What do you understand by Gender Pay Parity? What are the causes and how these differences can be minimised?
Despite the existence of the Equal Remuneration Act of 1976, neither the law nor the courts have been able to preserve a fundamental human right of gender equality that is guaranteed by the Constitution.
India wants more women to participate in its public and economic life, but it is unable to shield them from unfair wages and discriminatory employment possibilities.
In this light, let us discuss gender pay parity in detail.
What is Gender Pay Parity?
The Gender Pay Parity or Gender Wage Gap is defined as the average difference between the remuneration for working men and women. Recently it was in the news because the Board of Control for Cricket in India (BCCI) announced to provide equal pay to men and women cricketers in international cricket which is a historic move.
As per International Labour Organization (ILO), women on average continue to be paid about 20 per cent less than men across the world. In some countries, the difference is as high as 45 per cent. As a result, there’s a lifetime of income inequality between men and women and more women are retiring into poverty.
According to a report on time use, published by National Sample Survey (NSS) in 2019, women spend 299 minutes a day on unpaid domestic services for which men spend only 97 minutes. Only 22% of women aged 15-59 years were engaged in paid work in comparison to nearly 71% of men. Consequently, women’s productivity is grossly under-represented in India’s GDP.
Despite the fact that actual labour may involve a comparable amount of effort and skill, it is less regarded and compensated. The disparity widens among mothers, immigrant women, and women of colour. The so-called “motherhood penalty,” which forces women into the informal sector, casual employment, and part-time employment, is more prevalent in developing countries than it is in developed countries.
The Gender Pay Gap is Not the Same as Equal Pay
Equal pay is when men and women are paid equally for performing the same role or different work of equal or comparable value.
Since 1969, this has been a legal requirement in Australia.
Gender pay gaps are not a comparison of like roles. Instead, they show the difference between the average pay of women and men across organisations, industries and the workforce as a whole.
Read: Income inequality
Why and Where the Country is Lacking?
India ranks lowest in Health and Survival, and Economic Participation and Opportunity. Recently, the World Economic Forum (WEF) ranked India at 135 out of 146 countries in its Global Gender Gap (GGG) Index for 2022.
India has consistently scored poorly and ranked poorly in several categories. According to the report, the rank in the former has been low, owing to the low sex ratio at birth.
According to the most recent National Family Health Survey (NFHS), the sex ratio at birth was 929 females to 1,000 males for children born in the last five years. However, the natural sex ratio at birth, according to the World Health Organization (WHO), is approximately 952 females to every 1,000 males.
If we talk about Economic Participation and Opportunity, according to the Periodic Labour Force Survey’s 2020-21 annual report, the labour force participation rate among Indian women is just 23.15 per cent, in contrast to 57.75 per cent in men.
According to NFHS 2019-21, just 25.2% of the surveyed women had jobs at the time, compared to 74.8% of the surveyed men.
According to the Gender Gap Report, “the most unequal economies with less than 65% of wealth equity are Nigeria, Argentina, Mexico, Turkey, and India.” This indicates that on average, women in these nations only assemble less than 65% of the wealth that men do by the time they retire. India received a score of between 60% and 64%.
Also read: Global Gender Gap Report
What Causes the Gender Pay Parity?
The gap between women’s and men’s average earnings is the result of social and economic factors that combine to reduce women’s earning capacity over their lifetime.
These factors include:
- Conscious and unconscious discrimination and bias in hiring and pay decisions
- Under-representation in leadership
- Women and men working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages
- Women more than men are more likely to take career breaks from their employment in order to raise children. That makes them likely to have fallen behind in advancement and in remuneration.
- Lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles
- High rates of part-time work for women
- Women’s greater time out of the workforce for caring responsibilities impacts career progression and opportunities
- It can be challenging for them to obtain and maintain a job in science, technology, engineering and mathematics (STEM) disciplines because they are traditionally male-dominated.
How Can We Reduce Gender Pay Parity?
To remove the obstacles preventing women from participating fully and equally in the workforce, a cultural shift is necessary to close the gender wage gap.
Some of the ways to reduce the gender pay gap include:
- Conducting an audit to understand the size of the gender pay gap
- Reporting the findings to management and employees
- Promoting a gender-inclusive business culture while adopting a holistic approach to equal remuneration for women and men for work of equal value.
- Taking action to increase the number of women in leadership positions
- Encouraging men to access flexible work arrangements and leave entitlements.
- Making jobs more flexible so that more women access higher-level jobs and, therefore, higher pay.
- Making equitable salary offers to men and women.
- Encouraging women’s participation in leadership roles as well.
- Women’s education must be promoted.
What Needs to be Done to Arrest This Decline?
The report criticises the rising inequality in the number of women holding offices in India. This scenario could be improved by passing the Women’s Reservation Bill, which would reserve 33% of all seats in the Lok Sabha and all State legislative assemblies for women. Also, steps could be taken to close the gender wage gap in all industries.
According to estimates from the World Inequality Report 2022, men in India make up 82% of the labour force while women make up 18%. Also, there is room to increase funding for the gender budget, which strives to guarantee that women have equal access to socioeconomic advantages as men.
Article Written By: Priti Raj