Understanding the Gender Pay Gap

On June 20th, 2023, the Aspen Institute Africa and Absa Bank collaborated to host an enlightening webinar titled “Why Men Make More.” This virtual event brought together experts in the field to delve into the complex issue of the gender pay gap in both the United States and Africa. With speakers from renowned organizations such as Payscale and UN Women, the webinar provided a platform for in-depth discussions on the underlying causes, solutions, and lessons learned regarding this pervasive disparity. 

The gender pay gap represents the discrepancy in earnings between men and women, arising from a multitude of factors such as systemic biases, occupational segregation, and limited opportunities for career advancement. To grasp the magnitude and implications of this issue, the webinar examined the gender pay gap in both the United States and Africa. In this blog post, we will explore the key insights shared during the webinar, drawing upon research conducted by Payscale and UN Women, to enhance our understanding and promote education about the gender pay gap.

Research by Payscale: Unveiling the U.S. Gender Pay Gap

Amy Stewart, Executive Editor at Payscale, shared valuable insights regarding the gender pay gap in the United States. Payscale’s extensive research, based on its 2023 Gender PayGap Report, has uncovered significant findings.

Payscale’s research distinguishes between the controlled and uncontrolled gender pay gap, shedding light on different aspects of the issue. The controlled gap measures “equal pay for equal work,” assessing how women are paid compared to men in the same job, accounting for factors such as job title, education, experience, industry, job level, and hours worked. On the other hand, the uncontrolled gap measures how women are paid compared to men holistically, reflecting the types of jobs and associated earnings occupied by women overall versus men overall.

The uncontrolled gender pay gap, sometimes referred to as the opportunity gap, is an indication of societal valuation of women. Payscale’s research reveals that, in 2023, for every $1 that men make, women earn $0.83 when data is uncontrolled. Although this represents progress, with the gap narrowing by one cent compared to the previous year, it highlights the persistence of disparities in overall earnings.

The controlled gender pay gap, which factors in compensable factors such as job title, education, experience, industry, job level, and hours worked, stands at $0.99 for every $1 men make. While this gap may appear negligible, small differences in earnings on the dollar can accumulate over a lifetime career.

Research by UN Women: Exploring the African Gender Pay Gap

Mehjabeen Alarakhia, Regional Policy Advisor at UN Women, shed light on the gender pay gap in Africa, highlighting the importance of region-specific analysis. UN Women’s research offers critical insights.

The African gender pay gap varies across countries due to particular socio-economic factors, cultural norms, and legal frameworks. Women in Africa often find themselves disproportionately employed in the informal sector, where earnings tend to be lower, job security is weaker, and opportunities for skill development and career progression are limited. Despite significant progress in educational attainment, women face challenges in translating their education into equal economic opportunities due to discriminatory practices and entrenched gender roles.

Mehjabeen highlighted that in Africa, the gender pay gap tends to increase with lower levels of education.i.e.women with only a primary school level of education will make significantly less than their male counterparts with the same level of education.In Africa, while the motherhood penalty remains a key contributor to the gender pay gap, there are unique dynamics at play. UN Women noted that child care tends to be more affordable, and the community-centered culture means that women often have someone else to leave their child with as they work. This helps mitigate some of the challenges faced by working mothers in other regions. However, setbacks arise for married women or women cohabiting, who often bear the responsibility of taking care of their partners, in-laws and the home. These additional responsibilities can hinder career progression and contribute to the gender pay gap in Africa.

The Absa Experience

Throughout the webinar, participants discussed effective strategies and shared valuable lessons learned from various initiatives aimed at bridging the gender pay gap. Absa Bank, represented by Head of Business Banking Elizabeth Wasunna, is renowned for its commitment to gender diversity. Absa provided insights into their experiences and ongoing efforts. A number of African countries that have managed to increase the number of women on boards point to ‘nudges’ from regulatory institutions, as well as the power of positive peer pressure. For example, Absa was the first company in Kenya to announce a 50:50 gender split on its board, which showed that it was achievable.

Solutions and Lessons Learned

Creating equal opportunities through gender-balanced leadership and implementing inclusive policies and practices that address unconscious bias can level the playing field for career progression. Investing in gender-neutral education and training, and offering mentorship programs ensures women have the necessary skills and opportunities for advancement. For corporations, offering flexible work arrangements, such as remote work options and family-friendly policies, supports work-life balance and enhances women’s participation in the labor force.

At the macro-level, pay transparency and parental leave legislation as well as a minimum wage can help drive equity in the formal sector. However, even in jurisdictions with a vast informal sector these practices can set catalytic benchmarks. And regulatory recommendations can be valuable ‘carrots’ helping shift cultural expectations over time.

By implementing a blend of long-term strategies at the policy, corporate, community and individual levels, organizations and societies can take meaningful steps toward closing the gender pay disparity.

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