Women seem to be their own worst enemies when it comes to reducing the gender pay gap

Women seem to be their own worst enemies when it comes to reducing the gender pay gap

The rules for reporting gender pay gaps, which come into force this month, are a positive step towards making Irish workplaces more inclusive. But even if legislation can inform about the letter of the law and increase awareness of the difference, an even bigger challenge lies ahead: to change the public perception of gender equality in pay, especially among women. Even with the diversity, justice and inclusion that now drives the corporate agenda, it seems that women are still their own worst enemy when it comes to wage expectations.

“Even as students, women expect to earn significantly less than their male counterparts and this difference in expectations mimics the actual pay gap that exists when they enter the labor market,” says economics professor Pia Pinger from the University of Cologne, who estimates that gender pay gaps can lead to that women earn about half a million euros less than men during their careers.

What is most surprising about Prof Pinger’s findings is that they were based on research conducted with young people about to start working, not with older employees who had accepted the gender pay gap as something they had to live with. The research cohort consisted of more than 16,000 students and recent graduates from universities across Germany who studied a wide range of subjects. They ranged in age from 18 to 28, and although they were confident in their own abilities, the women among them had apparently already accepted the pay gap between the sexes as a given.

“When women start expecting lower wages, this leaves little room for negotiation and they are more likely to be reduced to a lower wage. By comparison, men are much bolder. They enter the wage conversation with higher numbers in mind and expect to be negotiated, says Prof Pinger.

Prof Pinger found that female students expected an average starting salary of around € 33,400, while male students expected to start at just over € 39,000. She believes that it is crucial to reveal these gaps because they potentially determine the choices around education, the labor market, household negotiations and wage setting.

“In terms of relative scopes, women would need to work an average of about four hours more per week in the same profession and industry, or major in medical science rather than the humanities, to catch up with the starting salaries of their male peers. It would also take them about nine years more of accumulated work experience to compensate for the gender penalty, says Professor Pinger.

“In addition, we must be aware that the gender pay gap does not only affect women now. It also has far-reaching implications for their future economic well-being, with pay gaps likely to be important for important pensions and savings decisions. “

According to the new rules for reporting gender pay gaps that apply here, companies will need to publish statutory calculations that show the extent of the difference between what men and women earn as a group each year based on the average gross hourly wage (This is not the same as equal pay for equal work which is already part of Irish labor law.).

Companies employing more than 250 people will need to publish details of the gap from this year, while organizations with more than 150 employees will be taken online in 2024 and those with more than 50 employees will be included from 2025.

To meet the requirements, companies must take a snapshot of the gap that exists in their organizations in June. They have six months to crush the data before reporting the results and announcing how they intend to deal with it.

This is not just an exercise in money. It is also about representation and whether women are equally represented at all levels within an organization. If women have more of the lower paid jobs than men, then the wage differences between the sexes in that business are greater.

Ireland’s gender pay gap currently stands at an estimated 8.3 percent according to Eurostat’s 2020 figures, but it’s a global problem that the World Economic Forum says will take 100 years to stop with current progress. The wage gap between the sexes is usually greater in male-dominated sectors and sectors where wage levels are largely determined by negotiations.

Prof Pinger notes that women also have lower expectations of the maximum salary they can earn during their careers and often underestimate the losses associated with raising children and its impact on their salary path.

“It’s a bit of a chicken and egg situation. Do women expect less so they ask for less? ” she says.

“What definitely matters is boldness in initial wage negotiations with important consequences for expected entry-level and lifetime salaries. So perhaps targeted bargaining for women is a way to bridge the gap in people’s consciousness and in reality, while a more realistic view of the career costs of starting a family can also get women to negotiate for a more equal distribution of child-rearing responsibilities in households. “

That said, Prof Pinger adds a caveat because there are studies that show that women who negotiate in a way that is seen as too powerful often pay a price for doing so.

“When a woman has negotiated very strongly and people are asked if they want to work with her, they often say no and it happens more for women than for men,” she says.

“So we know that women are punished for negotiating hard and maybe because they anticipate this behavior, they ask for less to avoid it.”

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