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The Gender Pay Gap in 2021—Essential Steps That Could Bring It Down

December 30, 2020

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Today, women earn 81 cents for every dollar a man makes. For women of color, immigrants, and women with children, the difference is even more significant. Unfortunately, the pandemic adds up more challenges, pushing 47 million more women below the poverty line, reversing decades of progress to eradicate poverty—according to UN Women.

The world has made meaningful steps forward concerning technology. However, there’s still a long way to go in terms of erasing the pay gap between men and women: 250+ years until the globe reaches economic gender parity, as the World Economic Forum 2020 has predicted recently.

In this article, we take a look at the steps that employers and governments could take to reduce the inequalities:

  • Acknowledging the gender pay gap
  • Addressing inequities caused by COVID-19
  • Taking steps in changing the status quo

 

Acknowledging the gender pay gap

Women’s status has certainly improved in recent years, but inequity is still lingering as the result of continuing historical, social, and political legacies. And today, societies are deeply affected by outdated norms about gender roles, rooted in systemic inequalities. 

On one hand, gender stereotypes push women toward care-focused work, resulting in their over-representation in informal jobs, outside the area of labor laws, with consequences as bad as low pay, unsafe environments, or a lack of benefits. At the same time, nowhere in the world are men spending the same amount of time on unpaid work as women. And although care work is essential for prospering communities and economies, it remains undervalued and under-recognized.

On the other hand, society has taught women to be less assertive than men when it comes to asking for raises or negotiating about salary. Out of fear of rejection or punishment for being perceived as “demanding” in the workplace, women avoid asking for equal pay. 

 

Addressing the inequities caused by the pandemic

Women make up the majority of workers on the front lines of the COVID-19 pandemic. They are providing care and health services while facing great risks. And as more women are facing economic difficulties today, fighting the gender pay gap is more urgent than ever. But the impact on women’s lives is not just economic. The past months have been making it challenging accessing sexual health, and violence against women reports have also increased all around the world.

As for the highest risk of suffering layoffs and reductions, jobs in social services, administrative support, or personal care services – widely practiced by women – are all affected. As a result, plans for decreasing the poverty rate have shifted to an increase of 9.1% due to the pandemic. 

According to the State of the Gender Pay Gap 2020 research by PayScale, women are also more likely to take time off work to care for children and other family members.

COVID-19 is exposing vulnerabilities in social, political, and economic systems. It is forcing a change in priorities and funding across public and private sectors, with effects on the well-being of women and girls. So, organizations and governments need to acknowledge these issues and start taking steps to close the gender pay gap as soon as possible.

 

Taking steps in changing the status quo

Today, women workers’ average pay is generally lower than men’s for all levels of education, in all countries. This pay gap is found across all sectors of the economy and it has proven to be harmful to women’s financial stability. And experts are skeptical when it comes to the wage gap vanishing anytime soon. But there are various steps that companies and governments can take to eradicate pay inequality.

 

Diverse hiring and rethinking promotion practices 

To ensure hiring practices are not discriminatory, businesses should train managers in identifying unconscious biases and provide women employees with mentoring opportunities that will guide them to career progression. 

There’s also the matter of the under-representation of women in emerging roles: cloud computing has 12% of women professionals, and AI sees just 26% of the workforce represented by women. Companies can address these issues by ensuring that their strategies include diverse hiring. Building a diverse workforce will come with great benefits not only for lessening the pay gap but also for growing the company’s revenue.

Updating family-friendly policies

According to the International Trade Union Confederation, 2019, women assume 75% of all unpaid care work. Both businesses and governments should actively encourage men to benefit from paid parental leave policies. Organizations that establish new gender-neutral policies to support families have a competitive advantage, and they also promote the development of all employees. 

Gender-neutral paid parental leave policies are essential today, especially in countries where there is no legal requirement for paid parental leave (like the US). 

Legislating data transparency 

When it comes to wages and salaries, data transparency can help businesses better understand and address gender pay gaps. Organizations should provide a transparent salary range for the positions they are offering. Moreover, studies show that gender pay gaps shrink when companies are required to disclose them.

Restoring gender balance in leadership

The lack of diversity in leadership affects the diversity in background, innovation, and a limited ability to problem-solve. The gender imbalance in the highest-paid positions also perpetuates economic gender gaps, and it makes it more challenging for women to access networks for advice and support. Organizations should recognize the importance of gender balance in leadership as a means for increasing profitability and innovation. 

There are various practices that companies can deploy to ensure wage parity, such as conducting periodic salary corrections and checking for unconscious biases.

 

Conclusion

All these actions require a collective effort across societies. However, these efforts, and the research supporting all the evidence, need to expand beyond the high-income contexts and take a more intersectional approach. Governments and the private sector need to address the occurrence of pay gaps based on both gender and intersecting demographic characteristics including race, age, employment type, and sector—and identify the right mix of remedies.