Gender Pay Gap and Long Road Ahead

Recently, BBC China Editor Carrie Gracie quit her job, challenging the wide gender pay gap prevalent at the BBC. Now, the Ministry of the Digital, Culture, Media and Sport Committee is waiting to hear oral evidences from Carrie Grace and other BBC Women journalists. The BBC refuted the allegations saying that there is “no evidence of gender bias in pay decision-making”, the Independent reported. “I didn’t want more money—do you understand—I wanted equality,” said veteran journalist 

Carrie Grace to BBC Radio’s Woman’s Hour, earlier last month. The broadcaster commissioned a review which was conducted by PricewaterhouseCoopers. The review said that the gender pay gap was because of a “lack of clarity and openness about how salary decisions were made and an absence of pay ranges for on-air roles”. 

However, BBC Women, a representative group, said that they were excluded from the process. British news organisations have reported that inside BBC the pay gap for on airpresenters and other news related other roles is 6.8%. In lower-profile roles, a gap is seen mainly “driven by broad pay ranges and by the mix of men and women at different levels” of 12.6%. 

These accusations made on BBC News has brought to light how some of the major corporations of the world pay their male employees differently from their female employees. In Britain alone about 500 organisations revealed that there is a pay gap, according to a report that came out last month. 

Big organisations in the UK, that had 250 or more employees, were asked to publish their data. It was revealed that: 

1. At least half of the organisations paid women one-tenth less money per hour. 

2. 80% of the 527 organisations which published their results paid men more per hour than they paid women. 

Prominent organisations in the UK that were found to have close to 0% gender gap are British Museum and the Armed Forces, the BBC reported. Other firms such as mattress retailer Sweet Dreams and nursery business Yellow Dot paid women more than men, 46.4 per cent and 35.4 per cent respectively. 

Not much better in India 

The latest Economic survey pointed out that in India, the gender gap in the Indian rural work force is about 50% even though women make up for a significant portion of the low-skilled informal labourers. 

The survey also said that political representation of women in India was only 9%. The pay gap in India is about 67%, according to a report by the World Economic Forum. In the WEF’s Gender Gap Index, India moved behind China and Bangladesh to the 108th position, slipping 21 places since 2016. Bangladesh ranked 47th on the list whereas China ranked 100th. 

The Wage Indicator Data Report said that when it came to participation of women in the economy, India was in the bottom 10 countries on the list. 

The report also says that, “The gender pay gap increases with age. Women in the age group below 30 years (18 to 30 years) earned 23.07% less than men, whereas women in the age group of above 30-40 years earned 30.24% less than men.” 

Trouble in Silicon Valley The situation in the United States is not so different. In the US, the average pay gap is 32% and a study says that US will have to wait for 217 more years for this pay gap to close. 

According to a study by the Pew Research Centre in the US, about four-in-ten women employed women said that they experienced gender discrimination at work. The eight criteria asked in the survey include earning less, not treated as competent, receiving less support from seniors and more. In a recent instance, Google and Oracle were sued by the same law firm for pay discrimination based on gender. 

The case against Oracle was filed during the last days of the Obama Administration, where the US Department of Labor said that the company pays women “less than comparable males in comparable roles.” In Google’s case, it was alleged that the company did not compensate fairly. The women working here said Google did them wrong “by systematically paying them lower compensation,” in their law suit. 

The government also performed a regression analysis which showed that the government showed that there were “systemic compensation disparities against women pretty much across the entire workforce.” Kelly Ellis, one of the plaintiffs, resigned in July 2014 “because of the sexist culture at Google.” Ellis says, “almost all backend software engineers were men. 

Almost all female software engineers, however, were frontend engineers.” Last month, the law suit representing a group of people working at Google was revised and brought back to a US court. The female employees represented are from a range of different roles, such as engineers, software managers, program managers, sales staff, and more. How do companies explain this? 

The most common explanation is that there are fewer women in highly skilled roles and in senior management, both of which pay more. A fashion retailer company, Phase Eight said that, “The figures result from the fact that, as a women’s fashion retailer, the staff in our stores are overwhelmingly female, whilst our corporate head office staff (whose pay rates are typically higher) are more evenly split between men and women.” 

The company said the discrepancy in its figures comes because their staff has a majority of female members, which are employed in jobs that don’t require a high-skill set. Oil giant Shell reported last week that there is a gender pay gap of 22% in the company. The company says that the gender pay gap exists because there are fewer women employed in senior leadership roles or higher paid technical positions. Shell said it was sure that it paid its staff equal pay, there was “still some way to go” before “closing the pay gap.” 

Why is there a dearth of women in highly skilled roles? According to the Monster Salary Index (MSI) on gender for 2016, women in India earn 25% less than men. A report by Accenture Research says that globally, a woman earns $100 for every $140 a man earns. Accenture highlighted why the gap persists, “Despite recent successes such as improvement in education, and more work opportunities, socio-cultural issues often force women to step back at important stages in their careers making the gap harder to close,” said Rekha Menon, Chairman and Sr Managing Director, Accenture in India. In September, Adobe India said it had achieved 99% gender parity in salaries. “We found, I won’t use the word ‘discrimination’, but more of an unconscious bias, about a woman’s availability and willingness to be deployed productively, as compared to men, which exists in a manager’s mind and influences decisions about wages. Indirectly, that contributes to the salary gap as well,” said Abdul Jaleel, vice-president, employee experience, Adobe Systems India. Adobe reported that it managed to remove a gender pay gap in its organisation. 

Equal Pay and the Gender Pay Gap There has been a lot of confusion and debate over the terms ‘equal pay’ and ‘gender pay gap.’ Both issues reflect the underlying problem of pay disparity, however, they are different issues. The British Equality and Human Rights Commission draws the distinction well: “Equal pay means that men and women in the same employment performing equal work must receive equal pay, as set out in the Equality Act 2010.” (The Equality Act is an anti-discrimination act passed by the Parliament in the UK.) 

“The gender pay gap is a measure of the difference between men’s and women’s average earnings across an organisation or the labour market.” What this means is that ensuring that women are paid equally as men for the same work, while important, would do little in reducing the gender pay gap. 

The pay gap will continue to persist as long as issues such as under-representation in higher paying roles exists. This along with other factors discussed above need to be dealt with if we want to ensure that women are well-represented and well-compensated in the workforce. Other Factors The U Curve of Female labour participation In a 1995 paper, Claudia Goldin, an award-winning economist explained that concept of “The U-Shaped Female Labor Force Function” phenomenon. 

The theory refers to the participation of married women in the labour force. It says that, “The labor force participation rate of married women first declines and then rises as countries develop.” In this Mint article, the author says that in India’s context, “This “U” curve, with women dropping out of the labour force once family incomes are no longer at distress levels, is associated with higher social status for families where the women attend only to domestic duties. The same patriarchal attitude sustains the expectation that women will bear the primary household and parenthood burden even when employed outside the house. 

This feeds into hiring discrimination in the formal sector when employers consequently see women as less reliable employees, prevents women from accumulating human capital at the same rate as men.” In India, as explained in a paper by NSSO, women with higher castes and higher income families spent less time working outside the house. 

The “social cost” of negotiation A survey published by the Harvard Business Review said that, “one study of graduating MBA students found that half of the men had negotiated their job offers as compared to only one eighth of the women.” Some researchers examined the answer saying that, women refrained from negotiating. It had less to do with confidence and more with whether “they are reading the situation right”. HBR says, “The researchers compared people’s willingness to work with that employee after evaluators saw him or her negotiate, or not. If evaluators were less inclined to work with the same employee after seeing him or negotiate, we deemed that the “social cost” of negotiation.”

In various studies it has come to light that women pay a higher cost for negotiating than men.