Wage gap: why do women earn less [and how to calculate it]? - gender equality

The gender pay gap is a persistent reality in today's labor market. Although gender equality is a fundamental principle, the difference in earnings between men and women performing similar work remains significant. In this article, we will explore the underlying causes of this disparity, its consequences for society and, most importantly, how we can calculate and understand this gap to drive change.

What Is the Gender Pay Gap? Definition and Scope

The gender pay gap is defined as the relative difference between the average earnings of men and women. It is not simply a matter of comparing gross wages, but of analyzing earnings over the course of a working life, taking into account factors such as promotions, advancement opportunities and labor market participation.

Pay Gap vs. Equal Pay: Two Different Concepts

It is crucial to distinguish between the pay gap and equal pay. Equal pay refers to men and women receiving the same salary for the same work, a legal principle in many countries. The pay gap, on the other hand, is a broader measure that reflects overall inequality in earnings, even when men and women hold different jobs.

Causes of the Pay Gap: An In-depth Analysis

The pay gap is not a simple phenomenon, but the result of a complex interaction of social, economic and cultural factors. Some of the most important causes are:

• Direct discrimination: Although illegal, pay discrimination based on gender still exists in some companies and sectors.
• Occupational segregation: Women tend to be concentrated in lower-paid jobs, such as childcare, teaching or administrative work, while men dominate higher-paid sectors like engineering or finance.
• Unconscious biases: Unconscious biases can influence hiring, promotion and pay decisions, favoring men over women.
• Family responsibilities: Women often take on a larger share of family responsibilities, such as caring for children or elderly parents, which can limit their job and pay opportunities.
• Salary negotiation: Women are often less likely to negotiate their salaries than men, which can result in lower starting salaries and reduced long-term growth potential.
• Lack of representation in leadership positions: The scarcity of women in senior management and on boards means that female perspectives are often not considered in strategic decisions, which can perpetuate the pay gap.

Consequences of the Pay Gap: Social and Economic Impact

The pay gap has significant consequences for both women and society as a whole:

• Lower financial security for women: The pay gap reduces women's earnings over their working lives, affecting their ability to save for retirement, buy a home or cope with unexpected expenses.
• Higher risk of poverty: Women are more likely to live in poverty in old age due to lower incomes and savings.
• Impact on the economy: The pay gap reduces women's purchasing power, which affects demand for goods and services and ultimately hinders economic growth.
• Social inequality: The pay gap perpetuates gender inequality and reinforces stereotypes about the roles of men and women in society.

How to Calculate the Pay Gap: Methods and Examples

Calculating the pay gap can be complex, but there are simple methods to obtain an estimate:

1. Collect salary data: Obtain data on the average earnings of men and women in a specific sector, a company or even at the national level.
2. Calculate the difference: Subtract the average salary of women from the average salary of men.
3. Express the difference as a percentage: Divide the difference by the average salary of men and multiply by 100.

For example, if the average salary of men in a company is 50.000€ and the average salary of women is 45.000€, the pay gap is 5.000€, which represents 10% (5.000€ / 50.000€ x 100).

Strategies to Reduce the Pay Gap: A Call to Action

Reducing the pay gap requires a joint effort from companies, governments and society as a whole. Some key strategies include:

• Pay transparency: Companies should be transparent about their pay policies and provide information on pay differences between men and women.
• Objective performance evaluation: Performance evaluations should be based on objective criteria and avoid unconscious biases.
• Promotion of equal opportunities: Companies should ensure that women have the same promotion and professional development opportunities as men.
• Support for work–family balance: Work–family balance policies, such as flexible working hours and parental leave, can help women balance their professional and family responsibilities.
• Encouraging salary negotiation: Women should be encouraged to negotiate their salaries and advocate for their interests.
• Legislation and public policies: Governments can implement laws and public policies to promote pay equality and combat discrimination.