Organizational cultureRemuneration Strategy

Is the Gender Pay Gap fake news?

Is the gender pay gap fake news?

In the expansive realm of business, the ubiquitous discourse surrounding the Gender Pay Gap reverberates as if it were an indisputable reality. Is the gender pay gap fake news? Let us have an open look at it.

A burgeoning industry, coupled with an influx of academic research over the past decades, has arisen to scrutinize, assess, and rectify the ostensibly politically correct notion that women receive lesser compensation than men for equivalent work, even with analogous experience and qualifications. The internet is saturated with a plethora of research, articles, and viewpoints fervently advocating this ‘truth,’ drowning out dissenting voices, which are either silenced or derided.

The palpable outcomes of this fervor, measured in terms of narrowing the gap, are, by all accounts, negligible.

Allow us to delve into this matter with a more discerning eye.

Firstly, let’s examine the intricacies of this issue. As Bryce Covert eloquently pointed out in an article for Think Progress, “While white women experienced that 78 percent figure, Native Hawaiian and Pacific Islander women made 65 percent of what white men made in 2013, African-American women made 64 percent, American Indian and Alaska Native women made 59 percent, and Hispanic women made just 54 percent. Asian-American women are the only group doing better than white women, making 90 percent of white men’s earnings.” Granted, this data pertains to the United States, but let’s not get hung up on the gender pay gap among women.

A peculiar and seldom acknowledged assumption underpins the entire Gender Pay Gap discourse. It’s odd indeed that the pay gap is measured against (white) men, presupposing that all (white) men receive the same remuneration for equivalent work when possessing comparable experience and qualifications. In essence, it implies the absence of a pay gap among (white) men. However, in the world we are familiar with, this assumption doesn’t hold true.

Drawing from over three decades of experience as a trusted advisor to diverse client companies spanning more than fifteen countries and all continents, the wage gap between men occupying the same role with comparable experience is just as substantial as that observed among women—it is, for all intents and purposes, gender-neutral. While it’s accurate that women were not frequently at the zenith of the pay scale, they were also seldom at the nadir. The wage gap significantly diminishes in lower-paid non-managerial roles, amplifies with increasing salary levels, and widens considerably in managerial contexts—a pattern echoed in Gender Pay Gap studies.

Yet, there exists an astonishing dearth of studies or opinions addressing why and in what form the gap manifests among men—or among individuals of the same sex, color, or creed in general.

So, is it ethically justifiable to pay women less than men for identical work, given comparable experience and qualifications? Certainly not.

Is it ethically sound to remunerate men differentially for the same work, under comparable circumstances? Equally untenable.

Individuals should receive commensurate compensation for identical work if their experience and qualifications align, irrespective of their gender, color, or creed—this should be axiomatic.

A Wage Gap epitomizes a form of informed discrimination, and in many jurisdictions, laws exist to prohibit such practices.

Yet, Wage Gaps have persisted for decades. Why?

We posit that there are fundamentally two reasons. Firstly, the discourse was co-opted by an erroneous agenda—gender, diversity, and inclusion—which, despite considerable fanfare, research, and political posturing, has achieved scant progress in closing the ‘gap.’ Secondly, opacity.

The primary question posed by Gender/Ethnic Gap research, in my humble opinion, is fundamentally misguided. The issue isn’t why Gender/Ethnic Wage Gaps exist; rather, it’s why Wage Gaps exist, period.

It is simply not a gender or ethnic predicament.

Wage gaps endure largely due to the lack of salary transparency. This opacity provides hiring managers with undue latitude, allowing wage disparities to persist unchecked. Salaries and the rationale behind their allocation should be unequivocally transparent within an organization.

In our extensive experience advising clients on remuneration strategy for over thirty years, we have consistently emphasized to Top Management that a successful remuneration strategy necessitates complete transparency at all levels. Despite initial skepticism and resistance, the unequivocal success and heightened satisfaction among employees in the new remuneration environment swiftly validated our insistence on transparency as not only correct but fundamentally indispensable. This held true even in countries and cultures where this approach initially faced staunch opposition at all employment levels.

Remarkably, transparency emerged as the chief catalyst in eradicating all wage pay gaps—be they gender-related or otherwise.

Is this perspective heretical? We acknowledge that this viewpoint challenges conventional wisdom, but here we stand.

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