Introduction/Problem Statement
Despite much hullabaloo on women's equality and empowerment, it is not yet ascertained that the fairer sex is considered as equal when it comes to employment. Four decades after the enactment of Equal Pay Act, research finds that the salary of female bosses runs 35 percent short of their male colleagues. Statistics galore revealing the wage differential across occupations and industries. By contrast, critics on the 'right' opine that the pay gap is just a 'myth' as women deserve to get paid less because they work in less demanding jobs than male counterparts. Obviously, the issue carries much heft in national and international parlors with bigwigs citing different statistics to approve their opinion.
This paper considers both arguments to answer the question, "is there wage discrimination today?." The author has collected scholarly information and statistical data to conduct a thorough analysis on the matter. The first section of the paper discusses the wage differential by referring to the statistical data. The second part conducts an analysis in an attempt to find out the answer to the question. Based on the analysis, the author concedes that the wage gap exists even today. The comprehensive discussion is expected to impart a holistic understanding of the topic.
Wage Differential: A Statistical and Empirical Overview
Discrimination is considered a situation in which individuals are treated differently irrespective of the same productivity and abilities. In most of the cases of gendered wage discrimination, employers feel 'prejudiced' against female employees. Becker(1971) has proposed that it refers to the taste-based discrimination. Another variations of discrimination might include statistical discrimination. That is, employers are likely to use statistical information reinforcing that women lag behind in productivity than their male counterparts. They, in back of their minds, are swayed by the 'distorted' facts that women have responsibility for home chores that might inhibit them to work as effectively as their male colleagues. With studies galore that women on top tier roles have proven themselves at par with men in terms of productivity and performance, these 'negative' stereotypes only encourage employers to single out women. Using the group statistics to generalize the results and apply it to every women are also faulty practices on the part of employers. They result in the active discrimination against a women who might be more dedicated towards the work that those in the average group.
A recent article has stated that policymakers endorse the existence of wage discrimination. In an attempt to solve the dilemma, Massachusetts has rolled out a policy of not asking candidates their previous salaries. The aim is to discontinue the gender pay gap that might have existed in their previous job roles. The move, first of its kind in America, emphasizes on breaking the vicious cycle of wage discrimination for women and people of color.
It is depressing to know that in a developed nation as America, the median annual pay for women holding a full-time, year around job is $39,621 while the figure for men stands tall at $50,383. Simply put, it means that women in the United States are paid 70 cents for every one dollar paid to their male counterparts. Broadly, it amounts to the wage gap of around 11,000 dollars. Another developed nation Canada ranks 27th in wage equality, and it is behind Philippines, Nigeria, and Albania. A research by Catalyst Canada reveals that the wage gap in the nation stands twice the global average.
Given this appalling statistics, critics' argument of occupational differences does not seem to hold water. A recent survey indicated that women who work in challenging and high-paying jobs are also not immune to wage gap. Female doctors, ironically earn 18 percent less than their male colleagues. Researchers pinpoint that the discrimination is inversely related to the transparency. That is, there are more sharp pay gaps where standards and compensation policies are opaque. It is the reason that public universities and government jobs have much smaller gaps compared to the private sector industries. The Massachusetts law that will take effect from 2018 will revert the traditional trend of asking, "how much you used to earn in your previous job?."
A fact sheet confirms that discrimination and bias continue to play the spoilsport in the 21st century that boats of women empowerment and inclusive society. While 68 percent of the wage gap can be attributed to explicit factors, 38 percent of the remaining part remains unaccounted leaving researchers in the doldrums. It leads them to ultimately conclude that unconscious bias and subtle discrimination do affect women's wages. Empirically speaking, women themselves consider equal wages as one of the top matters to be implemented at the workplace. Ironically, just 28 percent of them believe that they are being paid fairly. This conclusion is the outcome of a number of statistical analysis confirming that wage gap does exist regardless of education, occupation, and the type of industry. Women who have completed their Masters are just paid 72 cents for every dollars paid to their male counterparts. Sadly, women with Masters are paid less than men with only Bachelor degrees.
It is a bitter fact that women-specific occupations pay much less than male dominated occupations. Though women made great strides in the 1970s and 1980s in entering the jobs that were traditionally supposed to be the stronghold of men, the progress slowed down somewhere in the mid-1990s. As of now, women's comprise a major chunk of waitresses, retail workers but few are technicians, engineers, and scientists.
It is further debilitating that salary gap gets widen at the higher echelons of the administration and the management. The Chief executive of Chartered Management Institute opines that ignorance and apathy contribute to this discrimination that, equally, pervades the higher levels also. Hinting at the other issue, the CMI reveals that there is a substantial variation in bonus pay for women over 40 years. The average bonus for female directors is 41, 956 pounds against men's 53, 010. Confirming to this hypothesis is another survey showing that women earned an average salary of $115,000 against men's $130,000. This slight difference, however, doubled after nine years of their work tenure. It means that men earned roughly$400,000 while women earned $250,000. Bonus paid by employers time to time is the among the best explanation that can define this huge gap of 60 percent. Simply, it means that women are not only discriminated in recruitments but also in promotions.
Analysis and Discussion
The detailed data and scholarly opinion do answer in imperative. That is, there still exists wage discrimination irrespective of the industry type and women's job positions. First and the foremost, it is important to consider the critics argument that wage differential is a 'myth' as it is actually occurred because of different characteristics between males and females. This is a broad hypothesis that covers the a whole gamut of cultural, psychological, physical, and social factors to define the wage-differential as a myth. For instance, critics would say that women have to take care of family and children. It is for this reason that their dedication lowers down at the workplace. Furthermore, they need jobs with less complexity and more flexibility. They take maternity leaves, men don't. These features are inversely proportional to pay scales.
Delving deeper into this argument reveals that critics might be right in stating that these are some factors defining the wage differential. Nonetheless, their biggest mistake is that they fail to acknowledge the hidden anomaly in these so many causes. If a women is more responsible for household chores than males, it is nothing short of discrimination against them. Social pressure on them to select certain job roles clearly entails that they are not 'free' to have choices on their own. The argument of supporters further state that even if women enter the traditionally male dominated fields, they are less likely to earn the same as their male counterparts earn. Wages plummet down when they enter in such fields as running camps. Conversely, wages go up when men enter in women dominated fields as housekeeping.
The hot potato thus, is to identify the percentage of core discrimination in wage differential. Notwithstanding the candid statistics, the optimistic pool might point out that the wage gap might not be because of the discrimination but accrue as a result of various legitimate factors ranging from educational differences to skills gap. Critics on the right argue that the wage gap persists because of individual choices and job tenure. However, research studies over the years bust this myth and clearly state that discrimination is one among the best explanations for pay gaps that exist after education and experience are taken into account. Harvard economist Claudia used the data set of men and women with same degrees and work experience to demonstrate that the gender discrimination was at the heart of the was at the wage gap. In the same vein, Cornell economists Francine D. Blau and Lawrence M. Kahn have attempted to quantify the 'unknown' factors that might play a role in explaining wage gap. These unknown factors go beyond educational attainment, occupational differences, differences in numbers of hours, and the years of experience. As per Kahn and Blau, the percentage comes out to be 41.4. They aver that at least some of it is due to the discrimination.
Claudia Goldin further argued that critics might be right in stating that 'some' of the gap exist because of gender-based education and occupational segregation but these aspect further smack of discrimination against girls and females. Their choices, at times, are influenced by family, peers, and the society as a whole. Various gender stereotypes still prevail that have forced women to bear the brunt of discrimination since centuries. The argument concerning life choices made by women is what scholars consider an oversimplification of a complex issue. In fact, it is the overt or covert discrimination that has put a double burden on the shoulders of women. It is further ironical to believe that 30 percent of Americans still feel that women should stay at home to take care of children.
Theoretically speaking, discrimination can be pigeonholed into various categories. Demand theories state that low demand for female laborers plummets the wages down. Feminist perspective further argues that stereotyping has occurred general theories in economics enjoy the male domination. This has led to the discrimination, sometimes termed as systemic discrimination, i.e., the discrimination outside of labor market. There are various other forms of discrimination that have raised eyebrows of researchers time to time.
First is the statistical discrimination that accrues out of applying group characteristics to an individual. Historically, women have been loosely attached to labor market than men. As such, they are, in the group, perceived as less productive to men. Having considered the average productivity levels, employers are likely to prefer males over females that sharpens the wedge further.
Secondly, there might be the "taste for discrimination" as Becker has mentioned. Prejudice might arise because of the employer, customer, and the employee. An employer with a taste for discrimination or biased preferences may prefer white males than females. Likewise, a male employee might receive disutility in working with women thereby forcing the firm to pay a compensating differential to attract male workers. Lastly, the prejudice might come from the customers' side if they prefer to buy products and services from the certain groups( in this case males). As firms are becoming more and more customer oriented, their hiring decisions get closely intertwined with a consumer perspective.
Last but not the least, there does exist power discrimination generated by labor unions on the supply side and the monopsonistic firms on the demand side. The crucial assumption is that the firms might take the advantage of comparatively inelastic supply of female laborers. For instance, a married female professor is associated with the single university in the town. She , here is effectively facing the monopsony competition where the buyer can take advantage of her immobility that occurs due to societal norms.
The second aspect of power discrimination comes from the labor unions. Trade unions, that are supposed to promote the right of employees in a non-discriminatory manner, have further pissed females as they have only perpetuated the traditionally gendered notion. As unions have a predominantly male history, the rights of female workers are often relegated to the background. More actively, unions emphasize the notion of breadwinner wages for males thereby negating the very notion of equal pay.
Conclusion and Recommendations
Taking a cue from the scholarly opinion and empirical evidence, it can be established that there does exist wage differentials between men and women. While some scholars have been able to quantify the discrimination arising out of core biases, the arguments of optimistic pool are nothing short of discriminatory practices. Amidst this backdrop are theoretical explanations highlighting the reasons for discrimination. Though these are not applicable everywhere, they do pinpoint the underlying structure that might be helpful in understanding the dynamics of the issue in detail. The statistical data further testifies the existence of discrimination irrespective of occupation and other features.
It is worth mentioning that the roots of discrimination have penetrated deeper because if the inefficiency of mist of the legal regulations that aim to curb it. There are slew of loopholes in legislations as Equal Pay Act. Most of the current laws rely on individual victims of discrimination who bring about the change by enforcing a form of contract. If they win, it is only for themselves. The sad part is that the settlement decision is not applied to women in general and they have to fight for themselves if they have to fight discrimination. Compliance is another major issue with these rules. As there is no power to look if the organization as a whole is discriminatory, employers 'genuinely' find the way out of the pool of legislations. Legislations as Massachusetts is a step in the right direction.
Experts warn that the equal pay will remain a dream unless there are efforts to change the system. For that, initiatives must come from all ends including employees( male and females) and employers. First of all, employers must focus on making the workplace inclusive and friendly for women. They must emphasize on hiring candidates based on their skills, knowledge, and qualification irrespective of their gender. An inclusive workplace will nix stereotypical assumptions thereby leading to more equality in the organization. Training all supervisors and managers on making ethical and judicious employment decisions is also imperative to curb discrimination. There just be properly written guidelines for recruitment and promotions, that too base on objective, fair and measurable criteria. These guidelines must be conveyed to all employees so as to address their concerns and queries.
Furthermore, a transparent audit must be conducted time to time so as to ensure that the organization is not involved in any discriminatory pay practices. Employers must make sure that the differentials, even if they exist, are based on the legitimate differences concerning skills, knowledge, and work performance. While the audit will help them check any discriminatory practices, it will save the organization from legal maladies in the future.
The efforts from employers' side must find the support of women who should show the due courage and temerity to report any discriminatory behavior regarding the organization's pay practices. The knowledge of available legislations and their implementation criteria is a plus. Many studies have endorsed that women don't tend to discuss their salaries as aggressively as men do; coming out of the pink ghettos and openly talking about money will impart them the much-needed information.
Succinctly, equal pay depends a lot on how an organizations frames it policies in a transparent manner and sticks to them when it comes to implementation. For that to happen, the employer must have a stringent monitoring process in place. Additionally, the communication must be open and clear so as to fetch out employees' feedback on pay policies of the company. Managers can conduct focus groups, time to time, to identify the perception of staffers concerning pay differentials. Reevaluation of the whole system can be done if the staffers do not perceive the system as fait and transparent.
Knocking the heads together will not only make employees satisfied about the system, but it will also assist employers to explore effective solutions to the problem of wage discrimination. Still, the intention of the employer plays a substantial role. If there is a genuine intention to end the discrimination, there are several ways to achieve that.
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