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.
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. 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. 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.
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.
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. 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. 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,”
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. 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.
