Http://wiki.ubc.ca/GRSJ224/Pay Gap

Gender Wage Gap

The Gender Pay Gap refers to the notion that there is a substantial difference in wages and earnings between men and women. Statistics confirm that women earn less than men annually in many countries. Historically, women began to join the workforce in Western countries during the 1910s in order to fill the labor gap during the First World War. When the soldiers returned, the women were expected to return to a domestic lifestyle, despite the fact that many began to enjoy their time on the payroll. Moreover, they wished to obtain their own wages in order to help ensure the well-being of their family. Though the women worked similar or even the same jobs as men, they were not granted the same pay. This discrepancy led to the wage gap we have today. Even though the gap is not as prevalent in today’s society, it still exists to some extent. The gap confirms that gender discrimination continues to exist in the workforce. There are many reasons as to why women are said to earn less than men but economists point to two very distinct factors to explain why: They believe that there are “gender specific factors in that they relate specifically to differences between women and men, either in their qualifications or how they are treated.” Others debate that it has more to do with the gender discrimination not qualification, education or position holdings between men and women.

Info graph of the Gender Wage Gap

Women's Earnings as a Percentage of Men's, 1951–2011

Overview

In order to clearly see discrepancies in wages between men and women, the median wage must be obtained for both men and women. The full- time, full year wages must be taken into account in order to obtain the median wage. The gender wage gap is said to come about due to many reasons. Some women have to leave the work force and return later on due to familial duties and responsibility. When they leave they lose their standing in the job they are in and in turn they lose the pay they received when working in that job. Moreover, once they decide to go back into the workforce, they are unable to go back into their previous jobs because other people have been given their jobs. Another reason some people believe is that women do not strive for a higher level of education. Without those credentials, they are unable to earn larger earnings or wages that come from more specialized jobs. This reason; however, is losing validity due to the fact that women are graduating from college and graduate school and they are receiving degrees that should ensure jobs and earnings of a higher caliber. The most prevalent reason is that there is a large discrimination when it comes to employers employing men over women no matter how remarkable the woman’s resume is compared to the man. Many companies and work forces believe that women are unable to efficiently work in a mostly male dominant job. Moreover, if they do hire women for those particular jobs, they do not receive the same pay because employers think that a man could do a better job or that women do not have any real prowess in their work. “Statisticians estimate that as much as 10 to 15 % of the gender wage gap is due to discrimination.” Many policies are made by the government in order to ascertain the differences in the wage gap. An example of this would be the Pay Equity Act in Ontario, Canada. The act states that the wage gap does come from gender discrimination in the workplace compensation practices. The act hopes to persuade employers to “establish and maintain compensation practices that that provide for pay equity by comparing female job classes and male job classes and adjusting the job rates of female job classes so that they are at least equal to the job rates of comparable male job classes based on skill, effort, responsibility and working conditions.”

US Gender Gap

Over Time

Women began working during the 1940s in order to compensate for the loss of labor when the males went to war. The females needed to maintain earnings in order to provide for their families. After some time, women began to enjoy their new positions in the work force and in society. However, the women were paid much less compared to the men. They were paid less than the approved minimum wage at the time. Women became disgruntled with the pay they were receiving because some of them were working similar jobs and hours as the men but they were not being compensated in the same manner. In 1963, the Equal Pay Act was implemented in order to gain equality in earnings between men and women. Since then, the gap has been closing. Yet, it has been closing fairly slowly. In 1963, women who were working full-time, year-round made 59 cents on average for every dollar earned by men. Today, women earn 77 cents to every dollar earned by men. On average the wage gap is closing about 1 cent per year. Clearly, the gap is not going to close any time soon if action is not taken to remedy the situation. Women have become disgruntled by the injustice and inequality that goes on in the workforce. Feminism and feministic views have advocated in order promoting the idea that women are just as capable and qualified in handling male-dominated jobs. They state that even though women are seen to be more “fragile” and “delicate”, they have the caliber and determination to obtain higher pay and earnings. Moreover, they are furious that over the last 40 years men have been earning over $2 million dollars in earnings compared to the women’s earnings of $700,000. Evelyn Murphy, an economist who is the president of The Wage Project, “estimates that over a lifetime (47 years of full-time work) this gap amounts to a loss in wages for a woman of $700,000 for a high school graduate, $1.2 million for a college graduate and $2 million for a professional school graduate.” Many people have varying ideas as to why the discrepancies come about. Some believe there is no difference between the earnings and some believe that there is. Still it is hard to completely validate the claim and much more data and statistics is needed to allow this discrimination to be truly seen as a problem in the work force.

77 cents for every dollar

By Countries/Regions

• United States

In the United States, the median annual earning for female full- time workers is 76.5% of men’s earnings based on the statistics in 2012. During 1951, women made 64 cents for every dollar that a man made. The data shows that the gap has closed slightly but women are still at a disadvantage compared to their male counterparts. Every state has a wage gap but some are worst then others. In Washington D.C. the wage equality is at its highest because women are paid 91 cents for every dollar that a man makes. The same cannot be said for a state like Louisiana which has shown that women make 66 cents for every dollar that a man makes. To add to the gender wage gap, women are given even less pay when they are of differing ethnicities or cultures. For example, colored women are discriminated against when it comes to earnings and wages. In the U.S. African American women and Hispanic/Latino women are shown to have the largest pay gap, whereas Asian American women have the smallest gap for wages. Other factors that hinder women from earning similar wages as men are age and education. Women of older age obtain fewer earnings than men at the same exact age. “Women typically earn about 90 percent of what men are paid until they hit 35. After that median earnings for women are typically 75–80 percent of what men are paid.”When it comes to education, no matter what degree or level of education women obtain, they are unable to breach the gap. “Women’s median earnings are less than men’s earnings, and in some cases, the gender pay gap is larger at higher levels of education.” The women have received a higher degree and more education, but the men have also. Moreover, when it comes to an employer choosing between a male and female with the same credentials, the man will more times than not be chosen over the female. “The median annual earnings for full-time, year-round women workers in 2012 was $37,791 compared to men’s $49,398.”

Percentage Gap Between Median Men's and Women's Wage for All Full-Time Workers (2006- Last Year Avaliable

• Canada

In Canada, almost half the workforce is made up of women. In 2013, the workforce was made up of 47.3% women. This was a slight improvement to the 45.7% in 1999 and 37.1% in 1976. Little by little, women are closing the gap between men and women in the labor force; however, women’s participation still trails that of men. Employment rate also shows that women being disregarded as capable workers in society. “In 2013, the employment rate for women aged 15 and over was 58.0% compared to 65.8% for men.” Employment rate for women is much lower than that of men.

In order to breach the gap between males and females in wages, women have chosen to further their education in order to obtain higher degrees which will eventually allow them to obtain higher paying jobs. Sadly, a higher education does not ensure that the female will receive the job over a male counterpart. Women’s skills are seen to be only useful when it comes to service sector while men’s skills are regarded as valuable in the goods sector. Although the women have eased into mostly male dominant trades and tasks, they still have low representation in these male- dominant jobs.

“In 2011, women accounted for only 14% of registered apprentices, and were concentrated in certain trades, including as hairstylists (80%) and cooks (about 30%), with small proportions in other trades. For example, women account for only 2% of carpentry apprentices, 1.9% of plumbing apprentices, and 1.5% of heavy equipment mechanic apprentices.No matter the discrepancies though, women have continued to register in non-traditional jobs and they will continue to increase their number as time goes on. Not only can one see discrimination in the jobs given to females and males, but a person can also see discrimination when it comes to the pay wage.

Women in Canada earned an “annual income of $30,100 in 2008, which was a 13% increase from 2000.” Men’s wages are more rewarding then a women’s wage pay. This is where the gender wage gap comes to light. For every dollar that a man makes, a woman makes 87 cents (This is a 10 cent increase from 1981).

Indigenous People in Canada

Discrimination based on gender, ethnicity and indigenous identity have been identified as root causes for insignificant treatment and exclusion of indigenous peoples. At the same time, indigenous women and men face serious and persistent obstacles in gaining access to decent work, including productive and freely chosen employment and social protection. Work performed by indigenous workers in particular, tends to be low-paid, with no social protection and sometimes with high risks for health and safety. Indigenous peoples continue to be over-represented among the poor, the illiterate and the unemployed. In 2006, the median income for Indigenous people was $18,962 — 30% lower than the $27,097 median income for the rest of Canadians. Moreover, income inequality persists no matter where Indigenous people live in Canada.

• Australia

In Australia, the gender wage gap is shown through the annual earnings for full time workers. The median for the gap in Australia is 17.5% which has stayed virtually the same for almost 20 years.A study by NATSEMiv estimates “that 60% of the wage gap is due to either direct discrimination or other factors to do with being a woman. The only reason that women are being treated differently in the labor force is because they are women. It is not because they are less qualified for the jobs or that they have a lesser education. It is based off of complete and direct gender discrimination.

• Europe

In the European economy, women are shown to make 16.4% less earnings then men on average. Again the discrepancies are said to show up due irregularities in age, education, skills and responsibilities of women. Also, depending on the region of Europe they lived in the women either received slightly more or slightly less pay. Moreover, the men are said to work longer and harder hours then the women. Due to this, the men are paid more than the women because they “work harder” then the women do. All in all, Europe is exactly like the rest of the nations in that the women on average make 17% less earnings then a man does just because they are female and not because of their credentials.

• Asia

Asia is shown to have the largest wage gap out of the rest. Asian women are said to have a 38.2% income gap compared to men. This average in Asia is higher than the average global income gap which is said to be 33.6%. The enormous gap is blamed on the ongoing traditions and cultural views on women and labor. Women are thought to only be allowed to do domestic work and nothing in the labor force. Women expect to make less money than men when in the work force so they tend to choose less paying jobs in order to make an earning to life in society.

• Latin America

In Latin America, it is the women who tend to have a higher education then the men but they are still paid less than the men because of gender discrimination. The reason for this is because women are pushed towards the “lower-paid occupations such as teaching, health care or the service sector.”The men earn 17% more in wages then women in Latin American countries. The pace has begun to lessen but there is still a wide enough gap that causes women to feel lesser in intelligence or manual labor. The females hope to change gender stereotypes so that they are not hindered from joining male dominated jobs.

The gender wage gap has been seen to drop from 25% to 17 % from 1992 to 2007.Women only hold 33% of better paid professional jobs such as law, medicine, architecture and engineering. “In these professions, the wage gap between men and women is significantly higher: 58 percent on average.” Most of the higher paying jobs call upon skills in education that most women do not venture in to. Men tend to center their education on quantitative skills. Regrettably, most women put more emphasis on areas of study such as nursing or teaching which do not call for very difficult aspects and skills in the workforce.

Due to this, employers choose males over females because they assume that the female does not have these cognitive capabilities like the men do. The problem that arises is that there are women who actually have this higher aspect of learning, but employers assume that they do not because they have a preconceived notion of women. From this misguided belief, the women are passed over for the higher paying jobs and wages because of the stereotypes and discriminating factors that are associated with being a woman.

Solutions/Acts/Policies

If the pay gap was closed significantly the economy of that country would benefit because more money would be made and more jobs would be worked as efficiently as possible because capable and certified people, man and woman, are working in the right jobs for their levels of education. More talented staff will be selected to work in businesses that need the best of the best to keep their companies running. Moreover, if businesses gave equal opportunities to women and men then the talents from both genders will significantly aid the businesses in their markets. More skill and creativity will be taken into consideration and it will be implemented in order to ensure more earnings and profits. Basically, the equality between the genders will create increased performance overall.

Also, if both genders are treated equally there will be less lawsuits and legal discrepancies. The lawsuits only bring about frustration and anger on both parts as well as precious time and money that could be used to further along the profits of the company and the employees. That is why the Equal Pay Act (EPA) was implemented. It is a “federal law that prohibits pay discrimination on the basis of sex. It requires that employers pay similarly situated employees the same wage, regardless of sex.” The reason for this was to ensure justice between the genders in order to take advantage of the skills that both genders can contribute to in the workforce.