Why do we need equal pay?

 Equal pay for work of equal value is an internationally recognised fundamental right, rooted in the ILO Convention 100(1951) on Equal Remuneration, which focuses on gender discrimination in employment and sets out that signatories must promote and ensure equal remuneration for men and women workers for work of equal value. The key role of equal pay in fostering gender equality, dignity, fairness, respect and recognition for the work of women, has been prioritised by the UN 2030 Agenda on Sustainable Development. SDG 8 on inclusive growth, full employment and decentwork enshrines equal pay among its targets, underscoring that an equitable and inclusive world of work is a precondition to genderequality and societal progress overall (SDG 5)

Measuring progress in closing gender pay gaps is essential to address pay discrimination wherever it happens and to foster the implementation of the SDGs. Unfortunately, the lack of comparable disaggregated data by gender, race, disability and migration status and other characteristics among countries on gender pay gap means there is an absence of vital statistical evidence upon which calls for meaningful policy change could be based. 

Governments and international institutions must improve the availability and the comparability of statistical data (especially for less-developed countries) to ensure a more comprehensive, robust and precise analysis of progress made. Ultimately, producing and measuring data is a question of political choice that directly affects global policy responses and governance. Therefore, the work of international alliances like the Equal Pay International Coalition (EPIC), which provides support to improve legislation, build capacity and strengthen monitoring and enforcement mechanisms to accelerate progress towards equal pay, is crucial in global efforts to close the gender wage gap.

 

Despite global commitments to reduce the gender pay gap, pay differences between women and men remain a structural problem in both low- and high-income countries alike. Large and persisting gender pay gaps place women at greater risk of poverty, during their working lives and beyond. Women’s lower pay, combined with their greater concentration in part-time, informal and precarious work as well as lower labour market participation, leads Despite global commitments to reduce the gender pay gap, pay differences between women and men remain a structural problem in both low- and high-income countries alike.Large and persisting gender pay gaps place women at greater risk of poverty, during their working lives and beyond. Women’s lower pay, combined with their greater concentration in part-time, informal and precarious work as well as lower labour market participation, leads to their higher risk of experiencing poverty. It also contributes to their lower social security contributions, and in turn inadequate or even inexistent social security entitlements, leaving them especially vulnerable in old age. In the EU alone, women’s pensions are on average around 30 per cent lower than men’s. 

Reducing the gender pay gap can have a strong benefit in terms of improving economic security for women and reducing their risk of poverty. In the case of the United States, for instance, a 2021 study by the Institute for Women’s Policy Research found that if working women received equal pay with comparable men, poverty for working women would be reduced by more than 40%. The research also found that reducing these gaps could have broader positive effects on the economy as a whole. Ensuring equal pay for working women would also increase their annual average earnings from US$41,402 to US$48,326, adding US$541 billion in wage and salary income to the US economy. Similarly, according to the European Institutefor Gender Equality (EIGE), increasing women’s participation in the workforce and closing the pay gap between women and men would have a positive impact on economic growth in the EU. Despite recent improvements, there are still persistent gender gaps in labour market activity and pay, which result in lower employment rates for women, potentially limiting EU growth. EIGE’s data shows that while closing the wage gap would have a rather small effect on the GDP, with a 0-0.2% increase in GDP per capita over the 2030-2050 period on the one hand, higher wages encourage more women to enter the labour market, leading to an increase in the productive capacity of the economy and therefore increased employment.

Therefore, closing pay gaps means lower poverty rates overall, optimisation of social assistance spending and more dynamic societies.