What is the Gender Pay Gap?

The gender pay gap is the difference between what men and women are typically paid. Research shows that across demographics and workplaces women are consistently paid less than men in the United States and around the world.
The causes of the gender pay gap are complex since gender norms affect how we choose and value work. Men, for example, are less likely to take time out of the workforce to care for family members, while women in the workforce statistically spend more time on unpaid housework, caregiving, and parental leave than men do. Multiple studies have found that even after accounting for factors such as occupation, industry, hours worked, and education, a substantial pay gap remains. This unexplained gap suggests that gender bias is a factor in unequal pay. Further, racial prejudices and discrimination compound the effects of gender bias; some of the highest-paying fields tend to exclude women of color.


Globally, women only make 77 cents for every dollar men earn. It is a significant cause of lifetime income inequality. According to research,  at current rates, it will take 70 years to close this gap. Labor policies are a critical factor when it comes to this gap. For instance, women face greater constraints in balancing paid work and family responsibilities. Restrictive policies, such as inflexible working hours and limited parental leave, can impede women’s mobility in the workforce and force them into part-time employment. In turn, this exposes them to further inequalities, such as limited access to social protection, in particular, old-age benefits. Women with children are more vulnerable to these inequalities — also known as the motherhood penalty. In sub-Saharan Africa and South Asia, the gender pay gap is 31 percent and 35 percent, respectively, for women with children, compared to 4 percent and 14 percent for women without children. (Source)

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The Status of Gender Equal Pay Gap in the U.S.A

On June 10, 1963,  President Kennedy signed the Equal Pay Act into law. More than half a century later, the pay inequality persists overwhelming in American society. Closing the gender pay gap in the USA is expected to lead to greater economic security and significantly lower poverty rates for women and their families. With 42 percent of U.S. mothers as primary breadwinners, closing the gap would mean supporting more contributors to a healthy national economy.
Therefore, ‘Equal Pay Day,’ was selected as the day to raise awareness on the perpetual existence of the pay disparity. 
In 2018, the equal payday was celebrated on April 10, 2018. Conceptually, the date symbolizes how far into the year the women must work to earn what men earned in the previous year. It means that women would have to work until April 10 to make what men earned by December 2017. Due to the limited availability of the statistics, it is challenging to preselect an exact day. Regardless, the pay gap in the USA stands at .80 or 80%, i.e., women on average make 80% of what men earn in a year. (Source)

The Global Status of Gender Equal Pay Gap.

In the battle for the parity of the sexes, some countries have made progress in reducing inequality—such as in access to health care, education, and financial services—but worldwide, men still have more economic opportunities than women.

Countries can fix the problem with the right policies that reduce the gender wage gap and level the playing field.

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According to the World Economic Forum, (latest paper) after the G7 Ministers and Central Bank Governors meeting, highlights these wage gaps. It measures the differences between men and women’s pay and considers hours worked, type of employment, education levels, age, and experience. The chart shows that developing and advanced countries alike are in the same predicament.

The chart shows that the wage gap is most pronounced in South Korea, which has a 37 percentage point difference in wages between men and women. The United States and Canada hover at around an 18 percentage point disparity, while Luxembourg comes in at the lower end of the scale, with a 3 percent point wage gap. The G7, which has emphasized and is committed to the need for closing the gender gap, has a wage gap average of about a 16 percentage points.

Gender inequality is directly linked to income inequality, which in turn can weaken the sustainability of growth in a country. Women getting paid less than men directly contribute to income inequality, and higher gaps in labor force participation rates between men and women result in inequality of earnings, unequal pensions and savings. Closing the gender wage gap can lead to greater equality in the overall income distribution.

The right policies can reduce the gender wage gap. Overall, to reduce gender inequality and wage gaps, countries should focus on policies that improve education, health, infrastructure, increasing financial inclusion, and promoting equal rights.

In advanced economies and some developing countries, some of the policies that may help reduce wage gaps include: Offering publicly financed parental leave schemes. Long absences from the workforce to take care of children could lead to lower earnings upon return to work, as well as a reduced skill set. Removing the tax burden for secondary earners (mostly female). Replace family taxation with individual taxation. Use tax credits or benefits for low wage earners. These tax credits would reduce the net tax liability and increase the net income gain from accepting a job.

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Equal pay for equal work among women and men is a global goal.

Source: unwomen-usnc.org/advocacy-2

Source: weforum.org

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