cents for every dollar earned by black men [4]. Similar findings have emerged from studies in the US, the UK and South Africa.

The world of work as we know it is still generally structured around the male “breadwinner” model, with long and rigid working hour arrangements. As women become mothers, they bear the “motherhood penalty”—in order to balance family responsibilities and paid work, women accept part-time, casual or underpaid jobs, or work in the informal economy. In pregnancy, they may also face discrimination, which can lead to them being dismissed, harassed out of the workforce, or demoted on their return. Taking time out to care for children also slows women’s career progression.

What are the short and long term impacts of gender pay gap?

Failure to address discrimination and inequality in the labour market, including the gender pay gap, adds to the already unacceptably high number of working poor women and translates to more women retiring into poverty. One of the long term effects of the gender pay gap over a woman’s working life is an immense pensions gap in her retirement. Evidence shows that around the world, the number of elderly women living in extreme poverty is climbing.

Currently 40 per cent [5] of women in wage employment do not contribute to social protection measures, including pension, maternity protection schemes, occupational disease and accident insurance and more. They are not covered by basic social security guarantees that may be set at the national level. The gender wage and pensions gaps, accompanied by the lack of universal social protection seriously jeopardize the fulfilment of the Sustainable Development Goals, which call for an end to poverty and hunger; the achievement of gender equality and decent work; and the promotion of health and well-being for all at all ages.

What actions are needed to bridge the gender pay gap?

Closing the gender pay gap requires a package of measures, central to which is decent work.

One of the most effective and quickest ways to narrow gender pay gaps is through minimum living wages (or wage floors) and universal social protection. Minimum living wages benefit all low paid workers. Since women are starkly overrepresented in low paid work, it would usually benefit women more dramatically. Germany, for example, recently introduced a national minimum wage to tackle its stubborn gender wage gap of 22.4 per cent.

This needs to be backed up by universal social protection, which entails income security to the unemployed or underemployed (the majority of whom again are women), paid maternity leave, child care and other social and health care support, insurance against lost earnings due to sickness or occupational injuries and, of course, adequate pensions in retirement. It’s crucial that such protections are extended to workers in the informal economy, who are often excluded, and overwhelmingly female.

Ensuring that workers have freedom of association and the right to organize and bargain collectively is also an important part of the solution. In the United States, the wage gap between men and women is 11 per cent for union women, compared to 22 per cent on average [6]. And in the United Kingdom, the wages of women union members are on average 30 per cent higher than those of non-unionized women [7].

The package of measures to close the gender pay gap must include the provision of quality public childcare and elderly care services, family friendly work-place policies. Policy measures that encourage men to share care responsibilities–for instance paternity leave—have proven useful to changing the social norms that drive the gender wage gap. The Scandinavian countries are a case in point and have so far made the most progress in this area.

Transparency within companies in criteria and decisions concerning pay can also help prevent gender bias.

You are part of the Equal Pay Champions group. Can you tell us more about what this initiative will do?

I hope that the Equal Pay Coalition under the leadership of UN Women and the ILO will galvanize action and accelerate progress towards closing the gender pay gap. Recent estimates tell us that at the current rate of progress, this gap will not be closed until 2069! If we don’t act now, changes to the world of work, including automation and the on-demand economy, might make the gap wider still.

The Equal Pay Champions are expected to raise awareness on the principle of equal pay for work of equal value and its implications, advocate for increased political support and proactively reach out to policy-makers and decision-takers. Together, our advocacy aims to secure laws on equal pay; measures to address the gender bias in wage structures and wage fixing mechanisms; generate quality gender data on wages and other benefits; better maternity, paternity, parental leave and childcare policies and minimum living wages.

Notes

[1] HM Treasury, Theresa May MP and Simon Kirby MP (2016). Major financial services firms step up efforts to tackle gender gap. Available from https://www.gov.uk/government/news/major-financial-services-firms-step-up-efforts-to-tackle-gender-gap

[2] ILO (2016). Women at Work Trends 2016. Available from http://www.ilo.org/gender/Informationresources/Publications/WCMS_457317/lang--en/index.htm

[3] ILO (2014). Women and Men in the Informal Economy: A Statistical Picture. Available from http://www.ilo.org/stat/Publications/WCMS_234413/lang--en/index.htm?ssSourceSiteId=addisababa

[4] Lydia O’Connor, The Huffington Post (2016). The Wage Gap: Terrible For All Women, Even Worse For Women Of Color. Available from http://www.huffingtonpost.com/entry/wage-gap-women-of-color_us_570beab6e4b0836057a1d98a

[5] ILO (2016). Women at Work Trends 2016. Available from http://www.ilo.org/gender/Informationresources/Publications/WCMS_457317/lang--en/index.htm

[6] Anderson, Hegewisch and Hayes (2015). The Union Advantage for Women, briefing paper, Institute for Women’s Policy Research. Available from http://www.iwpr.org/publications/pubs/the-union-advantage-for-women#sthash.VaUwff5l.dpuf

[7] UK Department for Business, Innovation and Skills, Trade union membership 2014: statistical bulletin. Available from https://www.gov.uk/government/statistics/trade-union-statistics-2014