India Suffers from Huge Gender Pay GapAnisha Mukhija
Recently released Global Wage Report 2016-17 released by the International Labor Organization (ILO) has found that India suffers from huge gender pay gap. It shows that India has among the worst levels of gender wage disparity (men earning more than women in similar jobs) with the gap exceeding 30%.
India’s position: In India, women formed 60% of the lowest paid wage labor, but only 15% of the highest wage-earners. It means that women are not only poorly represented in the top bracket of wage-earners but also gender pay gap at the bottom is also very wide in India. In other words, not only were women paid less, there were fewer women in highly paid occupations.
Regional wage disparity: The share of women among wage earners was among the lowest in South Asia. Compared to a global average of 40%, and an Asia-Pacific average of 38%, in South Asia (whose dominant economy is India), only 20% of wage earners were women. Reasons for wage gap: Women’s educational choices produced occupational segregation. Care work mostly undertaken by women is undervalued because it may be seen as a natural female attribute rather than a skill to be acquired. Thus, there is higher representation of women in sectors where their work is undervalued results in a gender pay gap.
Way Forward: Strong labour market institutions and policies such as collective bargaining and minimum wages will help to lower the pay gap. It is found that the gender pay gap is smallest (around 8%) in the group of countries where the collective bargaining rate is at least 80%, and widest in countries with weak collective bargaining and very low or no minimum wages.
Delving into the reasons for the wage gap: the report noted that typically, women’s educational choices produced occupational segregation. For instance, since the majority of those who studied nursing were women, “this profession is over-represented among women”. At the same time, care work is undervalued because it may be seen as a natural female attribute rather than a skill to be acquired. Thus, a higher representation of women in sectors where their work is undervalued results in a gender pay gap.
The ILO threw light on high income inequality. In India, the top one per cent earned 33 times what the bottom 10 per cent did. The top 10 per cent also earned 43 per cent of all wages. Since 2006, average wages rose by 60 per cent in India.