Employee rights and responsibilities part 11: How big is the gender based pay gap?
March 4th, 2009Employee rights & responsibilities 9 CommentsIn last week’s discussion, I wrote about the importance of the concept that male and female staff should be entitled to receive substantially similar levels of remuneration when performing work of a substantially similar nature.
Today, I would like to briefly examine some evidence relating to the magnitude of the problem of gender based discrimination in remuneration practices.
A simple, but not so useful measurement
The simplest and most common measurement of gender based equality in remuneration levels compares the Average Weekly Earnings for full time female staff with their male counterparts. In this regard, the average earnings of women employed on a full time basis in America is equivalent to just seventy-five per cent of that of a full time man. (refer article)
At first glance, it would be tempting to look at this statistic and conclude that gender based discrimination in remuneration practices is rampant across America.
But the above measurement paints a somewhat misleading picture, and the gender based pay gap which it implies does not necessarily represent incontrovertible evidence of discrimination in remuneration practices.
Men and women are not the same. Overall, neither gender is superior or inferior to the other. Nevertheless, each exhibits differing tendencies with respect to a wide range of employment related matters and decisions. Such differences include, but are not limited to, the type of industries in which they are employed, educational qualifications, levels of managerial responsibility and authority, family related decisions, preferences for part time or full time work, and time spent in and out of the workforce.
As a result of these differences, one would not expect the average earnings of women and men to be equal, even in absence of any form of discrimination based upon gender. Accordingly, measurements which merely tell us what we would expect (that a gender based pay gap exists) are of limited value in terms of understanding the impact of gender based discrimination upon modern remuneration practices.
A more revealing study
In order to gain a clearer picture with respect to the gender based pay gap, it is necessary to examine its nature and composition in greater depth, and to attempt to identify and quantify any factors which are known to contribute toward the gap.
In this regard, an American study completed in 2007 by AAUW researchers Judy Goldberg and Catherine Hill is of significantly greater value.
In this study, the researchers attempted to explain away the pay gap using twenty-six variables which are known to affect remuneration levels. Their conclusions – even after excluding the effects of such factors, the average American woman who is employed on a full time basis still earns approximately five per cent less than her male counterpart one year after completion of her studies. This pay gap increases to twelve per cent ten years after graduation.
Accordingly, it would appear that average remuneration levels of American women are below those of their male counterparts even when performing work of a substantially similar nature.
Does this necessarily indicate discrimination?
Probably, but not necessarily.
It is likely that a portion of the gender based pay gap referred to above can be attributed to discriminatory practices in remuneration. But it is also possible that unknown factors, or factors for which the effect is not possible to estimate or quantify also account for some portion of the unexplained gap.
For example, Goldman and Hill themselves acknowledge the possibility that part of the gap could represent a manifestation of the individual bargaining process as opposed to gender based discrimination. For example, it is possible that women have an overall tendency to: (a) be less assertive than men during salary negotiations; (b) have lower salary expectations than men; or (c) prefer remuneration arrangements which are less competitive in nature, as opposed to the ‘winner takes all’ schemes which are preferred by some men.
To the extent that such tendencies contribute to the gender based pay gap, they do not necessarily represent a form of unfairness or injustice. In any form of bargaining, those who adopt a more assertive negotiating position tend to derive more favorable outcomes than those who don’t.
Salary negotiations are no exception, and individual staff may achieve varying results according to the manner in which they negotiate, even when compared to others in similar roles within the same industry or even within the same firm.
It’s not necessarily unjust – it’s simply the nature of the bargaining process.
But surely some discrimination is occurring
Nevertheless, given the results of the Goldman and Hill’s study, I find it very difficult to believe that modern remuneration practices are completely free of gender based discrimination, particularly in America and probably in many other parts of the western world.
To the extent that this is indeed the case, such practices represent a breach of the human rights and not be considered to be acceptable.
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