How to Close the Wage Gap
The wage gap has been a persistent problem in many societies around the world, where women, and other marginalized groups earn less than their male counterparts for the same job.
The wage gap not only affects individuals, but also has significant social and economic consequences. Addressing this problem requires a multifaceted approach that involves government policies, employer practices, and individual actions.
What is the gender pay gap?
The gender pay gap is not the same as equal pay. Equal pay is where women and men are paid the same for performing the same role or different work of equal or comparable value. The gender pay gap is the difference between the average earnings for men and women, expressed as a percentage of men's average earnings.
Why does the pay gap exist?
Over the years many experts have considered various reasons for the gender pay gap. And many believe that it stems from women choosing to stay home for family, choosing lower-paying jobs, or having less education. However, other examples point to bias and discrimination, a lack of flexible support for work, and other social factors like racial discrimination.
The gap between women 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 can include:
women and men working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages
conscious and unconscious bias in hiring and pay decisions
high rates of part-time work for women
women’s greater time out of the workforce for caring responsibilities (childcare and ageing parents) which can impact their career progression and opportunities
How can we reduce the gender pay gap?
Lobby government to implement pay equity laws
One of the most important ways to close the wage gap is for governments to implement pay equity laws. These laws would require companies to pay employees based on their skills and experience. In addition to ensuring fair pay, pay equity laws also help reduce income inequality and promote economic growth. Governments can also promote pay transparency by requiring companies to disclose salaries of their employees, which can help identify and address any pay disparities.
As of 2022, 42 of the 50 US states have enacted equal pay laws, acts or statutes; however, it’s important to note that all 49 states and the District of Columbia fall under The Equal Pay Act of 1963, which prohibits pay discrimination on the basis of sex. In recent years, many state legislatures have pushed stronger laws into action. Some of the more sophisticated laws include specifications about pay transparency and wage history to ensure no employers try to cut corners when it comes to pay equity.
On August 31 2021, the Government of Canada brought the Pay Equity Act into force in its efforts to close the gender wage gap and ensure workers in federally regulated workplaces receive equal pay for work of equal value. With that, employers with 10 or more employees will have three years to develop and implement their proactive pay equity plans.
Organizations can promote diversity in leadership roles
Another important way to address the wage gap is for organizations to promote diversity in leadership positions. Companies that have diverse leadership teams are more likely to have better pay equity practices and to provide equal opportunities for all employees. This not only benefits employees, but also helps companies to be more innovative, creative, and profitable.
Employers can conduct an audit to better understand the size of the gender pay gap, report the findings to management and employees, and create a roadmap to reduce the gap. Organizations can also provide more opportunities for education and training, as this action can enable groups to access higher-paying jobs.
Addressing unconscious bias is also crucial to closing the wage gap. Unconscious biases can affect our decisions about who to hire, promote, and pay. For example, women and people of color may be overlooked for promotions or given lower salaries due to stereotypes or assumptions about their abilities. To address unconscious bias, employers can offer unconscious bias training to their employees, which can help them recognize and overcome their biases.
Flexible work arrangements can also help to close the wage gap, especially for women who are more likely to take time off to care for children or elderly parents. Employers can offer telecommuting options or flexible schedules to allow employees to balance their work and caregiving responsibilities. This can help ensure that women are not penalized for taking on caregiving responsibilities and can continue to advance in their careers.
Everyone has a role to play
Men and women can also take action to close the wage gap. Men can also play a role by advocating for and supporting the careers of women and people of color in their workplaces.
Empowering women to negotiate higher salaries for themselves and to advocate for others in the workplace is also a key role that women can play in their work environments. Women and men can also support policies and organizations that promote pay equity.
The bottom line
Closing the wage gap requires a concerted effort from governments, employers, and individuals. It requires policy changes, employer engagement, and individual actions. While there has been a lot of progress in recent years, there is still work to be done to ensure that everyone has an equal opportunity to succeed in the workplace. By working together, we can create a more equitable society where everyone is paid fairly for their work, regardless of their gender, race, or other characteristics.