Wage Inequality Research Paper

Wage Inequality

The wage gap measures the differences between women’s wages and men’s wages in paid employment in the labor market. It is one of many indicators of gender inequality in a country. The International Labor Organization (ILO) published the study “Global Employment Trends for Women” in 2009, which provides current information about the global wage gap. The assumptions in this study about a decline or increase in the pay gap between women and men depend on the data available and are different between the fields of study and country-specific wage and salary administration. The International Labor Organization identifies the gender pay gap as a globally persistent phenomenon: “Throughout most regions and many occupations, women are paid less money than men for the same job. In a majority of countries, women's wages represent between seventy and ninety per cent of men's wages, with even lower ratios in some Asian and Latin American countries.” (“Global Employment”). I will be addressing the gap in wages only in the United States, not worldwide. The gap in wages in the United States is very persistent and has only declined slightly (“Global Employment”). The history of the gender wage gap, occupational segregation, and gender bias explain where the wage gap has come from and why it is still a persistent issue today.

Awareness for and reformation of the gender wage gap began with The Equal Pay Act of 1963, which was signed by President John F. Kennedy as a part of his “New Frontier” programs. When this law was passed, women were only earning about fifty-nine cents for every dollar that a man earned. Congress passed this law in order to narrow the pay gap, but it mainly focused on the differences between wages between women and men who were doing the same job. It aimed to target the problem of employment discrimination. The Equal Pay Act states that women are entitled to compensation if they receive disparate pay for equal work (Siniscalco, Gary).

The Title VII of the Civils Rights Act of 1964 was passed soon after Congress passed the Equal Pay Act. This act provides more protection against wage discrimination. It prohibits sex discrimination in hiring, promotion, or “with respect to the compensation, terms, conditions, and privileges of employment” (Dworkin, Terry Morehead). This act has a better impact on the wage discrimination because it does not solely focus on equal pay for equal work. Executive Order 11246 also pertains to the wage gap (Anderson, Bernard E.). This order requires contractors to make sure that equal employment opportunities are offered and establishes strict guidelines for the records that must be kept for the actions taken in employment.

After a considerable rise in women's wages during the 1980s, the gain decreased in the 1990s. The 2000s were very up and down. This means that policies and positive measures to enhance pay equity are greatly needed. In order to determine which policies are needed, reasons for the gender pay gap need to be explored.

President Barack Obama promised to further reduce the wage gap between men and women when he ran for re-election in two-thousand and eight. In 2009, Obama signed the Lilly Ledbetter Fait Pay Act, which amended Title VII. In June of two-thousand and thirteen, the White House issued the report “Fifty Years After the Equal Pay Act.” This report provides an overview of the issues of the wage gap and pay bias (Siniscalco, Gary).

Over the past fifty-three years, women have seen a lot of progress, including the shrink in the wage gap today. Women are now earning roughly eighty cents for every man’s dollar. Results from the Panel Study of Income Dynamics (PSID), show that education attainment at the top of the wage distribution are a main factor in the decrease in the wage gap over the years. Work history changes are also a significant part of the change at the bottom of the wage distribution (Kassenboehmer, Sonja C., and Mathias G. Sinning).

Occupational gender segregation is delicate to address with specific actions. According to the International Labor Organization, women represent about forty percent of the worldwide workforce. However, that does not reflect the results when investigating occupational groups within the various sectors: forty-six percent of employed women work in the services sector, thirty-five percent in the agricultural sector and only eighteen percent in the industrial sector (“Global Employment”). Unfortunately, the main fields in which female employees are the most common are also the lower paying occupations. These primarily female fields include secretaries, teachers and nurses. Even within these jobs they are paid less than their male colleagues. Direct discrimination takes place when people who have the same level of education and work experience are treated differently because of their gender. In other words, it means that there are different pay levels for the same work or different job requirements for the same pay level.

There are two main facts to support why women are discriminated against. The first is that a woman’s primary responsibility is for unpaid services such as taking care of children, education and basic family services. So, this seems to place them in similar working areas within the labor market. Some researchers explain the differences in occupations between women and men by using the selection effect. The selection effect states two