Context: Prof. Claudia Goldin received the economics Nobel Prize(2023) for her study of women’s earnings and employment. Goldin was able to demonstrate that variations in education and occupation historically accounted for a large portion of the gender wage gap after studying more than 200 years’ worth of US data.
What is gender wage gap?
The gender pay gap – a woman being paid less than a man even when both are performing the same role in a company – may sound like an exception.
But it’s so prevalent that it’s rather a norm across the world.
- India has climbed eight places in the annual Gender Gap Report, 2023, and is ranked 127 out of 146 countries in terms of gender parity, from 135 last year.
- As of 2023, an International Labour Organization (ILO) report reveals a 27% gender pay gap in India. On average, women earn 73% of men’s earnings for the same job. In specific industries like technology, this gap widens further, with women earning only 60% of men’s income.
- According to the National Sample Survey, women spend 299 minutes a day on unpaid domestic services for which men spend only 97 minutes. Only 22% of women aged 15-59 years were engaged in paid work in comparison to nearly 71% of men. When factoring in unpaid work, the gender pay gap widens even more.
The gender pay gap in the Indian workforce is a multifaceted issue with deep-rooted social, economic, and cultural factors:
- Occupational Segregation: Women tend to be concentrated in lower-paying, traditionally female-dominated professions, perpetuating the pay gap.
- Female-dominated fields like teaching and nursing typically offer lower salaries compared to male-dominated sectors like engineering and IT.
- Motherhood Penalty: The transition to motherhood often leads to a pay gap due to limited access to maternity leave, inadequate childcare support, and societal expectations.
- Gender Discrimination: Deep-seated gender biases and stereotypes result in unequal pay, even when educational qualifications and experience are similar.
- According to Mercer’s recent remuneration trends survey(2023), India’s gender pay parity in February was 1.8%. At the para-professional level, the gap is 1.4%, while at the executive level, it widens to 2.5%. This translates to a male executive earning Rs 50 lakh annually, while a female executive at the same level earns Rs 48.75 lakh.
- Lack of Representation in Leadership: The underrepresentation of women in leadership roles limits their ability to negotiate for equal pay and address workplace biases.
- The IIM-A study(2022) shows that women’s representation in the top and senior management of companies in India is significantly lower than the percentage of women on the board of directors.
- Cultural Norms and Expectations: Societal norms that dictate women’s roles in the family and workplace can hinder career growth and earning potential.
- Traditional expectations of women to prioritize family life over their careers can result in reduced opportunities for professional advancement.
- Glass Ceiling Effect: A glass ceiling hampers women’s upward mobility in organizations, preventing them from accessing senior roles with higher salaries.
- Educational Disparities: Disparities in access to quality education can limit women’s entry into high-paying sectors.
- Intersectionality: Women belonging to marginalized communities face compounded disadvantages due to both gender and social disparities.
- Dalit women in India often experience higher levels of discrimination and wage gaps due to their intersecting identities.
To address the gender pay gap in India, several steps can be taken:
- Equal Pay for Equal Work: Enforce laws that mandate equal pay for equal work, regardless of gender. The Equal Remuneration Act of 1976 in India prohibits wage discrimination based on gender. It serves as a legal foundation for ensuring gender pay equality.
In 2018, Iceland enacted a law mandating that organizations with over 25 employees demonstrate equal pay for equal work between men and women. Non-compliant companies face daily fines and certification revocation.
- Wage Transparency: Encourage organizations to be transparent about wages and benefits to reduce pay disparities.
- Example: Australia recently enacted a law mandating companies with over 100 employees to disclose their gender pay gap, aiming to encourage corporate action to eliminate disparities.
- The BCCI recently announced equal match fees for both men and women among its centrally contracted players, marking a significant and commendable equity pay policy.
- Promote Gender Diversity in Leadership: Encourage organizations to appoint more women to leadership positions.
- Address Bias in Performance Evaluation: Implement unconscious bias training and ensure objective performance evaluations.
- Family-Friendly Policies: UNICEF advocates for family-friendly workplace policies, including paid leave for both parents to meet their children’s needs. This encompasses paid maternity, paternity, and parental leave, as well as leave for caring for sick young children.
- The Maternity Benefit Act 2017 amended the 1961 Act, extending paid maternity leave from 12 to 26 weeks, providing mothers with more time and financial support during motherhood.
- Equal Access to Education and Skill Development: Improve access to quality education and skill development for women.
- The “Beti Bachao, Beti Padhao” campaign in India aims to improve the educational and skill development opportunities for girls, potentially narrowing the gender pay gap.
- Support Women Entrepreneurs: Facilitate entrepreneurship opportunities for women through loans and mentorship programs. Ex- Skill India Mission
- The “Stand Up India” scheme provides loans to women and Scheduled Caste/Scheduled Tribe entrepreneurs to promote business ventures.
- Gender Sensitization and Inclusive Work Culture: Promote gender sensitization and inclusive work culture through training programs.
- Advocacy and Awareness: Encourage advocacy and awareness campaigns to raise public consciousness about the gender pay gap.
- The “Equal Pay International Coalition” initiative, supported by UN Women, promotes equal pay for work of equal value, leading to global awareness about pay equality issues.
Achieving UN Sustainable Development Goal 8, which emphasizes full and productive employment, decent work, and equal pay for all, by 2030 is not just a matter of social justice for working women, but it is also pivotal for fostering overall economic growth and gender equality within a nation.
Closing the gender pay gap is a vital step towards realizing these goals and building a more equitable and prosperous future for all.