Thursday, 4 October 2012

Gender Equality in the Workplace: More than Just Same Salaries for the Same Jobs

One of the many endemic issues of the workplace is the unequal pay for men and women. Despite performing the same work, women make a fraction of men’s annual salary. However, does this gap represent an evil attempt by corporations to reinforce the subjugation of women or are there other factors that must be addressed when considering the wage gap? This article would like to delve into the concept of gender equality in pay wages to understand why these wage gaps continue to persist despite legislation advocating equal wages.   

According to the data collected by the Office for National Statistics annual survey for hours and earnings, a man’s median annual salary is £28,091 compared to a woman’s median annual salary of £22,490, a difference of 19.9% while 24.1% of men who work full-time also earn overtime pay while only 12% of women in the same position do. Even if we remove the different earnings from overtime pay and include women’s maternity pay into the equation as well as the fact that more women work part-time than men, the stats show that men earn 10.2% more in hourly full-time pay than women.[1]

Although the gender wage gap still persists, the gap itself is not ignored and efforts have been made to reduce the gap. Various laws such as the Equal Pay legislation in the U.K. and the Equal Pay Act in the U.S. have been passed to address the wage gap, preventing gender from being used as a means to discriminate against hiring a worker and giving women the legal right to be paid an equal wage to men. However, despite these legislative efforts, gender differences still correlate with wage differences. Although the wage gap have decreased in the past decade from 16.3% in 2000 to 10.2% in 2010, the figures broken down by gender, geographic location, and type of job still show that there is a gap in hourly wages and overtime pay.[2] Furthermore, the wage gap has not improved significantly in recent years, women’s earnings only becoming 77.4% of men’s in 2010 in the U.S. compared to 77% in 2009.[3] Furthermore, progress in closing the wage gap has been quite slow since 1963 when the Equal Pay Act was signed. Women earn on average 77 cents to the men’s dollar in 2010 compared to earning 59 cents to the dollar in 1963 which means that the wage gap closes at a rate of about 0.5% a year.[4] Although the gap is closing, the rate at which it is closing is too slow given the significant costs the gap entails.

This wage gap represents a significant economic loss for women and imposes significant social costs to society because it creates unintended disincentives. Although the wage gap exists in most jobs, the size of the gap differs depending on the type of job.

Although the gap seems to be quite small or even reversed in jobs related to the social services or education, the gap is significant in fields that require highly educated workers such as lawyers or doctors. According to economist Evelyn Murphy, high school graduates lose $700,000, college graduates $1.2 million, and professional school graduates $2 million due to the wage gap.[5] The Fawcett Society in the U.K. supports these findings, that the pay gap varies across sectors and regions which can rise up to 55% in the finance sector and up to 33.3% in the City of London.[6] Although the gender gap affects most women, it significantly disadvantages women who seek highly competitive professions that require a high education or professional expertise.

It is hard to determine what causes this gender gap between men and women. The Fawcett society argues that this gap results from persisting discrimination against women, women’s work being undervalued, and the motherhood penalty. The Fawcett society argues that outdated gender norms still persist in the workplace which leads to men and women doing different types of work with men’s work being given higher economic and social value. Even within society, jobs traditionally done by women such as cleaning, catering, and caring are undervalued while masculine work like construction, transportation, and skilled trade remain in high demand. Although the first two issues are social biases that society can overcome by understanding and accepting gender equality within society, the motherhood penalty is a interesting conundrum that society will need to address as an aspect of gender equality.

The motherhood penalty is an interesting conundrum because the penalty itself can be a reasonable explanation for the gender gap. The story of firm specific skills regarding the gender wage gap is that firms seek individuals with experiences and qualifications that employees have built over time and are of particular value to an employer.[7] These firm specific skills are of great importance because these skills make the employee irreplaceable due to their expertise. Firms “are afraid that women are more likely than men to resign from their job at some point (to give birth and take care of children) are more reluctant to assign jobs that lead to such firm specific skills for women,”[8] and thus pay women less than men for the same position because women build up less of those crucial firm specific skills and thus have less expertise for the same position.

Although this argument is interesting, the argument implies that for jobs where firm specific skills are rare, women and men should have equal pay. However, a study by Isabel Fernandez on 250 temporary employee wages, a profession where employees should not be able to develop specific firm skills, found that even in temporary jobs working for 462 different companies, women earned on average $25.08 per hour while men, with the exact same job and qualifications, earned on average $29.66 per hour.[9] Although the firm skills theory seems be a rational explanation for the gender wage gap, it is not the only factor contributing to unequal wages.

The wage gap is a gender equality issue that truly represents one of the current flaws in society and the costs this inequality entails. The gender wage gap costs women $700,000 to $2 million over their lifetime and results not from their lack of specific skills but from simple discrimination due to gender. Women should be given equal pay for equal work, especially if both genders are working as temporary workers who do not develop any expertise that would justify differential pay. The gender wage gap not only penalizes women with a significant lifetime cost, it also disincentivizes women from pursuing work with generally high pay such as brokers or doctors due to the lower wages they earn. The gender wage gap represents the costs of inequality clearly and how they unfairly penalize individuals for uncontrollable factors.

[1] Simon Rogers, “International women’s day: the pay gap between men and women for your job,” Data Blog
[2] Rogers, “International women’s day: the pay gap between men and women for your job,” Data Blog
[3] National Committee on Pay Equity,
[4] National Committee on Pay Equity, “The wage gap over time,”
[5] National Committee on Pay Equity, “The wage gap over time,”
[6] Fawcett Society, “Equal pay – The Facts,”
[7] Freek Vermeulen, “the differences between men and women – sexist or functional?” Forbes,
[8] Vermeulen, “the differences between men and women – sexist or functional?” Forbes
[9] Vermeulen, “the differences between men and women – sexist or functional?” Forbes

By Khan Kikkawa

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