Gender gap narrows in a world in which men still rule

Ripa Rashid is highly educated, has worked at some of the world’s top blue-chip companies, and is an expert in workplace diversity and talent management, but even she got caught out by the gender wage gap.

Ms Rashid, senior vice-president at the Center for Talent Innovation (CTI) in New York, recalls working at a think-tank in Malaysia.

“It took me six months to realise I was being paid 30 per cent less than a male colleague. By that time, I had already made the decision to leave.”

Her experience illustrates the secrecy that exists in many companies and cultures around wages. It allows managers to treat people unequally, even where legislation exists, and makes it hard to get timely data.

Research by the International Labour Organisation (ILO) shows that the gender wage gap has gradually narrowed over the past few decades, for example in Latin America.

However, progress appears to have stagnated, or even reversed, since the 2008 global downturn. Even in senior ranks, disparities persist and range from a few percentage points in Panama, to almost 20 per cent in South Africa, and more than 50 per cent in Azerbaijan, says an ILO report Women in Business and Management: Gaining Momentum, released in January.

“The world assumes that managers earn more but there’s still a pay gap when we know women are often more educated than men,” says Linda Wirth, one of the authors of the ILO report. “The Brics [Brazil, Russia, India and China] have seen greater growth and reduction of poverty but they also have growing inequality in many areas.”

The pay gap with men often only reflects women who work as employees, not the self-employed, who make up about 60 per cent of the female workforce in Latin America and the Caribbean and closer to 50 per cent in Asia, says Kristen Sobeck, an ILO economist.

“A smaller gender pay gap is only part of the picture and may in some instances not even necessarily reflect positive changes in the status of women in a given country,” she says.

But, according to a World Bank report Gender at Work, women are less likely to be in the labour force and more likely to earn less than men in the 10 most populous developing countries: India, Indonesia, Brazil, Pakistan, Bangladesh, Mexico, Vietnam, the Philippines, Egypt and Turkey.

Working women are less likely than working men to be employed in wage jobs in all these countries except Brazil. The report also confirms that the gap in earnings tends to be larger in the informal than in the formal sector.

Henriette Kolb, head of the gender secretariat at the International Finance Corporation, the private sector financing arm of the World Bank, gives the example of Turkey, where “the divergence between what men and women are paid appears to be small, yet there are large gender disparities in labour force participation and employment in wage jobs”.

However, some women might be paid more than men in developing countries that have invested heavily in health and education. Top jobs in these sectors can command a premium and often employ many women, explains Sheila Wild, a British equality consultant and a former director at the Equal Opportunities Commission.

“I would expect the wage gap to be lower in some emerging markets, because the gender gap is not just about what women are paid, but how much they get in relation to men and often they are all paid less,” she says. “There is also less part-time work, which is a dangerous area if it’s just treated as a cheap labour pool as it is in Britain.”

Several factors have contributed to the small progress made so far. More women than men are graduating from university in, for example, Brazil (60 per cent) and the United Arab Emirates (65 per cent), CTI research shows.

The working week may be much longer, with more than 60 hours common, but a majority of women in Bric countries had “shoulders to lean on” using family members or paid domestic help. The public sector is also seen as an attractive alternative to the private sector, with 65 per cent of women in Brazil.

A broad mix of legislation and private sector action tailored to individual markets is needed to achieve faster progress in wage parity, say experts.

“The private sector can take action by providing targeted training and skills-development by creating flexible, family-friendly working environments, and by using global business certification standards for gender equality, says Ms Kolb.

Uschi Schreiber, chairwoman of the global accounts committee at EY, the professional services firm, calls for greater transparency around wages in the private sector. “If you look at how governments do it, they have visibility around what people can earn, so we should be able to use bands at least. Pay rates are often hidden from negotiators and not everyone has the full picture.”