Gender Pay Gap

(Kleven et al., p. 44)

According to The Global Gender Gap Index 2021, the 10 countries that narrowed the gender gap the most in the last year were Iceland, Finland, Norway, New Zealand, Sweden, Namibia, Rwanda, Lithuania, Ireland, and Switzerland.

Many factors can interfere with these positions. Still, the resurgence of the conservative debate on abortion, associated with centuries of women’s incapacity to make their own decisions about their bodies, sheds light on perhaps the most important point to consider at this time of the debate: how essential it is for women to be able to legislate for their own causes.

The percentage of women in parliament in these “top 10 countries” are the highest rates worldwide. The possible reasons that led Iceland to keep its number one spot in the 2021 edition for the 12th year in a row can be attributed to the fact that they elected the world’s first female president in 1980, and the number of women in the Icelandic parliament gradually increased during those years, until it got one of the highest rates in the world as we saw (47.6 % in 2021). Consequently, the country has spent many years legislating in favour of women, including making laws that are completely avant-garde when compared to the rest of the world.

As an example, the Act on Maternity/Paternity Leave and Parental Leave No. 95/2000 grants equal paid leave to men and women, with the aim of ensuring that the child has access to both parents and that both of them have the same opportunity to reconcile work and family. By doing this, it does not matter whether the employer will hire a young man or a young woman because, likewise, the possibility of parental leave for both will have to be considered. Also, it allows child-related tasks to be better divided.

Gender pay gap app

The gender pay app was created after the 2018 Corporate Governance Code stated that companies with 250 or more employees must calculate the difference in earnings. The app organised the data and published it for everyone to see the actual data from every company. The truth is that even though a lot of companies are fighting this inequality, some showed a huge divergence.

At Manchester City Football Club, for example, the average hourly wage earned by women is 86.6% lower than that of men. At the British Airways airline, the rate is not so high, but it is striking that women earn 53.6% less, on average per hour worked, than men.

To make the submission, the employer must follow some requirements defined by his own government, who offer guidance explaining the data the employers must gather and how the calculations have to be made in order to be as fair and relatable as possible.

Thus, the employers must calculate, report, and publish this gender pay gap figures:

1. percentage of men and women in each hourly pay quarter;
2. mean (average) gender pay gap using hourly pay;
3. median gender pay gap using hourly pay;
4. percentage of men and women receiving bonus pay;
5. mean (average) gender pay gap using bonus pay;
6. median gender pay gap using bonus pay.

Differences in payment are caused by occupational segregation, which means there are more men in higher-paid industries and women in lower-paid industries. We can see this with the financial industry where 61% of the workers are men. However, women rule 78% of the health and social work industries, areas that got an added value after 2020 after the pandemic covid 19 struck.

The second type or cause of discrimination is called vertical segregation, where fewer women are in senior, and hence better-paying positions. It gets even more shocking when analysing the more innovative or growing markets in the finance industry for instance. Here, among senior roles in venture capital (VC) firms, only 4,9% of the partners are female.

The picture doesn’t get much better when it comes to private equity (PE), in which fewer than 10% of senior roles are held by women. This vertical segregation also has an influence or an aspirational side, with fewer women in these roles, it is harder for other women to think of advancement in a company and, as a consequence, to negotiate their salaries, ask for a raise, or to apply for a better position.

The responsible investment groups have spent years working to improve gender diversity among senior decision-makers at listed companies. While these efforts have been related to positive, trendy, fashionable and financial outcomes, to date they are yet to make a significant reduction in the key issue of gender pay gaps. Initiatives such as this public information and shout-out, help society get more involved.