Technological innovation, accumulation of capital, and productivity are three of the most important factors that determine a country’s long-term economic growth. What underpins all of these, though, is the contribution made by people in the collective form of the labour force.
But what if half of this workforce were not being utilised to their full potential? Or, worse still, they were not being rewarded fairly for an equal contribution?
In reality, this is the situation the world’s economy currently finds itself in. At present, women, who make up approximately half of the global workforce, only earn 77% of the amount that is paid to men and enjoy fewer job benefits.
Here, we take a look at some of the causes behind this gender-based inequality and consider how long it will be before the gender pay gap might close.
Fresh out of university is surely the time when men and women should be paid the same. After all, this is the phase in life when men and women are most likely to compete for the same jobs with just as much work experience and similar grades to one another.
As it turns out, even in their first year of work after higher education, female graduates with similar qualifications and experience earn less than men. In fact, a report recently published by Futuretrack has revealed that male graduates in the UK earn an average of £24,000 to £26,999, while female graduates earn between £21,000 and £23,999.
On this evidence, it is clear that the gender pay gap starts early. And, unfortunately, it’s a pattern that typically continues, even as both sexes continue to climb up the career ladder.
More men are in top jobs
In an article published by The Guardian, it was revealed that only one in 10 executive directors at the UK’s top companies are female. What’s more, in countries such as France and Germany, the ratio of females in boardroom-level jobs is even worse.
This statistic suggests that finding a way to get more women into better paid jobs would be an obvious way of closing the gender pay gap. Nevertheless, there is strong evidence to suggest, that even when women are in jobs that traditionally pay well, they still earn less than men.
Taking the high paid position of a doctor as an example, there are now more women GPs than men in the UK. In the medical profession as a whole, the split of female to male practitioners is nearly 50-50. Even so, female doctors still earn around 29% less than men, and the gap has only widened since 2004.
More women balance their career with children
A recent report by the International Labour Organisation revealed that women face a ‘motherhood pay gap’. In other words, this means that women are much more likely to take time off work or quit their job to look after their children and will earn less than men as a result.
Furthermore, statistics suggest that mothers earn a lot less than women that don’t have children, and the difference increases with every child a woman has.
In 2015, the UK Government made fundamental changes to paternity leave that gave fathers more flexibility to take time off work after the birth of a child. All the same, in many cases, women are still more likely to clear their work schedule to look after children, which will arguably help prolong the gender pay gap that currently exists.
Women earn less because of discrimination
In the UK, the Equal Pay Act was passed in 1970. This made it illegal for companies to pay men more than women for doing the same job. Over four-and-a-half decades later, a report by the recruitment company Robert Half has revealed that UK women earn, on average, £300,000 less than men over the course of a working life.
Historically, one of the main issues with legally enforcing equal pay is that women have carried the responsibility of filing a complaint if they suspected a man in the same role was being paid more. This, of course, means that women need to prove they are being discriminated against, which, in many cases, has proven difficult.
In a recent bid to counteract this, the government announced new rules that would force companies with more than 250 employees to reveal their gender pay data. Those companies that fail to address the gap will subsequently have their data published in a league table.
Although this is an obvious step in the right direction, the rules are expected to affect only 8,000 employers across the UK, which, hypothetically, means it will only start to scratch the surface of unmasking gender pay discrimination in the UK.
So, when will the gender pay gap close?
The gender pay gap starts from the first day of work and continues all the way to retirement. Between males dominating top jobs, women balancing careers with children, and discrimination, it is clear a lot has to change before the gender pay gap even nears closing.
Because of these factors, if the pay gap continues to close at its current rate, the World Economic Forum has calculated that it will take another 118 years before men and women are paid the same. Or, to put it another way, the best guess for when the gender pay gap will close is 2133.
Have you got an opinion on anything you have read, or on the gender pay gap in general? Then join the conversation in the comments section below.
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