Women still earn less than men

05 December 2018 | Labour

Women earn on average 6.5% less per hour than men in Namibia, which is one of the worst pay disparities in upper-middle-income countries.

However, on a monthly basis Namibian women earn slightly more than men (1.9%).

The average hourly and monthly pay varies because men generally do more jobs that are paid per hour.

This year's International Labour Organisation (ILO) Global Wage Report provides a detailed examination of gender pay inequalities in the job market.

The report identifies Russia as the upper-middle-income country where women earn the most per hour - on average 22.9% more than men.

It is only in Costa Rica where women earn less than Namibia, earning 6.8% less than men per hour.

On a monthly basis the picture differs though. There Armenia emerges as the top middle-income country where women earn on average 34.1% more than men, while Thailand is the worst country where women earn 0.043% less than men per month.

According to the report women continue to be under-represented in traditionally male occupation categories.

Within similar categories women are consistently paid less than men, even if their educational qualifications are just as good or better than those of men in similar occupations.

“When women do participate in the labour market, they tend to have more limited access than men to high-quality employment opportunities. One reason for this is the unequal distribution of hours of unpaid work in the household.

“Women perform most of the household chores and most unpaid care work, both for the household in general and for elderly members and children in particular. As a result, time-use surveys show that, when unpaid as well as paid work is included, women work longer hours than men,” the report says.

It points out that there is a common pattern in labour markets around the world that the proportion of women declines when moving from lower to higher hourly wages.

“Women are under-represented in all hourly wages,” it says.

According to the report the share of women in the lower occupational categories (unskilled, low-skilled or semi-skilled) is also much higher than the share of women in the top occupational categories (CEOs and corporate managers). Within occupational categories women have lower returns from education than men.

This may be the result of a range of factors such as pay discrimination at the workplace to “horizontal segregation”, whereby the same occupational level of women and men has different job tasks, according to the report.

It further says that countries with the highest levels of wage inequality are found in the low- and middle-income groups

Among low-income and middle-income countries, South Africa and Namibia have the highest inequality.

South Africa has the highest wage inequality with a Gini coefficient of 63.9, while Namibia's wage inequality is scored the second highest with a Gini coefficient of 62.

The least wage inequality among low- and middle-income countries is in Sweden, which has a Gini coefficient of 19.5.

The report indicates that the global wage growth in 2017 was not only lower than in 2016, but fell to its lowest growth rate since 2008, remaining far below the levels observed before the global financial crisis.

Global wage growth in real terms (that is, adjusted for price inflation) has declined from 2.4% in 2016 to just 1.8% in 2017.

In Africa real wages declined overall in 2017 by 3%.

In the case of Namibia the report says although there was an increase in real wages of 15.2% in 2013, it has since declined. In 2014 it declined by 7.9% and over the next two years by 2.8% respectively. No data is available for last year.

Over the past ten years there has only been a 0.4% increase in real wage growth in Namibia, says the report.

Senegal, the country with the highest real wage growth in sub-Saharan Africa, had a growth of 32.3% over the past ten years.

It says possible explanations for subdued wage growth include slow productivity growth, the intensification of global competition, the decline in the bargaining power of workers and the inability of unemployment statistics to adequately capture slack in the labour market, as well as an uncertain economic outlook which may have discouraged companies from raising wages.

The report highlights the need for better data on the distribution of wages.

It says many countries, particularly low- and middle-income countries, have very limited statistics on wages.

“An important question is whether the gender pay gap in a particular country is mostly driven by pay gaps at the bottom, in the middle, or at the top of the wage distribution.”

It says minimum wages have been found to be effective at reducing gender pay gaps at the bottom of the wage distribution, particularly when they are well designed and serve as an effective wage floor.

However, the report warns that to maximise the effect of minimum wages on gender pay gaps it is necessary to ensure that minimum wages do not discriminate, directly or indirectly, against women, for example by setting lower wage levels in sectors or occupations where women predominate, or even excluding female-dominated sectors or occupations from legal coverage. Also, it says that much of the gender pay gap in many countries remains unexplained by differences in education and in other labour market attributes such as age, experience, occupation or industry. Therefore the unexplained part of the gender pay gap dominates. It is thus important to “unpack” at the national level the reasons behind this portion of the gender pay gap.

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