Global Wage Report 2018/19: What lies behind gender pay gaps, Published by International Labour Organization, 2018, Pages: 172, ISBN: 978-92-2-031347-3 (web pdf)
Across the world, gender pay gaps indicate one of today’s greatest social injustices, which continue to be a major obstacle to achieving a better and more sustainable future for all. Much has been written on this topic as well as a huge amount of research has also been done to explore the reasons why men continue to be paid more than women across the world. The ILO publication “Global Wage Report 2018/19” examines the evolution of real wages around the world, giving a unique picture of wage trends globally and by region. It provides a detailed analysis of gender pay inequalities so as to better understand the gender pay gap as a form of unacceptable inequality in the world of work. The report focuses on two main challenges: 1) how to find the most useful means for measurement, and 2) how to break down the gender pay gap in ways that best inform policy-makers and social partners of the factors that underlie it. The report also includes a review of key policy issues regarding wages and the reduction of gender pay gaps in different national circumstances.
The Global Wage Report is divided into three main parts. Part I sheds light on major trends in wages. By providing comparative data and information on recent global and regional wage trends, it shows that global wage growth in 2017 was not only lower than in 2016, but fell to its lowest growth rate since 2008, remaining far below the levels observed before the global financial crisis. Global wage growth in real terms (adjusted for price inflation) has declined from 2.4 per cent in 2016 to just 1.8 per cent in 2017. If China, whose large population and rapid wage growth significantly influence the global average, is excluded, global wage growth in real terms fell from 1.8 per cent in 2016 to 1.1 per cent in 2017. In the advanced G20 countries, real wage growth declined from 1.7 per cent in 2015 to 0.9 per cent in 2016 and 0.4 per cent in 2017. In Europe (excluding Eastern Europe), real wage growth declined from 1.6 per cent in 2015 to 1.3 per cent in 2016 and further declined to about zero in 2017. Real wage growth in the United States declined from 2.2 per cent in 2015 to 0.7 per cent in both 2016 and 2017.
In emerging and developing countries of the G20, real wage growth has fluctuated in recent years, rising from 2.9 per cent in 2015 to 4.9 per cent in 2016, and then falling back to 4.3 per cent in 2017. For example, workers in Asia and the Pacific have enjoyed the highest real wage growth among all regions over the period 2006–17. However, even here wage growth in 2017 was lower than in 2016, falling from 4.8 per cent in 2016 to 3.5 per cent in 2017. Wage growth lags behind productivity growth in high-income countries. Looking at trends in average wages and labour productivity over the period 1999–2017 in 52 high-income countries, the report finds that, on average, labour productivity has increased more rapidly (by a total of 17 per cent) than real wages (13 per cent), although the gap between the two trends narrowed between 2015 and 2017.
The second part of the report provides a global analysis of the gender pay gap. First, it presents a critical assessment of the standard measures commonly used to estimate gender pay gaps that can be a useful tool for the purposes of policy-making and for monitoring the evolution of the gender pay gap. The two measures that are most commonly used are the “mean gender pay gap” and the “median gender pay gap”; the latter compares the value located in the middle of the women’s wage distribution with the value located in the middle of the men’s wage distribution. Second, the report analyses and breaks down gender pay gaps to better understand what lies behind this figure. The evidence indicates that, in fact, much of the gender pay gap cannot be explained by any of the objective labour market characteristics that usually underlie the determination of wages. In high-income countries, for example, almost all of the gender pay gap remains unexplained.
So what could then be the factors that lie behind the gender pay gap? Although there are large variations across countries, the report finds that, on average, education and other labour market attributes explain relatively little of the gender pay gap at different points of the wage distribution. However, occupational segregation as well as the polarization by gender of industries and economic sectors stand out as main factors. Women continue to be under-represented in traditionally male-occupied categories and within similar categories women are consistently paid below men, even if women’s educational attainments are just as good as or better than those of men in similar occupations.
Part III of the report recommends a number of policy measures to progressively reduce gender pay gaps across the world. It emphasizes the importance of good data and highlights the need in many countries for better data on the distribution of wages.
The report also recommends going beyond summary measures to inspect in more detail the respective wage structures of women and men, and calculate factor-weighted gender pay gaps which control for some of the major composition effects.
The report finds that in many countries the largest part of the gender pay gap is unexplained by differences in attributes and characteristics of women and men. Countries should also look into possible ways to address the undervaluing of women’s work in highly feminized occupations and industries, including by raising wages in the latter. To reduce the motherhood pay gap more equitable sharing of family duties between women and men, as well as adequate childcare and eldercare services, would in many instances lead to women making different occupational choices.
In addition to the specific measures discussed above, the report sets out a few more general considerations. First, accelerating progress will require both political commitment and social transformation. Second, comprehensive, cross-cutting approaches to gender equality are necessary to combat the gender pay gap. Third, the appropriate mix of policies in any national context largely depends on that particular country’s circumstances, and that robust analytical work is needed to identify the largest contributory factors – and hence the most effective remedies – in different country contexts.
The writer is an independent researcher.