WMC News & Features

New UN report says women still far from pay equity

By any economic yardstick—wages, lifetime income, land, financial assets, retirement, social security, inheritance—women globally lag far behind men two decades after the world declared equality as the goal at the Fourth World Conference on Women in Beijing. Globally, women’s wages are on average 24 percent less than men’s, according to a new report released this week by UN Women. Over their lifetimes, women in Sweden and France earn 31 percent less than men; the figure is 49 percent in Germany and 75 percent in Turkey. These gaps have cascading effects across other aspects of women’s economic lives.

The basis of this differential is not education differences; according to the UN Women report, which studied 64 countries. “After accounting for gender differences in education, the size of the [adjusted] pay gap actually increased,” the report said, “indicating that rising female education has not been fully or equally rewarded in the labour market.

The differential in women’s comparative economic worth derives not from their paid labor in the marketplace but from their unpaid, unrecognized, and non-monetized labor at home. This care work obligation, which women perform 2.5 times more than men, becomes the basis of sex discrimination by employers, who assume that a female employee will leave or go part-time when children arrive, and will need flexible time when parents become elderly. Stated or not, legal or illegal, protected by equal rights in the Constitution or not, it’s the main basis of the glass ceiling and keeps women stuck in lower paid, part-time jobs—also known as the sticky floor.

International organizations have developed two different approaches to addressing this problem. Groups such as UN Women and the International Labour Organization have a right-to-equality approach. Women’s unpaid care and domestic work, according to UN Women, is “the foundation for all economic activity… contributing to overall economic development through nurturing people who are fit, productive and capable of learning and creativity. Unpaid care and domestic work produces and reproduces the labour force on a day-to-day
basis and over generations for the market.”

In 2013, the International Conference of Labour Statisticians agreed that thenceforth unpaid care and domestic work would be categorized as work.

Development and financial institutions approach the direct measurement/renumerating care work with more caution. Twenty years after Beijing, no country on a regular basis is accounting for women’s unpaid labor in its national accounts or GDP. “The invisibility of unpaid women’s work in public policy discussions underestimates women's productive contributions and ensures inadequate attention is devoted to the conditions of women's work and the well-being of women,” acknowledges Helen Clark, the first woman Administrator of the UN Development Programme, whose Human Development Report does not include it as a regular indicator.

The International Monetary Fund (IMF), which is concerned about stagnating growth rates across economies worldwide, now recognizes that low labor force participation by women slows economic growth. Some governments, motivated by declining birth rates below replacement values, are designing programs with the IMF to give families help with care work, thus encouraging and enabling women to return to the paid labor force.

Dr. Kalpana Kochar, the IMF’s Deputy Director, Asia and Pacific Department, explains the case of Japan: “In Japan, women were educated but not working. Prime Minsiter Shinzo Abe has made it his signature policy to expend public money and create support programs for women in childbearing years. Our research shows positive, measurable results of this policy, with women’s labor-force participation increasing.”

Gathering and accounting for unpaid care work is a cumbersome undertaking. Statistics Norway calculates the value added for unpaid domestic household work every 10 years with the census. “We have data for the years 1970, 1980, 1990, 2000, and 2010. In 2010 the calculation of the value-added of unpaid domestic household work was 645.8 billion Norwegian Kroner,” confirms Ingunn Sagelvmo, Senior Advisor, Division for National Accounts, Statistics Norway. Most of this work was still done by women, but the data show an increasing contribution from men since the year 2000—44 percent, up from 39 percent.

The second method for capturing the value of unpaid care work is to include an estimated amount as a child-care credit in social security or as direct compensation. Globally, only 27 percent of the world’s population is covered by a pension or social security.

A 2011 study by the US Social Security Administration reviewed EU policies, including caregiver credit programs in Sweden (the first country to offer them, starting in 1974), Germany, Norway, Switzerland, Luxembourg, Austria, and Finland. The study found that these programs have “unquestionably improve[d] pension entitlements for women.” The report cites, “almost all countries … pay for caregiver credits out of general revenues or other taxes.” In the US, this would require an expansion of Social Security, which the US Congress has resisted.

In contrast, Botswana and Bolivia have closed the gender gap in pensions by introducing universal non-contributory social pensions, funded partly through taxing the exploitation of natural resources. Brazil has set up caregiver credit programs and direct compensation for child-care as part of poverty eradication, including doubling the minimum wage, which narrowed the gender pay gap by 9 percent and increased caregiver credits.

ActionAid, a human rights advocacy group, has since 2010 been documenting unpaid work using time use diaries in Uganda, Kenya, Nepal, and Nigeria. “Our project has used this data, linking it to Ugandan public health programs,” states Ramona Vijeyarasa, International Program Manager, Women’s Rights, ActionAid International. “In Rwanda and Ghana we are quantifying in the numbers of hours, to be included in their agricultural policy. Our goal is [both] employment equality… and [making the point] that it’s a woman’s right to also have some leisure time.”

Analysts expect that if care work is accounted for, more men will help in the home, contributing to another goal of equality—balancing home responsibilities. Norway was the first country to pioneer so-called daddy quotas, where portions of non-transferable parental leave are taken on a “use-or-lose” basis.

While the benefit of recognizing care work would be most immediately felt at the lower income levels of society, the policy effects across society would be enormous.

The benefit to GDP is anywhere from 20 to 50 percent increases, depending on whether replacement or opportunity costs are used. Mexico estimates it at 21 percent. The United States child-care estimate is 20 percent, or $3.2 trillion; Australia has estimated an increase of 50 percent using opportunity cost.

Mme. Christine Lagarde, the first woman Managing Director of the IMF, calls “the labor of women at home—the hidden GDP of the world, and [I think] that it should be calculated, measured, and we should know what it is.” Speaking at a World Bank parliamentary meeting, Lagarde cautioned, however, that governments “make sure that in each and every country …. there is the option for women to either do that or something else … [what I wouldn’t want is] that by measuring accurately the hidden GDP we actually trap women in working at home, as is the tendency in some countries, under the pretext that it it’s now being measured.”

Ultimately this is an exercise in self-worth. Women must value themselves and their time enough to record it and report it. Feminist economists with women’s organizations and equality campaigns must target their research and advocacy to evaluating care work. Governments, particularly where women head the government and are finance ministers, must recognize in their national GDP and development policies that a woman’s time and work has economic value—all of which will bring us closer to the vision of equality laid out at Beijing.




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