Strategies to Solve the Gender Pay Gap

“How to solve the Gender Pay Gap”

Executive Summary

The most common issue within a business is the on-going gender pay gap problem between men and women. As of June 10^th 1963, the Equal Pay Act was signed into law stating that men and women are entitled to the same wage for the same work (Connley, 2018). The Employment Equality Acts 1998-2015 deals with equal pay for equal work and outlaws discrimination in any working environment (Citizen Information, 2016). As of 2014, the average EU gender pay gap stands at 16.7% (European Commission, 2018). According to the European Commissions, it is estimated that women in the EU earn around 16.4% less than men (Market Inspector, 2018). The role of women and men in work and the division of unpaid work in the home has a significant impact on work and working arrangements (IBEC, 2017). Ireland has one of the lowest female employment rates suggesting that there is a significant structural issue in our country (IBEC, 2017). Women returning to work after maternity leave earn on average 7% less per child compared to childless women (Fortune, 2017). Discrimination and the existence of subtle biases can lead to unintentional consequences and have a profound impact on men and women in an organisation (IBEC, 2017). The European Commission’s report states that women only represent 17% of board members in publicly listed companies within the EU and only 4% of chairs of boards (European Commission, 2016). I picked four out of a variety of reasons why the pay gap still exists which include the motherhood penalty, balancing work and family life, discrimination and bias and a gender segregated labour market. I’ve concluded that by providing an educational training system for both men and women, providing an easy accessible nursery in the workplace as well as showing fair treatment of all workers regardless of gender, favouritism or qualifications will create a more gender diverse business and reduce the pay gap issue.

Introduction

This report will be discussing the gender pay gap in Ireland today and generally, worldwide. I will discuss the main areas of Inequality within a business and how these facts should and are being put into place. The gender pay gap is the average difference between men women’s gross earnings for the same job. The gender pay gap has always been a major issue among many businesses; however, Belgium is one of a few countries with the very lowest pay gap in Europe and the Organisation for Economic Co-operation and Development (OECD) (Stone, 2018). The majority of people in society today find it quite obvious that both men and women should be quite entitled to the same pay wage for performing the exact same job. According to the European Commissions, it is estimated that women in the EU earn around 16.4% less than men (Market Inspector, 2018).

The main goal for this report is to provide valuable information regarding the on-going gender pay gap issues in the workplace. I will be going through statistics of the gender pay gap, reasons as to why it still exists such as, the motherhood penalty, balancing work and family life, discrimination and bias and a gender segregated labour market, while also providing various recommendations on how to solve the reasons stated above, and finally a conclusion summarising my report.

Findings and Discussions

The most common issue within a business is the on-going pay gap problem between men and women. Gender inequality has become a widespread problem in our society today.  As of June 10^th 1963, the Equal Pay Act was signed into law stating that men and women are entitled to the same wage for the same work; yet, 55 years on women are still struggling in the workplace (Connley, 2018). According to data from the Census Bureau, women earn a median annual average of €10.86 less than their male counterparts (Wolfe, 2018). Women must work an additional 44 days to earn the same annual salary as men (Wolfe, 2018).

The latest statistics from the European Commission’s report in 2016 shows that Ireland is starting to fall back from 14.4% in 2014 to 13.9% in 2012 (European Commission, 2018). Often women hold higher levels of qualifications than their male co-workers but because they are women they are seen at lower standards and are not rewarded with the same gratitude. As of 2014, the average EU gender pay gap stands at 16.7% (European Commission, 2018). Society has much improved since 1963 when the equal pay act was signed, but the pay gap issue still remains unresolved.

The Employment Equality Acts 1998-2015 deals with equal pay for equal work and outlaws discrimination in any working environment (Citizen Information, 2016). However, there are still numerous reasons why the pay gap is so hard to close.

1. The Motherhood Penalty: Mothers suffer a penalty relative to non-mothers and men in the form of lower perceived competence and commitment, higher professional expectations, lower likelihood of hiring and promotion, and lower recommended salaries, therefore, this evidence implies that being a mother leads to discrimination in the workplace (Correll, Benard, Paik, 2018).  Women returning to work after maternity leave earn on average 7% less per child compared to childless women (Fortune, 2017).

2. Balancing work and Family life: The role of women and men in work and the division of unpaid work in the home has a significant impact on work and working arrangements (IBEC, 2017). Ireland has one of the lowest female employment rates suggesting that there is a significant structural issue in our country (IBEC, 2017). Childcare costs in Ireland are one of the highest in the OECD accounting for 53.5% of the average wage in Ireland, compared to an average of 27.6% in other OECD countries (IBEC, 2017). Ireland has a relatively low-level State funding for childcare but the second highest direct payments to parents of any OECD country because of child benefit (IBEC, 2017).

3. Discrimination and Bias: Discrimination and the existence of subtle biases can lead to unintentional consequences and have a profound impact on men and women in an organisation (IBEC, 2017). Unconscious bias can undermine the policies and procedures set up to promote gender balance and diversity in the organisation, further stereotypes and biases can emerge regarding women with children which can prevent them being considered or selected for certain projects or development opportunities due to assumptions about their commitment or availability (IBEC, 2017).

4. A Gender Segregated Labour Market:  Occupational segregation is one of the main causes of the gender pay gap and is a drag on economic growth. There is segregation between men and women in the workplace where certain genders are over represented in certain roles or occupations (IBEC, 2017). The European Commission’s report states that women only represent 17% of board members in publicly listed companies within the EU and only 4% of chairs of boards (European Commission, 2016).

Recommendations

From my research, the pay gap issue could be eliminated by changing the company’s view on women, making the company more diverse and by creating an equal working environment in order for co-workers to achieve their best potential. The pay gap can be eliminated by:

• A free part-time nursery should be available in the workplace from when a child reaches nine months so a working woman isn’t at a disadvantage when returning to work (Market Inspector, 2018).
• Providing a training programme for both men and women when starting a new job, so that they are both on the same level of education. This then eliminates favouritism and promotions based on the level of qualifications you hold.
• By holding a trial day for all candidates to observe their abilities rather than judging them by their Curriculum Vitae or interview.
• After a certain target is reached, offer rewards to each candidate to provide motivation within the company to achieve the best objectives.

Conclusion

In conclusion, the on-going gender pay gap issue remains an issue in Ireland and businesses worldwide. The motherhood penalty, balancing work and family life, discrimination and bias and a gender segregated labour market are four out of numerous reasons why the pay gap still exists. By providing an educational training system for both men and women, providing an easy accessible nursery in the workplace as well as showing fair treatment of all workers regardless of gender, favouritism or qualifications will create a more gender diverse business and resolve the pay gap issue.

Reference List

• Market Inspector, 13^th November 2018- Market-inspector.co.uk. (2018). 7 Ways to Reduce Gender Pay Gap | Market-Inspector. [online] Available at: https://www.market-inspector.co.uk/blog/2017/06/decrease-gender-pay-gap [Accessed 14 Nov. 2018].
• Jon Stone, April 5^th 2018-  The Independent. (2018). This is how Belgium is defeating the gender pay gap. [online] Available at: https://www.independent.co.uk/news/world/europe/gender-pay-gap-belgium-how-fight-business-work-women-income-men-a8290321.html  [Accessed 19 Nov. 2018].
• Courtney Connley, 10^th June 2018- Connley,C. (2018).Why the gender pay gap still exists 55 years after the Equal Pay Act was signed. [online] CNBC. Available at: https://www.cnbc.com/2018/06/08/why-the-gender-pay-gap-still-exists-55-years-after-the-equal-pay-act.html  [Accessed 21 Nov. 2018].
• Lahle Wolfe, 12^th June 2018- The Balance Careers. (2018). What Is (Gender) Pay Inequity at Work and Is It Illegal?. [online] Available at: https://www.thebalancecareers.com/gender-discrimination-in-the-workplace-3515145  [Accessed 21 Nov. 2018].

         European Commissions, 22^nd  November 2018- Ireland – European Commission. (2016). The EU and Irish women – Ireland – European Commission. [online] Available at: https://ec.europa.eu/ireland/node/684_en  [Accessed 22 Nov. 2018].

         Citizens Information, 14^th January 2016- Citizensinformation.ie. (2018). Equality in the workplace . [online] Available at: http://www.citizensinformation.ie/en/employment/equality_in_work/equality_in_the_workplace.html  [Accessed 22 Nov. 2018].

         Correll, Benard, Paik, 2018- –  Getting a Job: Is There a Motherhood Penalty?

         Gender Action Portal. (2018). Getting a Job: Is There a Motherhood Penalty? . [online] Available at: http://gap.hks.harvard.edu/getting-job-there-motherhood-penalty [Accessed 22 Nov. 2018].

         Madeline Farber, April 3^rd 2017-  http://fortune.com Fortune. (2018). http://fortune.com.  [online] Available at: http://fortune.com/2017/04/03/equal-pay-day-2017-wage-gap/ [Accessed 22 Nov. 2018].

         IBEC, October 2018-  Ibec.ie. (2018). [online] Available at: https://www.ibec.ie/IBEC/DFB.nsf/vPages/Social_affairs~Consultations_and_submissions~public-consultation-on-measures-to-address-the-gender-pay-gap-in-ireland-04-10-2017/$file/Ibecs+observations+on+the+measures+to+address+the+gender+pay+gap+in+Ireland.pdf  [Accessed 22 Nov. 2018].