What is causing the worldwide gender pay gap increase?

James Young
What is causing the worldwide gender pay gap increase?

According to last year’s Global Gender Gap Report published by the World Economic Forum, female workers may have to wait 217 years to achieve gender parity at work. This is 47 years longer than last year’s estimate of 170 years. In 2015, WEF’s researchers came up with the relatively optimistic figure of 118 years until parity is achieved: almost a century sooner than 2017’s prediction. Why does our progress towards equality seem to be going backwards?

The World Economic Forum Report

To understand these predictions, we need look at how the World Economic Forum reaches its figures. The WEF introduced the Global Gender Gap Index in 2006. Each year, it benchmarks 144 countries for gender parity across four areas: economic participation, education, health and political empowerment.

When researching employment, the WEF measures three areas: the participation gap, the remuneration gap and the advancement gap. These are reached by looking at male to female ratios in the workforce and remuneration, and the proportion of men and women in senior roles. From these, it can predict how long it will take for the pay gap to close if growth (or lack of) continues at the current rate.

Given the recent political climate, it’s perhaps unsurprising that progress towards equality has taken a beating. The report offers a country-by-country breakdown which gives some interesting insights. The UK, for reference, ranked 15th out of the 144 counties.

Here are a few key takeaways from last year’s report.

Rwanda

Let’s start off on a positive note. Fourth-placed Rwanda showed “improved parity in estimated earned income and, particularly, a significant narrowing of its gender gap in the number of women in ministerial positions”. There’s been a conscious effort to promote female empowerment in Rwanda over the last few years, supported by the government. In the capital Kigali, women now represent 42% of all entrepreneurial activities.

Sweden 

Sweden ranked just below Rwanda in fifth place. It keeps its traditionally strong position on this index, due largely to its progress on wage equality. Discrimination law was enhanced in 2017 year and the country actively monitors its gender gap. Sweden is also home to the world’s first female archbishop: Antje Jackelén. However, women’s pay remains at 87% of men’s.

New Zealand

Ranked ninth, New Zealand has focussed on increasing its number of women in parliamentary positions. In October 2017 Jacinda Arden was elected Prime Minister: not the country’s first female PM, but a welcome step forward nonetheless. When asked by Forbes about how she plans to empower women in the workplace, she gave a characteristically practical answer:

“Too many women are in low wage work… So, lift the minimum wage, move on pay equity, reduce the gender pay gap, increase paid parental leave and encourage flexible work.”

Japan

Although it’s ranked 114 overall, Japan has seen an increase in women in senior roles and has made progress in closing the pay gap. It’s now 30 years since equality legislation was introduced and Japan’s female participation is steadily increasing. From 2016, large companies will have to monitor the ratio of male to female employees.

Ecuador

Ecuador ranks higher than neighbouring Peru in 42nd place; however the country’s employment gender gap has widened due to a drop in wage equality and women in parliament. Hilda Rosalia Allaica Guamán, the head of the Board of Irrigation, writes:

„…Most women have to fight a daily battle to prove that they have the same skills as men to hold public office or leadership positions in their communities.“

USA

America slipped four places since 2016 to number 49. There’s been progress in terms of the equal pay gap closing. However, there is a significant decrease in women in ministerial level positions – the lowest in a decade.

Pakistan

Ranked at 143, there’s been progress with women in the labour force, but the income disparity is not good. 75% of working women in Pakistan have no formal education. Childcare, lack of role models, and cultural perceptions also hold women back in the workplace.

Worldwide progress towards equality

As you can see, globally it’s a mixed bag. We’re looking at many different cultures and levels of development. In some areas, workplace parity could happen relatively soon, possibly even within a century. In other countries, progress is almost negligible.

A key area highlighted by last year’s report is the occupational gap: those industries that have a traditional gender bias. Addressing this could have a major impact on that 217-year lag.

WEF founder Klaus Schwab hopes that:

“…The report will serve as a call to action to governments to accelerate gender equality through bolder policy-making, to businesses to prioritize gender equality as a critical economic and moral imperative and to all of us to become deeply conscious of the choices we make every day that impact gender equality globally.”

It’s up to all of us, as managers and HR professionals, to look at our own recruitment and any underlying biases. If we bring gender parity forward, even by just one minute, we’ve made a difference.

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