Latin America’s Persisting Gender Wage Gap

By  |  16 / September / 2015

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genderAMERICAS PROGRAM SPECIAL REPORT

In Latin America and the Caribbean, high levels of gender inequality persist in social and economic structures. Labor markets present substantial differences in remunerations between men and women, in a context of extremely high levels of employment in the informal economy.

Many statistics describe the systematic inequality in Latin America and the Caribbean. Women have been affected by the growing tendency in the region toward precarious, informal employment, where they receive even less income than men, in both formal and informal employment sectors.

The International Labor Organization (ILO) report The Global Wage Report 2014/15: Wages and Income Inequality, published on International Women’s Day, March 8 2015, notes that inequality between men and women continues to be the common denominator in most of the 130 countries and territories of the world analyzed in the report.

The ILO finds that the gender pay gap for the Latin America and the Caribbean region is 19%. This compares to an average of 24% globally and ranks ahead of nations in the so-called “Developed Regions” (23%). The Middle East and North Africa is the only region reporting a lower overall gender pay gap, at 14% for formal sector jobs. Although the global economic crisis reduced this gap with respect to previous years, the ILO cautions that this statistic is deceptive, since worldwide salary growth decelerated in 2013 compared to 2012, and still has yet to reach pre-crisis levels. To put it another way, the gap is less today because men are earning less, not because women are earning more compared to men.

The ILO report emphasizes the increased percentage of women in the work force, closely linked to increase in schooling—principally primary, technical or higher education. A similar increase was not observed for men, although they maintained their presence in the labor market.

Informal jobs, poorly paid and invisible

Despite its higher global standing, the income gap between women and men in Latin America and the Caribbean continues to be a complex and intransigent problem, reflecting global trends. In general, women’s participation in the labor market has increased, particularly within the last 15 years. This development has resulted in major social changes and improving economic conditions in the region.

Between 2003 and 2013, participation in the workforce by women between the ages of 25 and 65 increased by 4.5 percentage points, making women the only group whose rates of participation increased across all skill levels, according to Working to End Poverty in Latin America and the Caribbean Workers, Jobs, and Wages, a World Bank study.

Another World Bank report, The Effect of Women’s Economic Power in Latin America and the Caribbean states that without this increase of women in the workforce, extreme poverty in the region would have been 30% higher and the effects of the 2007-2008 financial crisis even more severe. It found that households relying only on a male income were more vulnerable than those where both men and women were working.

Despite their greater participation in the labor force, the World Bank notes that employers continue to apply discriminatory criteria. Moreover, a higher proportion of women work in the informal economy. These two facts explain in large part the fact that men earn more in today’s economies.

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In Latin America and the Caribbean, 59% of employed women work in the informal sector, and 17% in paid domestic work

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The discrimination is measures in the existence of severe gender inequality that goes beyond the wage gap. The World Economic Forum’s Global Gender Gap Report 2014 reveals that there is only one nation from Latin America and the Caribbean, Nicaragua, that is among the top ten nations on its gender parity index. This index—based on a complex analysis of economic, political, education and health-based criteria—shows Nicaragua at sixth in the world. It is considered the region’s gender parity leader “due to strong performance in health, education and political gaps.” However, it still lags in gender wage gap.

According to the ILO, the worst results for the gender wage gap in the region are found in Argentina (27%), with Brazil at 24%, Peru, 23%, and Mexico 22%.

Why does the wage gap persist?

An important reason for the persistent gender gap has to do with where women work. The UN report “Progress of the World’s Women 2015-2016: Transforming economies, realizing rights” finds that 59% of women in Latin America and the Caribbean are employed in the informal economy and that domestic work—which is generally poorly paid—represents 17% of female employment.

“Women continue to be concentrated in a few occupations that are poorly paid and socially undervalued: education, health or social services. An example is domestic work, 90% of which is performed by women,” stated María Elena Valenzuela, an ILO expert in gender and employment. Valenzuela also maintains that the root of the problem is cultural. “Latin American societies place less value on activities carried out by women, even though they head up a third of all households.”

This report points out that globally women spend between two and up to five times more time as men do on household work and family care—“invisible work,” which, according to UN studies and reports, represents 20% of the Gross Domestic Product (GDP) in Mexico. For an idea of what this statistic means, it is enough to compare it with manufacturing, which represents 16% of Mexico’s GDP.

In Latin America and the Caribbean, one of every three women has no income of her own. The amount of time that women spend on unpaid household labor is at least twice the amount of time that men contribute to unpaid household labor and in Brazil, Costa Rica and Ecuador the difference is up to four times greater.

According to a 2014 report from the Economic Commission for Latin America and the Caribbean (ECLAC), 51.6% of women state that their lack of paid employment is linked to their household and family care responsibilities.

Gender discrimination in the labor market is a global problem that has been part of society for centuries, and studied by all manner of international organizations for decades. Even in situations of identical training and experience and despite the fact that there is no objective reason for two people performing the same job with the same qualifications and experience to earn different salaries, men consistently earn more than women. According to the above-mentioned reports, the problem persists, and efforts to correct it—much less eradicate it—have not produced significant results.

The ILO says that at this slow rate of progress we would not attain wage parity until the year 2086.

Measuring the gap

The gender pay gap is the difference between men’s and women’s pay, based on the average difference in gross hourly earnings of all employees. In contrast, equal remuneration is achieved when men and women receive equal pay for work of equal value.

To compare male and female wages it is necessary to consider similar situations with respect to labor variables (such as hours or duration of the workday, occupation, type of contract [permanent or temporary], etc.) that play an important role in determining wages. To analyze pay, especially in the case of part-time employees, hourly pay rate must be considered.

There is a complex and often interrelated set of factors causing wage differentials between men and women. In addition to evaluating skills, labor market segregation—the concentration of men and women in different economic sectors—must be considered, along with characteristics of the female labor supply, participation in part-time work, and established pay mechanisms.

Both public and private sector leaders condemn the gender wage gap and recognize the enormous gender inequality that exists between the sexes in their discourse. But there are few effective measures to eliminate it.

Political leaders across the globe advocate for equal pay and opportunities for men and women. Gender equality and the empowerment of women are included in the United Nations Millennium Development goals, which state the need to “promote gender equality and empowerment of women as effective ways to combat poverty, hunger and disease and to stimulate development that is truly sustainable.”

Gender equality is firmly implanted in the development agenda. Even the Vatican has publicly condemned the gender wage gap. During a recent act in which he referred to the state of marriage in modern society, Pope Francis publicly spoke out in favor of equal pay for men and women. He described the current gender gap as “pure scandal,” and added that work must be done to close the gender wage gap so that men and women receive equal pay for equal work.

“Why is it taken for granted that women must earn less than men?” the Pope asked in his speech. “No!”, he declared, “They have the same rights, therefore, the Christian seed of radical equality between spouses must bring new fruits in our time.”

“Reality is much less hopeful”

Legal initiatives, future commitments, accords, and even denunciations from the spiritual realm … the list of voices demanding an end to this situation is interminable. Undeniably, advances have been made with respect to national gender equality policies and laws that punish discrimination based on sex. Nevertheless, equality is still far off. Behind the statistics and studies is the matter of culture, where discrimination remains very much alive, representing the role of women in society through an underlying set of stereotypes, social imperatives and concepts since time immemorial.

This reality is confirmed by the 2014 ECLAC study cited above that notes that 47.7% of women in the region who have paid work are employed in low-productivity jobs that offer little social protection. According to the report, female participation in the workforce has increased to 49.8% yet one of every three women in the region has no income of her own.

“This heavy load of unpaid work prevents women from participating in decision-making, advancing their careers and taking advantage of professional opportunities, which in turn reduces their income and prospects for access to social protection,” the study points out.

Currently women own and manage more than 30% of all businesses in the world, but these tend to be micro and small businesses. Women represent 19% of members of boards of directors and less than 5% of heads of firms. Only 5% of the companies on the Fortune 500 list are led by women, and just one of every 12 governments in the world is led by a woman. The ILO found that women face an unemployment rate 30% higher than that of men.

According to ILO studies, at the global level approximately 50% of women are incorporated into the labor force, while the percentage for men is about 80%, a reality that has remained practically unchanged for the last 20 years.

Increasingly, both men and women are breadwinners in the family; however, men don’t assume a corresponding increase or redistribution of household work. This implies a significant overload or added burden and contributes to tension between work and family life. Although current economic structures have fostered the incorporation of women in the labor force, the imposition of certain social models is so strong that the majority of domestic chores or family care continues to fall on women’s shoulders.

The ILO adds in its report that the gender wage gap is reduced if the working mother has daughters rather than sons. Girls help more in the home, which allows the mother to work more hours. But the burden of domestic work that falls on girls is also discriminatory and can have a negative effect on their schooling. The wage gap for mothers increases in relation to the number of children she has and their ages– the more children she has, the lower the wages she earns and the greater the time needed to reenter the workforce increases.

This scenario is not exactly encouraging. Therefore the institutions warn that the road to equality is long.

“The overriding conclusion 20 years on from Beijing is that despite marginal progress, we have years, even decades to go until women enjoy the same rights and benefits as men at work,” said Shauna Olney, Chief of the Gender, Equality and Diversity Branch of the ILO during the presentation of its most recent report.

On a hopeful note, Saadia Zahidi, head of Employment and Gender Initiatives at the World Economic Forum, explains that much of the progress in gender equality has come from an increased number of women entering politics and the workforce.

“While more women and more men have joined the workforce over the last decade, more women than men entered the labor force in 49 countries. And in the case of politics, globally, there are now 26% more female parliamentarians and 50% more female ministers than nine years ago,” said Zahidi. She added, “These are far-reaching changes – for economies and national cultures. However it is clear that much work still remains to be done, and that the pace of change must in some areas be accelerated.”

The fact is that currently no country in the world has completely closed the gender gap. Although gaps in education, health and mortality have narrowed—and in many nations reached equity—economic and political gender gaps are still very large. And at the current rate of “improvement,” it will be almost a century before we can say that pay equity exists between men and women and do away once and for all with this anachronism.

Bibliography:

Progress of the World’s Women 2015-2016: Transforming economies, realizing rights. United Nations.

The Effect of Women’s Economic Power in Latin America and the Caribbean. World Bank.

The millennium development goals: a Latin American and Caribbean perspective. Economic Commission for Latin America and the Caribbean.

Labour Overview. Latin America and The Caribbean. International Labor Organization.

Global Wage Report 2014-2015. International Labor Organization

The Global Gender Gap Report 2014. World Economic Forum.

Regional review and appraisal of implementation of the Beijing Declarationand Platform for Action and the outcome of the twenty-third special sessionof the General Assembly (2000) in Latin American and Caribbean countries United Nations – ECLAC.

Working to End Poverty in Latin America and the Caribbean–Workers, Jobs, and Wages: LAC Poverty and Labor Brief, June 2015

José Luis Alcaide is a journalist specializing in environmental communication and an international advisor on environmental and social issues. He is a regular contributor to the Americas Program at www.americas.org 

Translation by Barbara Belejack

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