Why does gender pay gap persist?

• September 18 is observed as International Equal Pay Day.

• The day aims to raise awareness about the global issue of unequal pay between men and women for work of equal value. 

• It does not only highlight the persistent gender pay gap, which refers to the average difference in earnings between men and women, but also emphasizes the need to actively reduce this gap.  

• The reason this day is marked in September is because, by this point in the year, men have already earned what women will take until the end of the year to earn. 

• In other words, women would need to work almost three extra months to make the same amount as their male colleagues in a full year. 

• Progress on narrowing that gap has been slow. While equal pay for men and women has been widely endorsed, applying it in practice has been difficult.

Why does the gender pay gap persist?

• Across all regions, women are paid less than men, with the gender pay gap estimated at around 20 per cent globally. It means, women workers earn 80 per cent of what men do.

• Gender equality and the empowerment of women and girls continue to be held back owing to the persistence of historical and structural unequal power relations between women and men, poverty and inequalities and disadvantages in access to resources and opportunities that limit women’s and girls’ capabilities. 

• Ingrained inequalities cause the gender pay gap. 

• Inequality in the average wages between men and women persists in all countries and across all sectors, because women’s work is under-valued and women tend to be concentrated in different jobs than men. 

• Even though the work itself may require equal or more effort and skills, it’s valued and remunerated less. For women of colour, immigrant women and mothers, the gap widens. 

• Women perform three more hours of daily care work than men. This includes household tasks such as cooking, cleaning, fetching firewood and water, and taking care of children and the elderly. Although care work is the backbone of thriving families, communities, and economies, it remains undervalued and underrecognized. 

• The “motherhood penalty” exacerbates pay inequity, with working mothers facing lower wages, particularly as the number of children they have increases. 

• Gender stereotypes, discriminatory hiring practices, and promotion decisions also contribute to pay inequalities.

• Restrictive, traditional gender roles are also spurring pay inequalities. 

• Gender stereotypes steer women away from occupations traditionally dominated by men and push them toward care-focused work that is often regarded as “unskilled”, or “soft-skilled” and therefore, lower paid.

• Women earn 77 cents for every dollar men earn for work of equal value — with an even wider wage gap for women with children.

• It is estimated that only 28 per cent of women employed worldwide get to enjoy paid maternity leave.

• Globally, nearly 65 per cent of people above retirement age without any regular pension are women.

What must be done?

• Equal pay for work of equal value is a fundamental matter of labour and human rights, social justice, and economic resilience, and a strategic priority for building competitive and sustainable enterprises.

• As a Fundamental Convention, the ILO’s Equal Remuneration Convention (C100) directly addresses the principle of equal pay for men and women for work of equal value. 

• International Labour Standards emphasize the crucial role of workers’ and employers' organizations in achieving this goal through social dialogue, with freedom of association and collective bargaining at its core.

• One of the most effective and quickest ways to narrow gender pay gaps is through minimum living wages (or wage floors) and universal social protection. 

• Minimum living wages benefit all low paid workers. Since women are starkly overrepresented in low paid work, it would usually benefit women more dramatically. 

• Germany, for example, recently introduced a national minimum wage to tackle its stubborn gender wage gap of 22.4 per cent. 

• In 2020, New Zealand passed the Equal Pay Amendment Bill, ensuring that women and men are paid equally for work that’s different but has equal value, including in chronically underpaid female-dominated industries. 

• It is also important to recognise that remuneration is more than a basic wage. It encompasses all the elements of earnings. This includes overtime pay, bonuses, travel allowances, company shares, insurance, and other benefits.

• Countries must reinforce equal pay for work of equal value as a shared goal that benefits workers, businesses and society at large. Achieving equal pay for work of equal value and position pay equity is a human right and social development imperative.

• By marking this day, stakeholders, including governments, employers, workers, and international organisations, are urged to take concrete actions to ensure that women are paid the same as men when performing work of equal value. 

This includes:

i) Developing and implementing policies and practices that promote pay transparency.

ii) Challenge gender stereotypes.

iii) Improve access to higher-paying jobs and leadership positions for women. 

• The ultimate goal is not only to raise awareness but to catalyse action that leads to a more equitable and inclusive workforce, where equal pay for equal work is the standard. 

• The key emphasis of this day is on achieving equal pay for equal work, which is not only a matter of fairness but also a driver of economic growth and social justice. 

• Equal pay for work of equal value principle is also recognised as one of the priority areas of the United Nations Sustainable Development Goals (UNSDGs) to be achieved by the year 2030.

Scenario in India

• Women form an integral part of the Indian workforce. As per Census 2011, the total number of female workers in India is 14.98 crore and female workers in rural and urban areas are 12.18 and 2.8 crore respectively. 

• Out of total 14.98 crore female workers, 3.59 crore females are working as cultivators and another 6.15 crore are agricultural labourers. Of the remaining female workers, 8.5 million are in household Industry and 4.37 crore are classified as other workers.

• As per Census 2011, the work participation rate for women is 25.51 percent as compared to 25.63 per cent in 2001.

• As per the labour force survey data of the National Sample Survey Office (NSSO), Indian women earned, on average, 48 per cent less than their male counterparts in 1993-94. Since then, the gap has declined to 28 per cent in 2018-19.

• The government has enacted Equal Remuneration Act, 1976 which provides for payment of equal remuneration to men and women workers for the same work or work of similar nature without any discrimination and also prevent discrimination against women while making recruitment for the same work or work of similar nature, or in any condition of service subsequent to recruitment such as promotion, training or transfer. The provisions of the Act have been extended to all categories of employment.

• The Act is implemented at two levels — central level and state level. The Act is enforced by the central and state governments by conducting regular inspections to detect the violation of provisions of the Act by establishments. The office of Chief Labour Commissioner (Central) in the central sphere and state government in the state sphere are the appropriate authorities to conduct inspections to ensure implementation of the provisions of the Act.

• Under the provisions of the Minimum Wages Act, 1948, men, women and transgender employees shall get the same rates of wages for the same work or work of similar nature. The Act does not discriminate on the basis of gender. 

• Maternity Benefit Act, 1961, as amended vide the Maternity Benefit (Amendment) Act, 2017, inter-alia, provides for paid maternity leave to women workers. Creche facility in respect of establishments having 50 or more employees is also provided. 

• The government has increased paid maternity leave from 12 weeks to 26 weeks of which not more than eight weeks shall precede the date of expected delivery. 

• Depending upon the nature of work assigned to a woman, the Act provides for work from home for such period and on such conditions as the employer and the woman may mutually agree.

• The Parliament passed the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in August 2005. It came into force on February 2, 2006.  Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is a demand driven wage employment programme, which provides for livelihood security by providing at least 100 days of guaranteed wage employment in every financial year to every rural household whose adult members volunteer to do unskilled manual work.

• Several other studies have found that, with the expansion of the scheme, the rate of compliance with minimum wage regulations increased, the gap in rural wages between formal salaried workers and casual workers decreased and, similarly, the gender wage gaps in rural areas declined.