The purpose of this paper is to explore the phenomenon of the gender wage gap. Specifically, this study covers its causes and consequences as well as the measured implemented to reduce this global social issue. To succeed with this task, a range of up-to-day literature was analyzed. In order to assure the validity of the retrieved information, the choice of sample was narrowed to the studies carried out by credible organizations, experts, and activists who aim to lessen the gender wage gap. The findings suggest that, presently, gender-based income disparity exists in every country (among 145 studied). The strongest gender pay gap is detected in political and economic spheres; meanwhile, education and health industries reveal less sharp differences in wages between males and females. Besides, the discussed phenomenon tends to increase simultaneously with aging. Moreover, gender wage disparity is connected with racial segregation. In addition, advanced education is considered to be positively related to an enhanced gender wage gap. Overall, this problem remains topical in today’s world.
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The gender wage gap is a significant social problem that affects all states with different intensities. The gender pay gap is defined as the difference between the average gross hourly earnings of men and women expressed as a percentage of the average gross hourly earnings of men (Gender Pay Gap Statistics). The earnings ratio and pay gap are expressed with the following equations:
Earnings ratio = Women’s median earnings/Men’s median earnings
Pay gap = (Men’s median earnings Women’s median earnings)/Men’s median earnings
(The Simple Truth 5). The gender-based disparity of income differs from state to state. For example, the statistics demonstrate that in 2014, women’s gross hourly earnings were on average 16.1% below those of men in the European Union (EU-28) and 16.5% in the euro area (EA-18) (Gender Pay Gap Statistics). Comparing this data to the US gender pay gap, it is appropriate to admit that the American women experience stronger salary imparity, which amounts to 23% (The Simple Truth 3). To understand the nature of this phenomenon, it is worth regarding the gender wage gap as a complex issue that is interwoven with demographics and deeply rooted cultural attitudes. This paper aims to study the causes and reasons for the gender wage gap as well as identify the potential strategies to lessen this global social problem.
Purpose of the Study
In particular, this research will detect the ambivalent tendencies and contradictions that accompany the gender pay gap. Moreover, to understand the present and predict the future trends connected with the discussed issue, it is necessary to identify and analyze the global data about gender wage disparity. Besides, one should accentuate and discuss relations between the gender wage gap and demographics, in particular, race/ethnicity, age, education, and economic activity. Furthermore, it is appropriate to analyze the impact of legal job restrictions around the world in order to comprehend what outcomes these regulations produce in terms of gender disparity. In addition, this study will identify present approaches to mitigating the gender pay gap.
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Results and Discussions
The Contradictions of the Gender Pay Gap
Analyzing the gender pay gap, one should point out that this global social phenomenon is characterized by ambivalent tendencies. For example, full compensation packages serve to assure better social protection; however, they reveal considerable gender payment disparity (Stevenson). Specifically, females are less likely to have an offer of health insurance from their employer, have retirement savings plans, or have access to paid leave, and perhaps as a result, they are more likely to take leave without pay (Stevenson). Undoubtedly, this fact implies that society fails to achieve social equality. Despite the fact that the approaches to protect socially vulnerable individuals (the ill, elderly, etc.) are in action, they support the gender gap instead of eliminating this adverse phenomenon.
Another unexplained gender wage gap fact refers to healthy life expectancy. Specifically, health life expectancy is higher for women than for men. What is especially interesting is that this tendency is typical for developed, developing, and underdeveloped countries (Global Gender 362). This insight implies that overall women remain able-bodied longer than men, which should be an advantage in the labor market. Besides, it also suggests that females require medical assistance less often, which is another benefit for an employer. Hence, increased healthy life expectancy does not lessen wage imparity. Moreover, regardless of the state’s economic development, women are less likely to have cardiovascular diseases, cancer, and diabetes (Global Gender 362). Thinking logically, it is natural to conclude that the health level is nearly the most important aspect of the worker’s value. Therefore, it is expected to be proved by the corresponding salary ratios. Nevertheless, the gender wage gap around the world implies the opposite.
What is worth, the gender pay gap remains as strong as it was 50-100 years ago (Stevenson). This fact is strange because the development of technology, education, advanced social and political institutes are supposed to lessen this imparity. For instance, in today’s world, men and women have equal access to education, and gender job discrimination is forbidden; nevertheless, males continue to earn much more than females. What is even more surprising is that the main percentage of the gender pay gap cannot be explained with such factors as educational attainment, experience, demographic characteristics, job type, or union status (Stevenson). In this context, the question of why women continue to occupy low-wage positions remains unanswered.
Approaches to the Gender Pay Gap Reduction
Understanding that the change should be effective and urgent, the gender income gap is addressed at political, economic, social levels throughout the world. Discussing the strategies that should help to mitigate gender wage disparity, Betsey Stevenson, the associate of the Council of Economic Advisers, claims that the increase in pay transparency can help to ensure non-discrimination since even though employers are prohibited from discriminating, in cultures of pay secrecy, it is more difficult to enforce non-discrimination requirements (Stevenson).
This rhetoric of the White House suggests that the US leaders are concerned with the discussed issue and encourage businesses to become more responsible in terms of avoiding all kinds of gender discrimination at work, including the wage gap.
Similar rhetoric is revealed by the UK government. In particular, starting from 2018 organizations with more than 250 employees will be forced to reveal their gender pay gap (Criado-Perez). This decision is stipulated by the fact that the EU private sector reveals a considerably higher gender gap in salaries; whereas employees who work in the public sector experience a lower wage pays gap Figure 1 (Gender Pay Gap Statistics). This difference can be explained by the fact that the public sector maintains stronger control over economies, in particular, by signing collective agreements with workers and other regulations that assure more transparent and fairer compensations.
The approach to reveal wage gap reports should be efficient in protecting women’s rights for equal job conditions. In this case, monitoring companies gender income imparity will be conducted by the government but, at the same time, current and potential stakeholders will have access to organizations compensation policies. As a result, the release of payment information will seriously affect the company’s reputation, which means that in order to avoid negative bias, businesses will be forced to become more responsible in terms of assuring the equality of salaries.
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Despite the prospective high effectiveness of monitoring the gender pay gap, some experts believe that this strategy is not effective enough to eliminate gender inequality (Criado-Perez). The TUC considers that organizations that create gender disparity of compensations must be fined. Hence, it is hardly possible to solve the gender wage gap problem with the help of this measure. Consider the rationale, evidence from France suggests that companies may choose to pay fines rather than improve gender equality (Criado-Perez). Estimating these findings, one can rightfully assume that businesses’ readiness to pay fines instead of improving job conditions should be financially feasible, which means that the presumed fines are not high enough. On the other hand, even if the fines are enforced, it is impossible to set too high financial penalties because, otherwise, the intensified political pressure would challenge companies sustainability. In a word, it is clear that political leaders and scholars in various states endeavor to decide the same, global problem of the gender wage gap; however, presently, none of the proposed measures are 100% effective.
The lack of effectiveness can be connected with the time variable: politicians and scholars want to reduce the gender wage gap as soon as possible. Nevertheless, this process requires constructing long-run perspectives that are supposed to lead to a thorough action. For instance, during Let Girls Learn event, the World Bank Group introduced an approach to invest $2.5 billion over 5 years in education projects that directly benefit adolescent girls (World Bank Group to Invest $2.5 Billion in Education Projects Benefiting Adolescent Girls). In frames of this project, to 2020, teenage girls (from 12 to 17) from South Asia and Sub-Saharan Africa will receive competitive education (World Bank Group). This decision is supported by the statistics that secondary school education is correlated with an 18 percent increase in a girl’s future earning power (World Bank Group).
The strategy to arm young females with the skills needed for occupying well-paid positions is thoughtful. Without a doubt, it will bring a certain positive result. Hence, this approach evokes two challenging speculations: firstly, it is unclear, or even improbable, that invested money will be returned even in the long-run. Consider the rationale, secondary education can hardly correlate with increased wages because it allows occupying only the positions with minimum salaries, which can be achieved even without education. To receive a college or university degree, these young women will need money, which they obviously do not have, otherwise, enrollment in a secondary school would not have been an issue. The second challenging idea is that, as it has been identified above, the gender wage gap is poorly related to the level of education. Therefore, even though educating young females from underdeveloped areas is a benevolent and noble approach, its effectiveness in terms of addressing salary disparity is dubious.
Legal Restrictions that Intensify the Gender Pay Gap
In contrast to the approaches aimed at reducing the gender wage gap, one can distinguish those that by striving to protect females trigger salary disparity as a side effect. As a result, there are many legal restrictions that increase gender gap disparity (Bin-Humam, Kushnir, and Ramalho 2). Studying the geography of the gender wage gap, it is appropriate to accentuate the following restrictive policies. Scholars reveal that 44 economies restrict the working hours of women and 71 limit the industries in which they can work (2). To some extent, such restrictions exist in every state, but they are the most intense in South Asia, the Middle East, and North Africa (2). For instance, Azerbaijan and Poland have a separate list of work considered especially strenuous or harmful to women’s health in which it is prohibited to employ women (2). Besides, females are prohibited to work in mines in Slovenia, Mongolia as well as in many other states (2). Moreover, Bolivian women cannot work in dangerous and unhealthy positions and those that require heavy lifting (2). Furthermore, females in Jamaica are forbidden to take night shifts except for such industries as packing fruit, nursing, and hospitality (2). Without a doubt, jobs that require strength, physical endurance, as well as those that are hazardous for one’s health are better paid because of these reasons. Therefore, these benevolent restrictions contribute to the gender pay gap.
What is more, assessing the impact of gender job restrictions, it is necessary to discuss parental leave regulations. It goes without saying that parental leave contributes to gender salary disparities. Consider the statistics, the study conducted in the US in 2002 revealed that there was a 16 percent motherhood wage gap for one child and a 29 percent gap for two or more (1). In this respect, the strongest wage gap burden was imposed on women with a college degree. This peculiarity may be explained by the fact that a college education provides more opportunities for building a career, which often has to be sacrificed for the sake of motherhood. Given that in many cases parental leave is necessary, this policy serves to assure benevolent social conditions for women and their offspring. Hence, the accompanying reduction of income (or the absence of income) combined with the lost skills and/or opportunities enhance the gender pay gap.
Scrutinizing the above-discussed regulations that increase the gender wage gap, it is possible to conclude that these restrictions occur as an attempt to protect women and organize the working process in the most effective way. In other words, even though the policy towards gender job division is discriminative, many regulations are fair and reasonable. Therefore, to change the situation with the wage gap, it is appropriate to improve the manufacturing process.
Gender Pay Gap is Positively Related to Demographics
Gender and the Racial Wage Gap
It is important to understand that the gender wage gap is connected with a number of demographic particularities, for example, race/ethnicity, which has tangible negative outcomes. Experts believe that racial discrimination is predefined by white people’s reluctance to compete with blacks (Sundstrom 5). As a result, even though slavery was eliminated years ago, black individuals enjoy limited job options, and those choices are ranged from blue-collar occupations that do not require good education (5). To avoid competition blacks were commonly excluded from supervisory jobs especially in cases that might involve supervision of whites, which would violate accepted norms of the racial hierarchy (Sundstrom 5). In these conditions, black women experience even a greater wage gap comparing to their white compatriots.
The Gender Wage Gap and Age
In addition, it is noticed that the pay gap increases within age (Stevenson). In other words, after graduation students start to get relatively similar salaries (even though from the very beginning males often receive higher salaries than females). Hence, with the development of their careers, payment imparity continues to grow. As a result, this tendency seriously affects women’s pensions. Consequently, the life of the retired females is doomed to be less financially protected due to the existing salary disparity. The data that illustrates the growth of the gender wage gap within the age can be found in Figure 2 (Gender Pay Gap Statistics).
The present statistics displays the connection between gender salary disparities among the UE states. As it is seen, the wage pay gap varies significantly from one country to another. In general, it is the smallest in Slovenia and the biggest in Estonia (Gender Pay Gap Statistics). Despite considerable statistical differences, one can observe a clear pattern of the wage gap growth that accompanies the aging process. This phenomenon is explained by the fact that women take more time off because of family reasons. Nevertheless, this peculiarity alone can hardly explain increasing salary disparity.
Given the premise that this unequal compensation does not depend on one’s personal and professional qualities, it is natural to suggest that the growing gender pay gap is caused by corresponding discrimination. Besides, it is possible that payment disparity stems from the deeply rooted biases, which have remained from the times when males were more skillful and possessed greater social power. In either case, it is clear that the gender wage gap should be lessened.
The Gender Wage Gap and Education
A lot of people believe that that gender gap disparity can be mitigated by providing women with a better education. This premise must be correct; however, the studies of the current situation with gender salary imparity prove that this issue is ambivalent. For example, it is detected that advanced education is positively related to the highest level of the gender pay gap Figure 4.
What is even more surprising is that in today’s world there are more female than male students getting advanced education. This claim is supported with the corresponding statistics 60 percent of all bachelor’s degrees and the majority of graduate degrees (Sawhill). Taking into account that there are more women with advanced degrees than men, but gender the pay gap is wider for this category of people, one can deduce that this issue cannot be resolved solely with the help of education. Striving to explain what withdraws women with post graduate-degrees from getting higher salaries experts suggest that wage disparity is predefined by females’ job choices (Sawhill). In particular, they are more likely to take time off to dedicate more attention to various family needs. In other words, women strongly adhere to the idea of work-family balance, which prevents them from focusing on earning money and building careers.
The Gender Wage Gap and Economic Activity
Gender pay gap greatly differs from industry to industry. The data that supports this claim is revealed in Figure 5. This statistics displays that around the EU states, the biggest gender disparity of income is detected in financial and infrastructure spheres; professional, scientific, and technological activities; information and communication, and manufacturing (Gender Pay Gap Statistics). Moreover, a moderate gender wage gap can be observed in the spheres of business economy and real estate activities (Gender Pay Gap Statistics). At the same time, a half of the EU states express negative gender gaps in the areas of the water supply, sewerage, waste management and remediation activities (Gender Pay Gap Statistics). In addition, almost a half of the EU countries display a negative gender wage gap in the construction industry (Gender Pay Gap Statistics).
This data reveals positive tendency towards decrease of the gender wage gap in the EU area. Besides, considering the above-discussed approaches of the EU leaders to monitoring and reducing this issue, this tendency is expected to strengthen in the near future. The next section is aimed at discussing the peculiarities of the gender wage gap around the world.
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The Statistics of Gender Wage Disparity around the World
The World Economic Forum studied the situation with the gender pay gap in 145 countries and received the following results. Presently, none of the states managed to totally eliminate gender salary disparity. Nevertheless, the report highlights that the five Nordic countries and Ireland have closed more than 80% of it (The Global Gender 7). In contrast, the toughest gender wage gap is detected in Yemen (7). In general, the findings of the World Economic Forum reveal that 25 states managed to close the gender pay gap in educational industry (7). In addition, 40 countries eliminated gender income disparity in the health and survival industries (7). The report accentuates that the number of states that succeed in closing the gender wage gap increases annually, which is definitely a positive tendency (7).
First and foremost, this fact is predefined by the difference in wages between the four main segments: politics, economy, education, and health. Given, the pay gap was initially smaller in the education and health industries, it is logical that these spheres managed to eliminate the gender wage gap first of all. Undoubtedly, it is a positive accomplishment. Hence, it would not be significant to observe the general gap ratio because politics and the economy are much more profitable and, as it is revealed in Figure 6, these segments display a serious gender pay gap. Therefore, the overall statistics remains alarming. Endeavoring to explain the nature of imbalanced disparities in these 4 sectors, the World Economic Forum assumes that it is caused by women’s choice of typical female professions (teachers, nurses) (7). Additionally, female tends to choose a job that allows carrying family responsibilities (7). These and other above-discussed reasons inhibit the elimination of the gender pay gap around the world.
Summing up the above-mentioned, it is necessary to emphasize that the gender wage gap remains a topical global issue that is being addressed by political leaders, financial and social organizations. Specifically, the presidents of the leading EU states, the US president, and the World Bank strive to construct effective measures that can lessen the gender wage gap. Among these initiatives, one can distinguish compulsory reports of organizations regarding their wage gaps; corresponding fines for failing to lessen gender salary disparity; and educational programs for adolescent girls from developing states. The gender wage gap reveals the difference in earnings between males and females, particularly, it displays that, in general, women’s salaries are considerably lower than men’s. Presently, gender wage disparity around the world is strongly manifested in politics and the economic sector; meanwhile, the spheres of education and health experience significant reduction of this gap. Moreover, this study detected that the gender wage gap was related to such factors as age, ethnicity, education, and economic activity. In particular, the discussed social problem tends to intensify within the aging process. Besides, the higher the level of education is, the stronger the gender wage gap becomes. Furthermore, in terms of economic activities the gap is higher in financial industries, as well as in technological and scientific spheres. In addition, former racial segregation of black people predefines that the wage gap is stronger for black women than for their white contemporaries. What is more, it is appropriate to highlight that the gender wage gap is intensified with the legal regulations that aim to protect women and increase the effectiveness of manufacturing. Hence, the restrictions stipulated by these laws contribute to the increase in the wage gap between males and females. Finally, this paper points out to the contradictions between the factors that predefine the level of payments and the actual salaries received by both genders. In particular, healthy life expectancy for women is higher than for man, which suggests that females are more valuable employees. This premise opposes a considerable wage gap that reveals the depreciation of women’s labor; this and other ambivalent factors that correlate with the gender wage gap remain unexplained.