Gender Pay Gap

Major Gender Wage Discrepancy

In the majority of economies, women are recognized to make less money than males. According to a research by the salary-tracking website PayScale, women earn around 76% of what men earn globally. There is a clear gender wage discrepancy for equivalent jobs inside the same firm with the same training and experience. Therefore, there is strong evidence that male and female employees throughout the economic spectrum earn significantly different wages. While there may appear to be a little difference in some circumstances, the wage gap is typically wide in most occupations. Men are paid more than women, even in traditionally female-dominated sectors. For example, wage disparities in professions like social work show that median income for female workers is lower than for their male counterparts. The well-educated women are not immune to facing this problem. Even women training for traditionally male-dominated jobs do not have a guarantee of being paid equally as male and female employees working at similar positions and performing the same duties receive different wages.

Persistence of the Gender Wage Gap

Businesses have voluntarily sustained the remuneration gap due to the existing gaps in labor laws and trends in the market. The equal pay laws that concern wages and salaries have no or small effects on the gender wage disparities. The policies that directly affect women’s work, like taxes, marital status etc have contributed to the growth of the gender wage gap. For example, the Equal Pay Act that came into force after the Fair Labor Standards Act was amended, requires women’s pay be equalized with that of men whenever they have similar jobs (Giapponi & McEvoy, 2005). The law was aimed at elimination of discrimination and the adverse effects on the living standards as a result of women having lower wages. According to the Equal Pay Act, an employer ought not to discriminate workers in any institution based on their gender by paying employees wages at a lower rate than that of opposite gender employees for the similar job on the positions requiring similar skills, responsibility, and effort (Giapponi & McEvoy, 2005). In Corning Glass Works vs. Brennn, it was held by the Supreme Court that under the EPA, in order to provide evidence in case of discrimination in payment, the claimant is required to establish that the employer remunerates the workers of a particular gender more than those of the opposite gender for considerably similar work. However, detecting of equality of work, responsibility, effort, and skill may be hard. According to Giapponi and McEvoy (2005), it is more intimidating for an employee to prove that pay inequality is due to gender discrimination. Consequently, the employers continue enforcing pay gap knowing that they can defend themselves within current law provisions as they are reasonably certain that the employees making such claims will have difficulty proving gender discrimination.

Market Liberalization and Globalization

Market liberalization and globalization usually propose that higher market levels orientation of countries would result in criticism in terms of economic equality of women. Such are the supposed reasons for the highly competitive pressure in companies, the frequency of employing and sacking practices, and few permanent jobs. With the competitive business pressures, companies tend to lower the cost of labor to increase profit. Mostly labor cost is reduced by decreasing the number of workers and hiring cheap labor, who are mostly women. With the increase in frequency of hiring and firing, women tend to prefer low pay than none. Since most jobs are temporary, it becomes difficult for women to negotiate for equal pay.

Labor Laws and Female Employees

The labor laws, female employees and labor unions bear the most significant liability for the presence of the gender wage gap. Labor laws like the Equal Pay Act have been passed to ban gender-based discrimination between the male and female employees in the same organization performing the same job that requires similar skills, responsibilities, and efforts, and carried out under the same conditions. Later in 2009, the Fair Pay Act was passed (Giapponi & McEvoy, 2005). According to Giapponi and McEvoy (2005), under this act, a worker can file a grievance about an unmerited pay in 180 days of every biased paycheck. In Holloway vs. Best Buy Co., Holloway claimed, on behalf of a presumed class, that the Best Buy Company was discriminating against minorities and women in regard to “recruiting, job assignments, hiring, promotions, and transfers” (Giapponi & McEvoy, 2005). There was no plaintiff who filed a charge within 300 days after the standard limitation period. The plaintiffs were seeking relief under the Fair Pay Act. Notwithstanding the Fair Pay Act, the Judge refused to apply the continuing violation doctrine. It stated that since Holloway did not claim that the initial job assignment effected compensation, the Fair Pay Act did not permit him to challenge job assignments which were outside the standard EEOC charge-filling period.

Persistent Pay Gap

Despite the principle of equal pay being reflected in the laws, the existing average pay gap remains to be high for women and it keeps increasing. According to Fredman (2008), whereas laws are necessary, they are not enough and they do not always address the gender pay gap. Such laws failed to tackle discretionary aspects that are related to pay that disproportionally impact on women, as well as address or at least decrease the structural reasons for the existing gender pay gap. Usually, women employees’ competencies are undervalued compared to men. Jobs that require the same skill, experience, and qualifications tend to be paid poorly and undervalued whenever they are occupied by women instead of men (Pillinger, 2005). Also, the performance evaluation and thus the pay level and career progression can also be biased favoring men. For example, in a case where men and women are both well-qualified, more value can be accorded to responsibility for capital than for the human’s responsibility.

Collective Bargaining and Labor Unions

Collective bargaining through labor union has proved to be effective to a certain extent. However, to promote equal pay for both genders, workers must have rights to organize, which have been under attack making it difficult for labor unions to fight for equal pay (Pillinger, 2005). Almost half the states have passed the right-to-work laws which sometimes act as obstacles for the efforts of employees.

Measures to Ensure Elimination of the Gender Pay Gap

It is important that businesses comply with the prevailing labor laws and the best practices to avoid suits for the pay disparity based on gender. The pay equality between male and female workers demands the attention of the employer now with the labor laws than ever. Both the state and the federal governments have passed strict laws to ensure they close the gap between male and female wages (Zweimüller, Winter-Ebmer, & Weichselbaumer, 2008). The employers, who fail to address the existing pay disparities in their organizations, may face severe consequences if they are sued under an equal pay claim. Employers ought to perform pay audit in their organizations before any filling of a law suit that would reveal any disparities and establish the reason for the existence of such disparities. The audits assist the employers limit or protect against liability. Employers have to be careful when engaging legal counsel (Zweimüller et al., 2008). They ought to engage qualified legal counsel in the carry out of the audit for them to uphold privilege to the possible level. Employers should know that the main reason for pay disparities is usually the starting pay. Consequently, they ought to analyze the starting pay of an employee and avoid setting salary based only on the wage history of the potential employee.

Affirmative Action and Legislative Movements

Issues of gender pay disparity can decline through the use of affirmative action by employers and legislative movements seeking to streamline employees’ pay. Zweimüller et al., (2008) propose that the effectiveness of affirmative action is something positive as it lowers the wage gap between males and females at least in those industries with high incidences of federal contracts or those with a high rate of growth. Essentially, economics asserts that with any law, those that are likely to be caught violating it, are more likely to observe and abide by it. It thus follows that all the industries ought to face similar scrutiny just like those with low gender wage gaps.

No Significant Effect of Affirmative Action

Affirmative action was found to have no significant effect in the 1980s of the Affirmative Action inconsistency on pay disparities (Eveline & Todd, 2009). Previously it has been established that the organizations that have the potential of being the review targets of Affirmative Action are those with a high female-male ratio in employment and thus shifting the primary goal of the affirmative action from wage parity to equitable distribution in employment of males and females (Eveline & Todd, 2009). The econometrics shows that government efforts for Affirmative Action had weak effect since the existing procedures of federal action or pressure are weak.

Recommendations and Conclusions

The solution to the pay disparity between the genders is in the legislative management of the issue. According to Boivin and Odero (2006), corresponding laws should be enacted to oblige employers to create uniform pay systems for their workers at all levels irrespective of their gender. The federal and the state government should also consider passing a paid family and medical leave insurance program. Boivin and Odero (2006) assert that since most of the caregiving responsibilities are on women, women are likely to be forced to leave the workforce to offer family care. Moreover, it is likely that working women are the discrimination targets and even deprived of working opportunities owing to harmful stereotypes on their role as caregivers, which men are less likely to encounter. A paid family and medical leave insurance plan would give a wage substitute to all employed women, whenever they are forced to go for leave to take care of their families, increasing the economic security of their families (Boivin & Odero, 2006). The paid leaves would reduce the gaps in work histories experienced by women-the issue that contributes to the wage gap and affect their opportunities to be promoted.

Laws that require employers to conduct pay audit should be passed. Pay audits assist in identifying the likely gender pay gaps, determine if the gaps are statistically significant, and assist in detecting any apparent disparities (Boivin & Odero, 2006).

The federal and the state government ought to consider conducting a review of the existing legal framework, the Equal Pay Act and the Fair Pay Act (Boivin & Odero, 2006). It is important to review the laws to determine if they are effective in the alleviation of the problem of Gender Pay Gap.

Reason for Choosing the Topic

I chose the topic because in business law we learned about the obligation of employers to abide by the state and federal laws in management of employees’ relationships. Here, we discussed on the employees’ rights including compensation and equality. Through the topic, I seek to attain an intricate understanding of the prevalent compensation discrimination and the dynamics that shape this practice.

References

Boivin, I., & Odero, A. (2006). The Committee of Experts on the Application of Conventions and Recommendations: Progress achieved in national labour legislation. International Labour Review, 145, 3.)

Eveline, J., & Todd, P. (2009). Gender Mainstreaming: The Answer to the Gender Pay Gap?. Gender, Work & Organization, 16, 5, 536-558.

Fredman, S. (2008). Reforming Equal Pay Laws. Industrial Law Journal London-, 37, 3, 193-218.

Giapponi, C. C., & McEvoy, S. A. (2005). The Legal, Ethical, and Strategic Implications of Gender Discrimination in Compensation: Can the Fair Pay Act Succeed Where the Equal Pay Act has Failed?. Journal of Individual Employment Rights, 12, 2, 137-150.

Pillinger, J. (2005). Pay Equity Now! Gender Mainstreaming and Gender Pay Equity in the Public Services. International Feminist Journal of Politics, 7, 4, 591-599.

Zweimüller, M., Winter-Ebmer, R., & Weichselbaumer, D. (2008). Market Orientation and Gender Wage Gaps: an International Study. Kyklos, 61, 4, 615-635.