Gender pay gap

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The gender pay gap is the average difference between men's and women's earnings. In most jobs, in virtually all countries, women earn less than men.

There are different ways of measuring the pay gap. For example, the European Union defines the gender pay gap as the average difference between men's and women's hourly earnings, while the United States defines it as the ratio of women's to men's median yearly earnings among full-time, year-round workers. Other methods – such as measuring only the difference between workers within one company or between workers with similar jobs – also exist, and hope to adjust for some other explanations of the existence of the gender pay gap.

As noted above, the gender pay gap is often divided into "unadjusted" and "adjusted" pay gaps. The unadjusted pay gap is simply the raw difference between men and women's earnings. The adjusted pay gap usually takes into account some factors that impact the gap’s existence, such as differences in education, job experience, job sector, job position, number of hours worked, marital status, parenthood status, etc. The adjusted pay gap is substantially smaller than the unadjusted pay gap, as the adjusted pay gap thus measures only overt workplace discrimination against women. This has led many conservatives and libertarians to denounce sexism being a factor behind the pay gap. However, this view ignores that the origins of the adjusted factors can be argued to be sexist in themselves, as they are theorized to be almost entirely the result of the different societal pressures on males and females, as well as the fact that mothers miss out on pay as the result of maternity leave. As one commentator puts it:

“”If high school girls are discouraged from taking the math and science classes that lead to high-paying STEM jobs, shouldn't we in some way count that as a lost equal earnings opportunity?

Around the world

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Expressed as the average difference between the hourly earnings of all full-time male and female workers, women earn 16.4% less than men in the European Union. The size of the gap varies considerably by EU state but it still exists in each state. On the whole for the EU, the disparity has narrowed in recent years but in some countries it has actually widened. It is interesting that the gap exists despite women outperforming men in second and third level education. As elsewhere, the existence of the gap means that women are at greater risk of poverty than men, especially in old age.

In the United States, the ratio of women’s to men’s earnings was 0.81, again based on yearly earnings among full-time, year-round workers. The gap varies between states, with women’s earnings being closer to men’s in more states in the South and the West than in the Northeast and the Midwest. The gap narrowed considerably in the 1980s, but convergence has been slower since then.

Among industrialized nations, South Korea and Japan had the greatest disparity between men and women.

In less developed countries data on this is not recorded or cannot be fully collected due to the informal nature of much of their economies. It is clear however, that Africa and Asia have the greatest gender disparities when it comes to earnings, traditionally, and still today, because of the marginalised roles of women in society and in culture.

Pay gap for the same job

Hay Group, a global management consulting firm with 86 offices in 49 countries, analyzed data for 8.7 million employees in 33 countries over the world. Hay Group concluded that: "Our global research confirms [the pay gap] but also shows that when compared “like for like”, the gender pay gap reduces to 1.6%. Put simply, a man and a woman doing the same job in the same function and company get paid almost exactly the same."

Hay Group distinguished between multiple levels of the gender pay gap:

• Headline pay gap, given by the ratio (female average salary - male average salary) / male average salary, ranging over all female and male employees. Among the 33 countries, the average headline pay gap is -17.6%, with a minimum of -31.6% in the Czech Republic, and only three positive values: 0.7% in the United Arab Emirates, 7.3% in Nigeria, and 34.3% in Egypt.
• Same level pay gap, given by the same ratio, but ranging over all female and male employees belonging to the same level and then averaged, for each of 16 job levels: from entry clerical or production operative level, to a head of function or director in a medium to large company. The average same level pay gap is -6.5%, with a minimum of -17.2% in Chile, and only two positive values: 1.2% in Egypt and 2.7% in Nigeria.
• Same level, same company pay gap, as before but ranging over employees at the same level and at the same company. The average same level same company pay gap is -2.2%, with a minimum of -5.4% in Mexico and only six positive values: 0.4% Egypt, 0.9% Nigeria, 1.5% Indonesia, 1.6% Vietnam, 1.8% Saudi Arabia, and 2.0% United Arab Emirates.
• Same level, same company, same function pay gap as before but ranging over employees at the same level, at the same company, and doing the same function. The average same level, same company, same function pay gap is -1.6%, with a minimum of -5.0% in Spain, and six nonnegative values: 0.0% Saudi Arabia, 0.1% Egypt, 0.4% Nigeria, 1.4% Vietnam, 2.1% United Arab Emirates, and 3.0% Indonesia.

Hay Group's findings are similar to other "adjusted" pay gap findings. Not very much of the pay gap can be explained by workplace discrimination alone. Instead, most of the pay gap stems from other structural factors, such as women having a harder time getting promoted or getting accepted into higher-pay companies.

Causes of the gender pay gap

The causes of the gender pay gap everywhere are complex and interrelated. What is clear is that the gap exists everywhere as a result of wider gender inequalities across economies and societies. The following lists the most important factors that cause the gender pay gap in the west. It is important to note that a given factor may contribute more to the gap in one area than in another and vice versa.

Discrimination

Despite legislation, sexist discrimination still plays a role in the make-up of the pay gap and is often assumed to form the ‘unadjusted’ part of the disparity. Studies have shown that resumes with male names were more likely to be considered than resumes with female names. Discrimination can be blatant, with a woman not getting a job, promotion etc. consciously based on the fact that she is a woman. Perhaps more often, the discrimination is unconscious and based on stereotypes, with women often as guilty as men in this regard. Ilana Yurkiewicz has commented on discrimination in the field of science, saying:

“”If faculty express gender biases, we are not suggesting that these biases are intentional or stem from a conscious desire to impede the progress of women in science. Past studies indicate that people’s behaviour is shaped by implicit or unintended biases, stemming from repeated exposure to pervasive cultural stereotypes that portray women as less competent.

There is evidence that managers often give favour to men for promotion and employment on the basis that as the man is the breadwinner, it is more important for him to get the promotion or job. General dislike of the idea of women as leaders also still persists.

Gender discrimination is also prevalent during hiring with women being less likely to be hired when their gender is known. An example of this was found in the hiring of female musicians in American opera houses. In order to improve the very low percentage of female musicians being hired, blind auditions for preliminary screening process was used, which increased female hiring by 50%.

Discrimination in the workplace may also not result from individual discretion but from existing policies and practices that are not designed to be discriminatory but do result in discrimination.

Evidence from the European Union’s experience suggests that discrimination happens less when mechanisms of recruitment and promotion are automatic and protected by collective bargaining as opposed to be largely left to managerial discretion. This helps to explain why the gap tends to be narrower in the public sector.

Childcare and family responsibilities

Women spend more time than men on domestic work and childcare. In the United States, women spend about 16.5 hours per week on domestic work, or 4 hours (32%) more than men and about 60 minutes per day on childcare, or 34 minutes (130%) more than men.

This has a number of effects. For one, women take longer career breaks than men in order to care for young children. This stifles opportunities for career advancement, while men are largely unaffected. In Estonia for instance, for each child a woman’s earnings will fall by 3.6% whereas men’s earnings are not affected.

In addition to taking career breaks in order to care for children, women tend to work shorter hours and are more likely than men to work in part-time employment in order to balance work with family responsibilities.

Other effects of this gender role on perpetuating the pay gap include women not being able to take jobs with hours that are not family friendly or being able to travel for work. Employers are also reluctant to hire or promote women to higher positions based on fear that they will take career breaks or cut their own hours.

An interesting phenomena is that the gender pay gap correlates very strongly with the age gap at first marriage; the bigger the average age differences in marriage in a country, the greater the pay gap. When the data on pay is restricted to unmarried people alone, the pay gap shrinks significantly, to 85 cents on the dollar for Germany, 98 cents in the US, and 1.02 in Norway (that is, the pay gap is reversed). Of course, unmarried people are not a random group.

Health insurance (US only)

In one of the strongest arguments for Universal Healthcare ever, it turns out that having employer provided healthcare causes a whopping 10% of the gender wage gap in the US. Employer health plan costs are partially based on the historical experience of the group, and women tend to be more susceptible to a parasitic sexually transmitted disease known as "pregnancy". This condition typically lasts for up to nine months before the body clears itself of the parasite naturally, although for many women recurrence may occur.^{[citation NOT needed]} In the US, the average cost of childbirth is $10,000, and that does not include all the pre-natal screenings and the other fun stuff. This is due to a huge number of reasons, ranging from premature birth being the one common medical condition more expensive than an organ transplant to the attorneys suing the asses off of hospitals that don't perform invasive and expensive procedures regardless of proven effectiveness, but the result is more expensive pregnancies, which leads to higher health care costs for insuring women. This makes its way into the amount employers are willing to pay young women.

Women also have longer life expectancies than men, so it's likely that something similar happens for companies that offer pensions. The longer you are expected to live, the more valuable the pension becomes, which increases the amount needed to fund the pension. If the employer has to fund the pension too, again this will make its way into the wages one way or the other. Of course, since pensions will soon be a thing of the past (more and more companies are switching over to 401(k) plans, whose payouts don't depend on the recipient's life span), this really won't be an issue for long.

Undervaluing of women’s work and skills

There is much evidence that says that jobs considered ‘feminine’ are undervalued. That is that there are jobs that are less well paid compared to others jobs where similar levels of skill or ability are required simply because they reflect ‘female’ characteristics. For example, in supermarkets physical work in the stock room tends to be paid better than cashier work for this reason (The Bureau of Labor Statistics states that cashiers have a median annual wage of $19,310 while storeroom clerks have a median annual wage of $24,250, despite the only real difference being that one puts things on shelves and the other has to deal with customers). Where women dominate a sector they receive lower wages than they might have otherwise, while the opposite is true for men. Moreover jobs that become seen as more female develop lower wages over time, making it impossible for women as a whole to win the shell game.

Educational and career choices

Societal expectations about the kind of jobs women should go into continue to affect the choices that girls and women make about their education and careers, with expectations being shaped from a very early age. Accustomed to perceiving themselves as more suitable for certain types of jobs, women tend to reiterate traditional education and work choices, which prevent them from seeing other options as feasible. The result is that even women with high educational attainment still go into women dominated sectors, with the result that they go into lower paid jobs for the reason mentioned above. Indeed, pay differences between men and women are greater for highly educated workers compared with low-skilled workers in most countries.

While obviously it is fine for anybody to enter in a lower paid occupation if they wish, it is so vital to recognise that expectations about suitable occupations are formed from a very early age. So it is not always simply a matter of free choices being made outside of a social context, as conservatives such as Christina Hoff Sommers seem to suggest.

Further, researchers at Tel Aviv University discovered the long term effects of unconscious biases of elementary school teachers can have a substantial negative impact on career choices. The biases, which were measured by a propensity of them to score female students lower on mathematics tests compared to anonymized tests, have long reaching effects, with students who were exposed having significantly lower interest in science and math in secondary schools, and much lower entry into STEM fields. This is in stark contrast to common claims that women are just less interested in science and mathematics as an explanation for career paths.

Amount of work

Some have noted that men tend to work more than women (and/or work more overtime), which probably would justify different wages. However, according to the US Bureau of Labor Statistics:

[E]mployed men worked about three-quarters of an hour more than employed women. [...] This difference partly reflects women's greater likelihood of working part time. However, even among full-time workers (those usually working 35 hours or more per week), men worked slightly longer than women — 8.2 versus 7.8 hours. Among part-time workers, men averaged 5.2 hours on days they worked and women averaged 5.4 hours.

Only considering full-time workers and number of hours worked, the 0.4 hour difference might justify a ~5% pay difference; however, this only accounts for a fraction of the difference, as the pay gap is far larger. This gap is in large part due to women having to take care of children. The American Association of University Women reported:

[B]ecoming a mother can negatively affect women’s earnings, while becoming a father does not typically have the same effect (Correll et al., 2007). Women are more likely than men to leave the workforce or reduce their work hours after they have children, thus reducing their earnings (AAUW Educational Foundation, 2007). Research has found that even among full-time workers, mothers face an earnings penalty in the workforce compared with women without children (Correll et al., 2007).

The AAUW also found:

One year after college graduation, men and women have much in common. [M]ost women and men who had earned bachelor’s degrees the year before were young, single, childless, relatively inexperienced in the workplace, and working full time. We might expect to find little or no gender pay gap among this group of workers at the start of their careers. Yet just one year after college graduation ... [w]omen working full time earned $35,296 on average, while men working full time earned $42,918[.] These figures represent a female/male earnings ratio of 82 percent, which is slightly higher than it was in 2001 when, among the same group, women earned just 80 percent of what their male peers earned (AAUW Educational Foundation, 2007). .... Among those who did have children, though, both men and women earned more than their counterparts without children. Mothers tended to be older than other female graduates, which may account in part for their relatively higher levels of pay. Not surprisingly, among full-time workers just one year after college graduation, the pay gap cannot be explained by motherhood.

Systemic, non-discriminatory bias

Women are substantially more likely to be dismissed from managerial roles in downsizing efforts based on conservative policies and rules such as by position importance and tenure, but not when the dismissals are based on objective measurements of performance. This suggests the pay gap can be affected by secondary effects of sexism. Another systemic contributor to the wage gap is the prevalence of female workers in jobs paying minimum wage. One study showed that women outnumber men two to one in jobs that pay minimum wage.

Dubious causes of the gap

Surprisingly, most people are not crabbing as they go about their work.

There are several questionable sources of the gender gap, which tend to be used more often by MRAs and conservatives.

More dangerous work

MRAs and conservatives argue that women are paid less because men are more willing to do dangerous jobs, which is true.

The argument is that the most dangerous jobs are supposedly paid higher wages. However, the "sexism" of the dangerous jobs market is irrelevant to the wage gap. Dangerous jobs are not paid more than many less dangerous jobs; in fact, four job groups with high fatality rates are farming, mining, transportation, and construction. These are also the jobs that often require a minimal level of education. Risky jobs in general tend to not earn much more money than the American median with six of the ten most dangerous jobs giving less than 10,000 more than the median. In contrast, the largest gender pay gaps exist within non-dangerous "white collar" jobs. Women, in fact, hold few of the highest paying jobs in America, which are all white collar, e.g., women currently hold 5.8% of CEO positions in Standard & Poor's 500 (companies selected by economists to index the strength of the American economy).

Closing the gap

Closing the gap is imperative in the interests of fairness and to ensure that women are not at risk of poverty based solely on account of their gender. Numerous studies and publications have also demonstrated that there is a solid economic case for closing the gap.

The pay gap is sometimes exaggerated and/or oversimplified in conversations about first-world countries, which is also less than helpful when attempting to have rational discourse on the matter. Though the gap has narrowed sharply in many places in the 1980s, the narrowing has stalled since then. This stall shows that this situation is not going to end by itself and that action is needed.

The gender pay gap will probably not end entirely without huge cultural shifts. However, individual initiatives can have a difference and be good in themselves regardless of the effect on the pay gap. Recent initiatives in this area include Norway ear-marking one-third of the parental leave period for fathers and companies offering more flexible hours to their staff. However, some attempts at encouraging girls to take an interest in male-dominated sectors have proven less than successful.

See also

• Mythbusting the Pay Gap, The U.S. Department of Labour
• Gender Pay Gap, The European Commission
• The Simple Truth about the Gender Pay Gap, American Association of University Women
• Gender Pay Gap by State and Congressional District, American Association of University Women
• The State of Wage Inequality in the Workplace, Hired