November 16th marked Equal Pay Day. It's from this day until the end of the year that women work for free. While equal pay has become a priority for many companies, the gap isn’t getting smaller.
According to the Institute for Women’s Policy Research (IWPR), if the pay gap continues to narrow at the same pace it has over the past 50 years, women will not reach pay parity until 2059. For women of color, this date is even further into the future: The IWPR estimates that black women will wait until 2119 for equal pay and Hispanic women will have to wait until 2224.
This is more normal than we like to acknowledge. According to SSB (Norway), this is most prominent in finance, where women earn 69% of men. According to CORE, women working full time in Norway earn 88% of men. CORE also states that 45% of the gender gap is linked to different career patterns, where men tend to occupy the best-paid positions at the top of the wage hierarchy, while women typically are more concentrated in staff.
Men also tend to be overrepresented in operational positions with profit and loss responsibilities that typically also include the largest bonuses, etc. However, 55% of the pay gap can only be explained by gender.
Similar gaps persist to a lesser or larger degree in the rest of the world. The effect of parenthood on the careers of high-achieving women relative to high-achieving men is much larger. The child earnings penalty for mothers in professions with a nonlinear wage structure, MBAs and lawyers, is around 30% 10 years after childbirth.
The steps above are in no way impossible to overcome but it requires dedication. If you can make even modest headway identifying the frictions that women and minorities may face in managing their careers, you can gain a step up on the competition.
That can help prevent other gender/ethnic pay gaps from arising down the road, boost the company's reputation, help recruit the best talent, and position all your employees to maximize their contributions. This process is ongoing and without end.
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