07 Feb 2019

The gender pay gap refers to the disparity in wages earned by women and men who participate in the labour force.

It is a very real and persistent problem that affects all countries, no matter how developed their economies may be.

The World Economic Forum’s Global Gender Gap Report 2018 states that although there have been some improvements in gender parity worldwide, at the current rate that progress is being made, East Asia and the Pacific will take a dismal 171 years to completely close the gap.

Why the gap persists in this day and age

There is an information gap on the status of wage parity in Asia. Most studies are conducted in developed countries like US and Europe, whereas markets vary tremendously across the Asian region.

In many Asian countries such as China and Vietnam, although the female labour participation rate is more than 50%, only 20% of board representatives in OECD countries are women. What do we know so far about why the gap still exists in Asia?

The first, if not most important factor for one’s earning capabilities, is an investment in education. Access to education still varies across countries in Asia. Although primary enrolment rates hover at about 90% regionally, the number for girls tends to drop off after this basic education level, especially in rural areas.

South Asia has the highest number of girls not in school in the world. The lack of education is the biggest barrier for women not being able to take on higher paying jobs.

Social norms and mindsets also perpetuate the gap. As explained by Professor Sonia Akter, Assistant Dean and Assistant Professor at the Lee Kuan Yew School of Public Policy, National University of Singapore, the discrimination often begins in childhood itself.

Parents tend to think that investing in boys has higher returns and therefore tend not to invest as much in girls. Jobs themselves are seen as masculine or feminine in nature. Higher paying industries such as engineering and technology are often seen as masculine and are therefore male-dominated.

In the workplace, women tend to be perceived as less productive because they may require time off for maternity leave and can only spend a fixed amount of time in the office if they have childcare responsibilities.

Therefore employers may hesitate to employ women, especially for high-paying jobs that generally involves leadership roles and greater responsibilities. Women are nevertheless expected to be primary caregivers even if they are working full-time, and so it is ultimately a lose-lose situation for them.

A comparison of policies across Asia

The severity of the gender wage gap varies across the region. The latest Korn Ferry Gender Pay Index shows that although women in the Asia Pacific region make on average 15% less than men, the widest pay gap can in fact be seen in mature markets such as Australia and New Zealand, where it stands at 19.3%.

In growing markets such as China and India, and fast-growing markets such as Indonesia and Vietnam, the gap stands at 14.4% and 11.5% respectively.

It should be noted here that the gender wage gap measures the average of all male salaries versus all female salaries. When comparing similar jobs where both male and female candidates have the same education and experience, the gap narrows, although it still exists.

Why is the gender wage gap more pronounced in developed markets? Singapore, for example, is one of the top countries in the world in terms of gender parity. However, when it comes to wages, the difference lies at about 18%.

This is despite the fact that the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) has provided a code for fair employment practices. The problem lies in the fact that there is no law that mandates gender equality.

In Bangladesh, on the other hand, gender stereotypes have worked to create a sort of reverse gender wage gap for low-skilled workers. The higher-paying textile and garment industries see a larger ratio of low-skilled women being employed, whereas low-skilled men tend to be employed by the construction industry.

Professor Akter explains that this is because growing up, women are taught skills such as stitching. Therefore, these jobs are seen as naturally more suitable for them. In terms of policy however, the government has undertaken efforts to create skill-based institutions, some exclusively for women, to give them more access to training and education.

Only one country in Asia made it to the top 10 in the World Economic Forum’s latest Global Gender Gap Index, namely, the Philippines. How did they achieve this? Through progressive policymaking.

There is a quota mandate for women in government jobs and gender diversity is highly encouraged in the private sector. Society as a whole provides the conditions for women to succeed in the workplace, with flexible working hours and multiple day care options being commonplace.

Closing the gap

Professor Akter believes that resolving the gender pay gap first and foremost requires governments to formulate suitable policies to create high-pay employment opportunities for women and put legislations in place to outlaw gender based discriminations at work.

Many governments may provide guidelines to ensure gender equality in the workplace, but what is really important is the implementation of mechanisms for the enforcement of these practices. Iceland has the lowest gender pay gap in the world, in large part due to the fact that it has outlawed pay inequality.

Navigating the issue can be tricky, however. As resolving the gender pay gap is a high priority today, many employers turn to quick fixes that may do more harm than good. South Asia has been in the spotlight lately as it still lags behind in gender pay equality and gender parity as a whole.

The Indian government has seemingly responded to the pressure by imposing laws that, in theory, should be more beneficial for women, such as increasing paid maternity leave from 12 weeks to 26 weeks. However, according to Professor Akter, this added economic burden to employers may make them even less inclined to hire women.

Additionally, access to education is essential. On a deeper level, we should be assessing how gender biases affect opportunities provided to students. For example, why are STEM industries male dominated? More incentives should be offered to women to participate in training or enroll in skill-based education institutions.

In the workplace itself, employers could be more mindful about issues such as childcare responsibilities. Taking a leaf out of the Philippines’ book, onsite daycare or flexible working hours could help to create an enabling environment.

Workplace safety is, of course, paramount. Especially in informal sectors such as in the garment industry in Vietnam, women often face challenges such as a lack of privacy and harassment, even on the way to work. Training could be provided to managers and supervisors to teach them how to ensure the safety of their female employees.

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Bangladesh has seen many positive changes in social indicators over the decades. Source: World Bank

Professor Akter points out that transportation is an often overlooked issue. Women have to compete for transportation, especially in bigger cities. Sexual harassment in public transport also still persists in countries such as Japan. Countries like India and Bangladesh have tried to provide better conditions by providing women-only transportation options.

There are many benefits to closing the gender wage gap. Firstly, it increases women’s participation in the labour force and boosts a country’s labour pool. Artificial Intelligence is set to become a booming industry in the near future. However, the lack of inclusion of women in AI industries reflects a missed opportunity in a sector that is lacking in skilled labour.

Closing the gender pay gap also helps to reduce poverty overall, as women are likely to be poorer. Therefore, encouraging women to participate in the labour force by reducing wage discrimination would help the economy to develop and prosper.

It is estimated that countries in the Asia Pacific region reportedly lose up to US$42 billion to US$47 billion annually due to employment barriers for women. Statistics show that closing the gap could boost Gross Domestic Product (GDP) by up to 16% for Japan, for example.

With all these reasons to close the gender pay gap, it is surprising that countries are not already racing to do so. Although the gap has closed considerably in recent years, with countries such as Bangladesh and the Philippines setting a good example, there is still much that can be done to eradicate the issue once and for all.