- Efforts to close the gender pay gap are crucial for achieving equality and economic justice.
- On average, 71% of the globe’s population live in a country with pay disparity.
- The UK 2022 gender pay gap decreased 0.31% (mean) and 1.14% (median) compared to 2021.
International Equal Pay Day is a global observance institutionalised by the United Nations dedicated to raising awareness about the persistent gender pay gap and advocating for wage equality between men and women.
The gender pay gap, typically celebrated on 18 September, is a pervasive issue across the world, affecting women in almost every industry throughout their careers. On average women earn 20% less than men for similar work, often due to occupational segregation, discrimination and societal norms.
The UN’s Sustainable Development Goals (SDGs) seek to address the cause with Goal 5: Achieve gender equality and empower all women and girls. This objective focuses on employment for everyone and equal pay, which is also part of the 2030 Agenda for Sustainable Development.
Efforts to close the gender pay gap are crucial for achieving gender equality and promoting economic justice. International Equal Pay Day serves as a reminder that reaching pay equity is not just a women’s issue but a fundamental human rights issue that benefits societies and economies.
Where is there evidence of inequality?
Even though total global inequality saw a significant decline by the 1990s compared to previous decades, the work is far from done.
When it comes to income, the last two decades have witnessed an improvement. However, the difference between less developed areas like sub-Saharan Africa and first-world regions like North America is still stark, with the latter having incomes 16 times higher than the former.
On average, 71% of the globe’s population live in a country with pay disparity, even if areas like Latin America and the Caribbean showed a slight decrease in income gaps. In the last 15 years, the number of billionaires has almost doubled, and the fast rise of incomes is one of the driving factors of inequality.
Gender still plays an important part, however, with up to 30% of income inequality firstly seen within households.
Beyond income and purchasing power, inequality has wide-ranging effects. Life expectancy and access to necessities like healthcare, education, clean water and sanitary facilities are just a few of the many aspects of a person’s life that are significantly impacted by opportunity inequalities. They can also impede someone’s ability to exercise their fundamental human rights by subjecting them to abuse, discrimination, and a lack of access to the legal system.
The year 2018 marked the 12th consecutive year of declining worldwide freedom, with political and civil liberties generally going down in 71 countries.
Additionally, it promotes an atmosphere of vulnerability, instability and ambiguity, weakening societal trust in institutions and the government and escalating social unrest and tensions that might ultimately result in bloodshed and conflict.
What is being done to generate greater equality in pay?
“In addition to the legal requirement to provide equal pay in the workplace to men and women carrying out ‘like work, work rated as equivalent, or work of equal value’ in accordance with the Equality Act 2010, organisations in private, public and voluntary sector with 250 or more employees must also calculate and report their gender pay gap,” Kate Palmer, HR advice and consultancy director at Peninsula told Capital Monitor.
As reported by the UK Government in 2022, the Department for International Trade (DIT) Gender Pay Gap (GPG) showed a decrease of 0.31% for the mean and 1.14% for the median compared to 2021 levels, but the Gender Bonus Pay Gap (GBPG) saw a noticeable increase of 9.4% for the mean and 4% for the median in 2022 compared to March 2021.
The decrease in GPG is a positive sign for the UK, showing a more balanced situation between men and women in the workplace. On the other hand, the increase in GBPG still showcases the need for change in the higher levels of management.
Palmer added: “Women are still having to bring claims through employment tribunals to seek redress for unequal pay. There also remains a gender pay gap. This is the difference between the average pay of men and women in an organisation.”
How can investors support greater pay equality?
Many investors, especially in the US, have been actively involved in pushing companies to increase the representation of women on their boards. Investors are increasingly concentrating their attention on the diversity of organisations’ top executive ranks as they target corporate boards. Only 15% of Fortune 500 companies currently have female CEOs, which is ten times higher in comparison with 2022, but still not enough.
Even though women’s rights have come a long way over the past century, much more must be done. Investors may make a significant contribution to promoting changes inside the businesses they are interested in. This may be done in one of two ways: either by supporting resolutions and actively interacting with management to emphasise the need of gender equality, or by entrusting fund managers to aggressively push these crucial initiatives on their behalf.
[Read more: Explainer: What does gender inequality mean in practice?]