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The Pay Gap – Why Does It Still Exist?

Disparity in pay is present between people of equal skill levels. It is usually due to them having a characteristic such as their gender or disability. However, these people are contributing just as much as their counterparts – so why does the pay gap still exist?

Why does the pay gap exist?

Explaining why there is wage disparity is quite complex. The difference in pay can result from many issues. For example, in the case of the gender pay gap, it can be due to women not as often being hired or promoted in male-dominated fields. As such their average pay can be lower. There can be a cultural conception that women should not go into these fields. Therefore, they may be more frequently nudged away from pursuing them and may lose out on education opportunities due to this. Because of that they may end up being less qualified.

A study by the US National Science Foundation in 2017 showed that, in higher-paying fields such as computer science or mathematics, men accounted for about 75% of doctoral degrees. Where women were expected to earn $99,000, men were expected to earn $113,000.

What are the effects?

Wage disparity over a long period can lead to poverty.

“A study of transgender adults in the United States found that participants were nearly 4 times more likely to have a household income of less than $10,000 per year compared to the general population.”

American Psychological Association

People facing multiple points of discrimination can lose out even more. According to TUC, where men without disabilities earned the most, the lowest median earners were disabled women.

This can often lead into a cycle of poverty, where children suffer for the discrimination of their parents and may lead into them facing discrimination in the future. Those in visible poverty are significantly less likely to be hired than those able to afford to look clean and presentable, trapping them in another cycle of poverty.

Why is it important to close the pay gap?

Within a company, disparity in pay can cause low morale and lower performance, as well as loss of employees. It also reduces diversity in higher-paying staff positions. It is in a company’s benefit to equal out pay disparity and offer people what they deserve for the work they’re doing.

For society, the pay gap drags down the economy as a whole. Families who rely on a breadwinner who is underpaid will steadily fall to poverty. The International Labour Organisation estimates that “women’s global labour force participation rate is 26.5 percentage points below that of men”. Closing the pay gap will allow more people with discriminated characteristics to enter the employment market. This boosts the economy.

Diversiti UK offers courses to help you and your company understand the benefits of diversity in the workplace. This includes our Inclusive Recruitment course, to teach you how to apply inclusivity during the recruitment process.