Yesterday marked the latest Equal Pay Day in the U.S., and it was a milestone edition.
Not only was 2023 the 60th anniversary of the federal Equal Pay Act, but it was also a decade since the Equal Pay Today campaign was established. However, given the still-considerable lack of parity between men’s and women’s pay in the U.S. and further afield, was it cause for celebration?
Not quite yet, but there has been some improvement: The gender pay gap has been closed by 61%, according to the World Economic Forum’s (WEF) latest Global Gender Gap Index (GGGI), which benchmarks 146 countries. The research, published in July 2022, calculated 132 years would need to elapse to achieve parity at the current rate of progress.
While that represented a four-year improvement on the 2021 projection, the number 12 months earlier suggested the gap would have closed before the coronavirus struck. Saadia Zahidi, managing director at the Geneva-headquartered WEF, lamented a “generational loss” caused by the pandemic.
“The economic and social consequences of the pandemic and geopolitical conflict have paused progress and worsened outcomes for women and girls worldwide – and risk creating permanent scarring in the labor market,” said Zahidi.
This assessment was echoed by Andrea Derler, principal of research and value at global employee analytics and workforce platform Visier. “Progress in pay equity has come to a halt,” she said, citing her company’s 2023 State of Pay Equity report, launched on Mar. 14, which captured data comprising over 15 million U.S. employee records. “We’re seeing the first-ever decline in pay equity progress since we began tracking in 2017,” added Derler. “This decline, from $0.85 to $0.84, may not feel significant on its own, but it shows a clear halt in progress in the U.S.”
Lessons from abroad
The GGGI data revealed that Scandinavian countries lead the way, with Iceland the only economy to have closed more than 90% of the gender gap. Finland (86%), Norway (84.5%), New Zealand (84.1%), and Sweden (82.2%) complete the top five in the rankings.
The U.S. scored the highest region for improvements made last year, which equates to the number of years it will take to fully close the gap from 62 to 59 years. But the U.S. is 27th in the global list of countries which have closed the gender pay gap effectively, with the U.K. 22nd, according to the GGGI report.
What could other countries – and businesses – learn from the top-ranked nations? “Three of four of the top countries for gender equality have female prime ministers, and all have strong representation in government at 45% and above, some of the best in the world,” said London-based Aimee Treasure, marketing director at Templeton and Partners, a global tech recruitment firm.
Treasure added that the phrase “if she can see it, she can be it” rings true at the “highest levels of power and influence. Girls and women who see women in some of the most important jobs in their country can imagine themselves in positions of power and influence in their own careers and passions.
She was full of praise for Iceland, supposedly the most gender-equal country in the world, and pointed out it had a long history of leading in this area. For example, a 1975 strike demonstrated “women’s value to the labor force” and, ultimately, resulted in the country’s parliament passing laws guaranteeing equal pay the following year. More recently, in 2020, Iceland’s Equal Wage Management Standard required organizations to prove they paid both sexes equally or face a non-compliance daily fine.
Treasure said the lesson from the top-performing nations was clear: “Companies that proactively decide to listen to their female workforces and talent pipelines will be far more effective at getting the best out of them, in addition to recruiting and retaining more female talent, than companies that believe gender equity is optional.”
Room for improvement
Justin Donne, a management consultant and entrepreneur living in Nottingham, in the U.K., agreed. “Iceland has a long history of promoting gender equality, implemented policies such as paid parental leave and quotas for female representation on company boards,” he said. “Finland and Norway have also implemented similar policies and have made strides in areas such as education and healthcare access for women.”
At the other end of the scale, the bottom four ranked nations of the 146 analyzed in the GGGI were Guinea, the Democratic Republic of Congo, Chad, and Afghanistan. Donne listed the reasons for their poor performance. “Guinea has faced significant political instability, which has hindered its ability to build infrastructure and pursue sustainable economic development,” he said. It was a similar story in the Democratic Republic of Congo. “The country is rich in natural resources such as minerals and timber, but corruption and inadequate governance have prevented these resources from being managed sustainably.”
Meanwhile, Chad – an impoverished, land-locked country – is “heavily reliant on oil exports, which can create environmental problems if not regulated properly,” said Donne. Finally, Afghanistan, which the Taliban retook in 2020, “has faced decades of conflict and instability, which have left it with weak institutions and limited capacity to address environmental challenges,” he added.