Gender inequality has many manifestations around the world, especially in working relationships. The gender pay gap is one particular aspect that causes the most objection from communities in different countries. For example, US citizens view unequal pay as central to gender equality (Hughes, 2021). In the most developed Western countries, the difference in pay for men and women for performing an equal amount of work of a similar level of complexity is about 14% (“Gender pay gap,” 2021). It is noteworthy that such indicators can be considered a victory for fighters for equal rights since back in the 1970s in the US, women earned up to 60% of similar positions (Omoth, 2021). Fortunately, the legislation of countries with developed and developing economies has undergone many changes aimed at changing the situation. This paper aims to discuss why the gender pay gap is an important issue that needs to be addressed by the HRM globally.
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The gender pay gap is a hot topic that is often raised in the media. Scientists are also studying this phenomenon extensively to determine the causes and nature of the problem. Conducting research does not solve the problem, and the answers lie instead on the political and legislative planes. Nevertheless, the attention to the issue indicates recognizing the importance of the problem for the general population. The gender pay gap not only belittles women and creates a problem for their survival in the face of fierce economic competition. It also exacerbates the issues women face in personal relationships.
Equally important, gender inequality in career perspectives at the workplace draws attention to the need to rethink traditional gender roles in family responsibilities, such as housekeeping and raising the children. Women are more likely to be employed in less protected jobs became apparent with the onset of the COVID-19 pandemic, when 40% more women were laid off, given that they worked in retail, restaurants, and other services (Hughes, 2021). Scientists emphasize that, unlike in permanent employment, seasonal or temporary work does not receive the attention it deserves. Litman et al. (2020) analyzed the pay of mechanics in Turkey and found that the hourly wage of women was 10.5% lower than that of men. The scholars discovered that the gender gap was driven by the tendency for women to choose work tasks with lower hourly wages. Therefore, scientists pay attention to concomitant factors such as self-esteem and expectations.
The perception of fairness or justification of gender pay inequality is a separate research question. Auspurg et al. (2017) found that in Western societies, specifically in Germany, “both men and women consider it fair to have slightly lower earnings for female employees compared to otherwise similar male employees” (p. 179). This perception gap has been explained in terms of referent theory and reward expectation theory.
Women’s responsibilities related to childbearing are one of the significant causes of inequality in career opportunities. Dias et al. (2021) examined the relationship of the gender pay gap in the UK with fertility over the past 30 years. In particular, scientists focused on differences in career models for men and women and how they are affected by the first baby birth. The study results showed that the pay gap for college graduates 20 years after the first birth was due primarily to differences in full-time experience associated with the need to devote time to raising children. The pay gap was three times smaller than the overall long-term gap for participants without a college degree.
The gender pay gap has been around for over a century, ever since the industrial revolution began. Fortunately, this gap is steadily closing, mainly due to the introduction of stricter legislative policies. Government and international organizations are closely monitoring pay statistics and companies’ compliance with gender laws. From 2018 to 2020, the gender pay gap issue in the UK was significantly exacerbated by the suspension and postponement of enforcement measures. The statistics remained the same – 12.8%, but the number of employers who report their salary data decreased from 10,833 companies in 2018 to 6,150 organizations in 2019 and 2,440 in 2020 (“Gender pay gap,” 2021). Charles Cotton, senior remuneration and performance advisor at the CIPD, confirmed that the sharp decline in employers is likely to be due to the suspension of enforcement measures, suggesting a need to create a tool that would regulate the fair recruitment, management, development, and rewarding of employees.
Interestingly, the pandemic affects women disproportionately financially. The UK dropped from 15th to 21st place globally in terms of gender-equal payment, while other developed countries improved their statistics according to the World Economic Forum’s report for 2020 (Hughes, 2021). Women were 96% more likely than men to be laid off due to COVID-19 in 2020 (Hughes, 2021). Therefore, gender pay inequality has been linked to the intensification of the pandemic.
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According to a study by the Pew Research Center, most Americans are concerned about the lack of equal pay and see it as a critical element of gender inequality in work relationships. In particular, 45% of proponents of equal rights for men and women consider equal pay to be the primary indicator of gender equality (Barroso & Brown, 2021). This element garnered more votes than the representation of women in leadership positions or the absence of gender discrimination. The researchers also noted that in the analysis of hourly work in 2020, US women earned 84% of men’s earnings and 82% in regular jobs. Notably, to close the 16% gap, women will need to work an additional 42 days a year.
Lower wages are an important reason women refuse to work or reduce the number of hours they work during motherhood. According to research from the London School of Economics, women’s propensity to take responsibility for household chores and childcare results in women taking 78% more of this unpaid work than men. Moreover, mothers working from home spent 47% of their time caring for their children, while fathers spent 30% (Hughes, 2021). Even more importantly, 33% of women lost their jobs to cope with the responsibilities of motherhood (Hughes, 2021). As a rule, women refuse to work, as their labor is paid lower than men’s. Other reasons for the gender pay gap may include problems related to expectations and perceptions, women’s employment in less stable sectors, and problems in career development.
Gender Pay Gap in Big Business
Big businesses are usually the ones that are least tolerated in terms of gender equality. For instance, in Aon, the gender gap has been 29% for three years in a row; in PwC LLP, this indicator is 32%, and 60% for bonuses, although, for PwC Services, it is 7% and 28% for bonuses (Gross, 2021). Other companies with brutal gender pay gaps are Bain with 25% and 60% in bonuses, BCG with 33% and 52% in bonuses, McKinsey with 16% and 51% in bonuses, KPMG UK Ltd with 18% and 34% in bonuses, and IB
There are also some positive trends since some companies supported the latest trends to achieve gender equality. According to the Statista survey of over 100,000 employees from 15,000 companies, businesses’ efforts to promote inclusiveness include gender balance and transparency in race, ethnicity, age, disability, and sexual orientation (Kelly, 2020). The three companies surveyed making the most efforts to achieve equality are Biocoop, a French organic food retailer, German chipmaker Infineon, and Dutch travel company Booking.com.
History of Gender Inequality in the US
The world history of the fight against gender inequality is primarily associated with the initiative of the United States, which has been taking gradual but timid steps to eliminate the problem for 150 years. A public complaint about the difference in wages was first recorded in a letter to the New York Times editor in 1869. The article noted that recognizing the principle of equality and its application are different things, and recognition alone is not acceptable. At the time, women working in the US Treasury were paid $ 900 a year, the same job for which men were paid $ 1,800 (Omoth, 2021). During the Second World War, in 1942, Franklin D. Roosevelt created the National War Office of Labor to oversee the preservation of supply chains (Omoth, 2021). The President called on employers to pay wages to work women voluntarily on an equal basis with men, but no one responded.
Employers’ reluctance to pay women fair had the same reasons in 1869 as in 2021. In 1945, the US Congress attempted to pass the Equal Pay for Women Act but was unsuccessful (Omoth, 2021). In 1963, Congress passed the Equal Pay Act, which included amendments to the Fair Labor Standards Act 1938 (Omoth, 2021). However, this law made employees responsible for reporting or taking legal action in unfair pay cases without directly obliging employers. In 1970, the Schultz v Wheaton Glass Co. case led to the fixation of the claim that companies could not justify men’s higher wages by creating meaningless titles to form distinctions. In 1996, the National Committee for Equal Payday invented Equal Payday yearly national ‘holiday,’ which represents the extra time a woman must work to equalize rates.
Equal pay laws have not been revised since the 1970s. In 2009, Barack Obama signed the Lilly Ledbetter Fair Pay Act into law, which gives each employee 180 days from the last wage violation to file a complaint (Omoth, 2021). Finally, in 2019, Kamala Harris drafted a law requiring companies to pay a fine of 1% of profits for every 1% of the gender pay gap (Omoth, 2021). Hopefully, this law will receive enough votes to be implemented since it looks like only strict solutions can solve the problem.
The gender pay gap, unfortunately, is not limited to women and men – it is a problem of women versus white men. While there is a gender pay gap in every category, the goal is for everyone to reach the level set by the wages of white men. In the 21st century, the public began to pay more attention to racial and ethnic inequality within the framework of gender pay inequality. In 2021, black women earn 65.3%, Hispanic women 61.6%, white women 81.5%, and Asian women 93.5% of white men’s earnings (Omoth, 2021). Providing parental leave to fathers is another area of focus in combating discrimination and inequality.
Civilian resistance has the potential to change the status quo, and campaigns such as the #MeeToo movement can have significant repercussions. Luo and Zhang (2020) conducted research to discover how the movement has changed the equality surface of companies associated with the Weinstein Production. Interestingly, after the movement gained popularity and was acknowledged by the wider society, things started to change. The scholars found that after the Weinstein-associated producers hired 40% more female writers than earlier, which was a fundamental change since the number of participants in writing teams did not change.
Female producers contributed more to these innovations, as they felt more willing to support the movement and less worried about the reactions of their male counterparts. At the same time, many male producers who previously worked with Weinstein hired significantly more female writers after the #MeToo campaign (Luo and Zhang, 2020). Moreover, the proportion of female writers working solely in drama and romance categories decreased significantly in this group of producers.
This reaction can be considered a big move forward since the man-occupied genres like action and sci-fi films usually have way larger budgets. Even more exciting, the scholars analyzed the storylines for movies and series that featured female protagonists and discovered that plots written in Weinstein-associated companies started to defy traditional gender stereotypes. Therefore, these producers supported the women-empowering projects and broke the conventional barriers of representation.
Thus, the gender pay gap was discussed as an issue that needs to be addressed by the HRM globally. Apparently, not only women who lose in the gender pay gap situation. Businesses with fewer women in management tend to be less open-minded and often lose points to competitors with better diversity and equal performance. CEO women tend to understand the 50% of women-population better, and be more compassionate and thoughtful. Lawmakers should support the resistance since, for now, the legislation system is not straightforward about the consequences of avoiding equality.
However, stricter laws will restore justice and revitalize the economy, as women are likely to spend more with more money, while wages for men are likely to stay the same. At the same time, men employees will benefit from equality, as higher salaries are likely to affect the efficiency and productivity of women, which will ensure more successful teams in the workplace. Finally, the general population will benefit from equality because mothers will gain more weight in family relationships, relieving the pressure on children who will live in more psychologically balanced families.
Auspurg, K., Hinz, T. and Sauer, C. (2017) ‘Why should women get less? Evidence on the gender pay gap from multifactorial survey experiments,’ American Sociological Review, 82(1), pp. 179-210. doi.org/10.1177/0003122416683393
Barroso, A. and Brown, A. (2021) Gender pay gap in the US held steady in 2020.
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Costa Dias, M., Joyce, R. and Parodi, F. (2020) ‘The gender pay gap in the UK: children and experience in work,’ Oxford Review of Economic Policy, 36(4), pp. 855-881. doi.org/10.1093/oxrep/graa053
Gross, A. (2021) ‘Harassment, pay and glass ceiling highlight consultancy gender gap,’ Financial Times.
Hughes, S. (2021) ‘Gender inequality: Are women bearing the burden of the economic fallout?’ Muve.
Kelly, M. (2020) ‘Europe’s most inclusive companies – as ranked by employees,’ Financial Times.
Litman, L., Robinson, J., Rosen, Z., Rosenzweig, C., Waxman, J. and Bates, L.M. (2020) ‘The persistence of pay inequality: The gender pay gap in an anonymous online labor market,’ PloS One, 15(2), p.e0229383. doi: 10.1371/journal.pone.0229383
Luo, H. and Zhang, L. (2021) ‘Measuring the impact of #MeToo on gender equity in Hollywood,’ HBR.
Omoth, T. (2021) ‘The long, sad history of gender pay inequality,’ Work+Money.