Pay inequality persists, and it matters
Pay inequality matters because it is a blatant injustice and because it condemns millions of women and their families to lives of entrenched poverty. It is a global, systemic problem that needs concerted attention and action.
Women in the USA earn on average 79 cents for every $1 that men earn and identify the gender pay gap as their primary workplace concern. It has obvious immediate repercussions but also directly relates to longer-term impacts such as credit-worthiness, savings, social security benefits and retirement income. Globally, some 200 million women in old age are living without any regular income from an old age or survivor’s pension, despite having been in the workforce in earlier life. In the European Union, elderly women are 37 per cent more likely to live in poverty than elderly men.
It is the women who earn least for whom the income discrepancy is most damaging. In the US, African American women earn only 60 cents, Native American women 59 cents and Latinas 55 cents for every $1 that white men earn. Where every dollar counts, pay inequality can be enough to plunge families below the breadline. Income well spent on education, nutrition and health potentially moves a generation out of poverty; insufficient income reinforces the poverty cycle.
In the United States today, married mothers are the primary or co-breadwinners in more than half of families and more than 15.2 million family households are headed by women. One in three of those families have incomes that fall below the poverty level. If the wage gap were eliminated, on average, a working woman in the United States would be able to afford the equivalent of 83 more weeks of food for her family.
Yet it is difficult for mothers to earn a decent wage, and the situation is compounded if other factors combine, for instance disability. The ‘motherhood penalty’ is larger for low-wage workers, and women in the USA occupy two-thirds of those positions, in childcare centres, or residential homes for older people, as domestic workers and cleaners. This work is critical to the functioning of our economies, but is hugely undervalued. In the USA, golf caddies (who are mostly men) earn an average of $17 an hour; while caregivers (mostly women) are paid just $9 an hour. We will not be able to close the gender pay gap, as long as there are so many women trapped in low paid, undervalued work and as long as working conditions are inflexible.
The male breadwinner model of society has long gone, yet its influence remains. Contemporary economies need a workforce that draws in both men and women, but workplaces are still designed as if workers have no domestic responsibilities. There is need to sensitively accommodate the caring role, provide the flexibility in working hours that real life demands, and apply a similarly realistic appreciation of women’s engagement. Ample research exists to demonstrate the scale of that value; conversely, the recognition and significance of men’s caring role and responsibility is under appreciated and under served in policy and practice.
In all countries, women work fewer hours than men in paid employment, while performing the vast majority of unpaid care and domestic work. On average, women carry out at least two and a half times more of this work than men. Although wealthier women can pay poorer women to provide care for their families, it can result in a complicated cascade of care, with each level sub-contracting family care to another in order to release time for paid work. At the bottom of the chain, in societies where there is no state support for care services, women must either take on poor quality, part time or informal work that can combine with childcare, or entrust that care to family members or older siblings, sometimes leading to school dropout.
Failure to support the care economy reinforces the gender pay gap in two ways: by undervaluing women’s jobs and entrenching women in low paid work; and by limiting women’s paid work opportunities, through a lack of affordable care services.
Last month UN Women issued a call to action on closing the gender pay gap, working with key stakeholders to develop an international coalition that will bring urgent progress on equal pay. In addition, addressing the care economy and reducing gender pay gaps are two of six interlinked target issues for the newly formed UN Secretary-General’s High Level Panel on Women’s Economic Empowerment. This panel includes thought leaders from a spectrum of influence, from the IMF and World Bank to trade unions and civil society, who are confronting the largest obstacles to economic empowerment facing low-income, disadvantaged and marginalized women.
One promising solution is government investment in care services. A recent study by the ITUC and the Women’s Budget Group in the UK found that investing in a universal, free childcare system, in which workers are paid a decent wage, would create 1.65 million jobs and reduce the gender pay gap by 3.4 percentage points. Children would get the best start in life, women could stay in the labour market and build their careers, and best of all, most of the investment would be recouped through increased tax revenues and lower welfare spending.
Recently, the Governors of New York and California each signed bills that will raise the minimum wage to $15 an hour, which will disproportionately benefit low paid women. The USA is currently the only OECD country that does not offer paid maternity or parental leave at federal level, however, there is also some progress on this critical issue, with New York pledging to grant 12-weeks of partially-paid leave to private sector workers by 2021, and San Francisco becoming the first US city to require companies of a certain size provide fully-paid parental leave from 2017.
There are no simple solutions, and economic empowerment for women is just one aspect of full gender equality. However, when it comes to tackling the gender pay gap and reducing unpaid care work for women and girls, we urgently need to be finding and implementing effective solutions.
Phumzile Mlambo-Ngcuka is Executive Director of UN Women