Explained | Tackling the gender pay gap

• Gender pay gaps represent one of today’s greatest social injustices. 

• Across all regions, women are paid less than men, with the gender pay gap estimated at around 20 per cent globally. 

• Many factors can lie behind gender pay gaps, including differences in educational attainment, occupational segregation, or discrimination in pay and in access to particular types of jobs. Motherhood also brings about a wage penalty that can persist across a women’s working life.

• Progress on narrowing that gap has been slow. While equal pay for men and women has been widely endorsed, applying it in practice has been difficult.

Why does the gender pay gap persist?

• Ingrained inequalities cause the gender pay gap. Discrimination, both overt and subtle, plays a critical role in the gender pay gap.

• Women have historically been clustered into lower-paying fields, such as care-giving, education, and service industries, while men have dominated higher-paying sectors like technology and finance.

• Women, especially migrant women, are overrepresented in the informal sector, leading to low-paying, unsafe working conditions without social benefits. 

• Women also perform three more hours of daily care work than men, including household tasks and caring for children and the elderly. 

• The motherhood penalty exacerbates pay inequity, with working mothers facing lower wages. 

• Gender stereotypes, discriminatory hiring practices, and promotion decisions also contribute to pay inequalities.

• Women earn 77 cents for every dollar men earn for work of equal value — with an even wider wage gap for women with children.

• It is estimated that only 28 per cent of women employed worldwide get to enjoy paid maternity leave.

• While individual characteristics such as education, working time, occupational segregation, skills, or experience explain part of the gender pay gap, a large part is due to discrimination based on one’s gender or sex. 

Outcomes of gender pay gap

• The existence and persistence of the gender pay gap may have unfavourable outcomes at both the individual and societal levels. 

• For example, the gap is more frequently connected with higher levels of poverty among women. Women’s pay being lower than men’s during their working years translates into their income from social security and pensions after retirement, and from other social benefits such as life insurance, also being lower. 

• Moreover, the adverse effects of shorter working hours and low-paid jobs, typically associated more with women than with men, are reflected in lower pension levels, lower seniority premiums and lower levels of other coverage related to employment contributory schemes.

• Overall, women’s lower earnings can lead to a reduction in bargaining power and in independence, and lifetime income inequality between genders, which helps maintain the lower status of women in society and ultimately contributing to lower rates of gross domestic product (GDP) and GDP growth.

• As a result of low economic power within the household, some women may have to deal with abusive and unhealthy relationships, and domestic violence. 

• Women’s families are likely to benefit when the share of household income that women control increases, for instance, women tend to invest more in their children’s nutrition, health, education and housing with increased income.

What needs to be done?

• Closing the gender pay gap and addressing other labour-market inequalities is important for improving women’s socioeconomic position and achieving social justice for more than half of the world’s population. 

• Allowing women to use their skills and talents optimally will also benefit the economy, reducing poverty and inequality, promoting innovation and entrepreneurship, and supporting economic growth.

• At the global level, the Sustainable Development Goals (SDGs) aim to achieve gender equality within SDG 5, which stipulates: “Achieve gender equality and empower all women and girls”. SDG 5 considers inequality more broadly than simply in terms of the gender pay gap: its ambition is to achieve gender equality in the labour-market (e.g. equal access to jobs and top decision-making roles); in education (e.g. achieving gender parity in education); in access to health; and in an array of other target areas, with the aims of reducing gender-based violence and discrimination, and empowering women and girls. 

• The goal of equality in earnings is the specific subject of SDG 8, “Decent Work and Economic Growth”, with Indicator 8.5.1 relating specifically to the average hourly earnings of women and men employees, by occupation and age, and for persons with disabilities.

• An increasing number of countries – both industrialised and developing – are passing laws mandating the equal treatment of women in the labour-market, with the objective of reducing gender economic inequalities. 

• Labour and anti-discrimination laws, and laws and policies governing parental leave and childcare availability, are on the agenda in various countries worldwide.

• This includes measures such as transparency in the recruitment process, for example by disallowing the collection of personal information (e.g. marital status) while hiring, prohibiting pay discrimination based on gender and promoting pay equity by making pay scales publicly available in the public and private sectors. 

• Employers could also promote transparency in pay structures within organisations, ensuring that salary ranges, pay scales and benefits are clearly defined and communicated. 

• Accessible and responsive complaint mechanisms could also be put in place, so that violations of the law or company policies and any discrimination can be reported.

• Social protection policies, such as minimum wage legislation and social security benefits, can be effective if they consider the specific needs and vulnerabilities faced by women in the labour-market. 

• Sectoral and occupational segregation is a large contributor to the gender pay gap and can be challenging to tackle directly. An economy-wide approach needs to be taken to encourage the breaking down of gender segregation by promoting women’s participation in nontraditional fields and sectors, where they are underrepresented. 

• This can be done through targeted recruitment, training programmes, addressing discriminatory practices and making workplaces safer for women in traditionally “masculine” sectors. 

• Governments and employers can also support the re-integration of women into the labour force after periods of absence, for example after maternity leave. Re-integration policies may include training programmes, upskilling opportunities and support for continuing education, enabling women to update their skills and stay competitive in the job market. This would reduce occupational segregation, wherein women are under-represented in high paying and competitive jobs, and minimise the negative impact of career breaks.

• Better data on the pay distribution, collected at frequent intervals, would enable a better understanding of the gender pay gap in the region and inform work to advocate for policies to address it.

Scenario in India

• Women form an integral part of the Indian workforce. As per Census 2011, the total number of female workers in India is 14.98 crore and female workers in rural and urban areas are 12.18 and 2.8 crore respectively. 

• Out of total 14.98 crore female workers, 3.59 crore females are working as cultivators and another 6.15 crore are agricultural labourers. Of the remaining female workers, 8.5 million are in household Industry and 4.37 crore are classified as other workers.

• As per Census 2011, the work participation rate for women is 25.51 percent as compared to 25.63 per cent in 2001.

• As per the labour force survey data of the National Sample Survey Office (NSSO), Indian women earned, on average, 48 per cent less than their male counterparts in 1993-94. Since then, the gap has declined to 28 per cent in 2018-19.

• The government has enacted Equal Remuneration Act, 1976 which provides for payment of equal remuneration to men and women workers for the same work or work of similar nature without any discrimination and also prevent discrimination against women while making recruitment for the same work or work of similar nature, or in any condition of service subsequent to recruitment such as promotion, training or transfer. The provisions of the Act have been extended to all categories of employment.

• The Act is implemented at two levels — central level and state level. The Act is enforced by the central and state governments by conducting regular inspections to detect the violation of provisions of the Act by establishments. The office of Chief Labour Commissioner (Central) in the central sphere and state government in the state sphere are the appropriate authorities to conduct inspections to ensure implementation of the provisions of the Act.

• Under the provisions of the Minimum Wages Act, 1948, men, women and transgender employees shall get the same rates of wages for the same work or work of similar nature. The Act does not discriminate on the basis of gender. 

• Maternity Benefit Act, 1961, as amended vide the Maternity Benefit (Amendment) Act, 2017, inter-alia, provides for paid maternity leave to women workers. Creche facility in respect of establishments having 50 or more employees is also provided. 

• The government has increased paid maternity leave from 12 weeks to 26 weeks of which not more than eight weeks shall precede the date of expected delivery. 

• Depending upon the nature of work assigned to a woman, the Act provides for work from home for such period and on such conditions as the employer and the woman may mutually agree.

• The Parliament passed the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in August 2005. It came into force on February 2, 2006.  Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is a demand driven wage employment programme, which provides for livelihood security by providing at least 100 days of guaranteed wage employment in every financial year to every rural household whose adult members volunteer to do unskilled manual work.

• Several other studies have found that, with the expansion of the scheme, the rate of compliance with minimum wage regulations increased, the gap in rural wages between formal salaried workers and casual workers decreased and, similarly, the gender wage gaps in rural areas declined.