Gender wage gap studies - Dissertation Social

What is the gender wage gap caused by and how does the discrimination affect female employees and the society? The human capital theory attributes wage differences to variables such as education, experience and attachment to the labor market. However, women have always worked. The innovations of the 20th century have led to great economic and social changes, like industrialization, urbanization and, more recently, the globalization of the economy. These have transformed the agrarian economy of the primary sector into a service economy that is propelled by technology.

As the agricultural society was transformed, the home was no longer the “main place of work”. It was becoming increasingly acceptable and financially necessary for women to enter the paid labor market outside the home. Women are almost half of the workforce, yet they are still getting pay less than men. A drastic earning gap can be observed through the last century between men and women doing the same job. Failure to pay women equally limits their ability to attain economic stability and job segregation by sex limits women from accomplishing their full potential.

On the other hand, it affects the workplace as well. The gender pay gap can lead to changes in the work environment, including a decrease in satisfaction (and retention) from female employees and a discriminatory attitude in other areas that could lead to other types of discrimination claims. The gender wage gap is unadjusted and is defined as the difference between median earning of men relative to median earnings of women. The issue with determining it is that it can be can be measured in 3 ways: firstly, by comparing the “annual earnings of both part-time and full-time workers”, women earned “an average of 69 cents for every dollar earned by men in 2016” (Canadian Income Survey). Secondly, by comparing “the annual earnings of full-time workers”, women earned “an average of 75 cents for every dollar earned by men in 2016” (Canadian Income Survey, 2018). And finally, by comparing “the hourly wages of full-time working women to those of men”, women earned “an average of 87 cents for every dollar earned by men in 2016” (Canadian Income Survey, 2018).

As it can be observed, regardless of the calculation applied, there is a clear wage gap between men and women. In order to fight against gender discrimination, The Equal Pay Act was established in 1963, it necessitates that women and men receive equal

pay for equal work in the same establishment (EEOC) (Murphy, 1970). The jobs do not need to be identical, but they must be substantially equal (Murphy, 1970). Following this legislation, discrimination towards women in the workplace decreased massively, but was not eliminated entirely (Murphy, 1970). The three economic theories most often cited to explain the pay gap are human capital, the dual labor market, and labor reserves.

Several studies have been done to explain the wage gap and most are based on a combination of the economic theories described below. The results vary, but none succeed in explaining the difference. Despite the constant popularity of the human capital theory, which attributes wage differentials to variables such as education, experience and attachment to the labor market, the most recent Statistics Canada study calculates that, education and experience account for only 12% of the wage gap. These authors say they cannot pinpoint the causes of the other unexplained part of the wage gap, and that “it is probably something that is part of the labor system or the labor market as a whole.”(The Toronto Star, 1995).

In the past, entry of women into the professions like law and medicine was commonly unaccepted because women were could not enter universities and qualificate for degrees (Gender pay gap statistics). But in the modern society, women are earning more college degrees than men (U.S. Department of Education, 2016). According to the article “Graduating to a pay Gap: The Earning of Women and Men One Year After College Graduation,” Women who graduate college are earning 82 percent of what men are earning just one year later. This is very unfair and unlawful.

Even though women earn higher grades in college, on average, than men do, academic achievement doesn’t influence the pay as much as the major and the universities that they attended (Gender pay gap statistics). It has been proven that majors do make a difference in the workforce. In the workforce, education cannot help narrow the pay gap that exist between men and women. In lower-wage occupations, predominantly held by women, the narrow pay scales may mean that everyone is getting around the same low pay, although pay gaps between men and women still exist in these fields. But in higher-wage occupations, the sky is often the limit for compensation, especially with commissions, bonuses, or promotions that also are disproportionately awarded to men. Women in higher-wage occupations still face a glass ceiling with respect to pay and promotions. That means a larger percentage pay gap opens up between men and women in the higher-paying occupations.

So not only is it true that that finance occupations tend to pay well and many care-giving occupations pay poorly, women face discrimination at both ends of the pay spectrum. Last, the theory of manpower reserves suggests that the very structure of capitalism depends on the existence of cheap, replaceable and renewable manpower. The wage gap theorists suggest that in the western world women form these labor reserves.

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