Equal Pay Traps

August 31, 2021 (4 min read)

In my experience, skeptics on the reality of the gender wage gap are really just attributing differences in pay to what is in fact more nuanced forms of wage discrimination and failing to recognise it as such. So in honour of Australia's upcoming Equal Pay Day, I thought I'd write a quick summary on the forms of wage discrimination, including the equal pay traps that may make it harder to spot.

Forms of wage discrimination

Within-job discrimination

Arguably the most familiar form of discrimination, within-job discrimination refers to two people in the same role being paid differently. This is often the only form of discrimination that skeptics will entertain as being real and often only in its most hilariously extreme form (ie where two individual's circumstances are practically identical in all ways but one). However, even this relatively straightforward form of discrimination has its equal pay traps.

Pay rates for jobs often depend not only on the title and scope of the work but also external "objective" criteria such as qualifications and years of experience. In can therefore be tricky to isolate decisions as being discriminatory. Research has shown that even seemingly "objective" criteria can be moulded to advantage (and disadvantage) certain groups. For example, the requirement of continued years of service when many women take time out of the workforce for caregiving responsibilities.

Allocative discrimination

Then there's allocative discrimination, which manifests itself through the sorting of different people across different levels of an organisation, different occupations, and different industries. It has been described as the "strongest explanatory factor across studies for the gender wage gap".

This sorting and segregating can happen all across the employment lifecycle. At the hiring stage, recruitment processes that rely on word of mouth or information networks can perpetuate homogenous workforces. This phenomenon seems to have only been exacerbated by hiring softwares that rely on AI that has been trained by past, homogenous, hiring patterns.

Beyond the hiring process, promotion, dismissal or transferring decisions may also feature discriminatory decision-making but may be grounded in the aforementioned so-called "objective" criteria that ultimately disadvantages women and minority groups. For example, a person's status as a part-time worker (67.6% of which are women in Australia) being used to justify their sorting into mid-level positions and passed over for promotion despite their productivity and competence.

Valuative discrimination

Finally, valuative discrimination refers to the reality that jobs done predominantly or historically by women are paid less than those filled by men. However, once again this form of discrimination can be difficult to prove. Questions of how jobs may be considered of comparable worth can (and often do) descend into unfruitful debates based on relatively subjective criteria.

Ultimately valuative and allocative discrimination are made possible by segregating the workforce. This is particularly important for Australia as it features a highly segregated workforce across gender lines. Women tend to feature disproportionately in casual or part-time work, lower-levels of employment and female-dominated industries, all of which usually pay less.

"But it's a choice!"

This segregation of the workforce, however, is often attributed to employee's 'choices'. It is often suggested that women simply choose lower-paying jobs, positions and industries.

A major contributor to these 'choices', however, is often women's disproportionate caregiving responsibilities. In 2019, factors relating to the gendered impact of children and family accounted for 39% of the gender wage gap (equivalent to the 39% arising from gender discrimination). It was also the largest monetary contributor to the wage gap at $186 million a week.

This gendered division of care has only been exacerbated with Covid-19 with most women shouldering the additional homeschooling, childcare, and household responsibilities, often adjusting their career decisions to accommodate. It is ultimately clear that a key aspect to achieving equal pay for women will be a more gender equal sharing of caregiving responsibilities.

Conclusion

Some gendered divisions of work and care may admittedly be due to individual choices. But choice is defined as the opportunity or privilege of choosing freely. To what extent were you able to make truly free choices about your work and caregiving arrangements? To what extent may that have been made possible by those around you making choices that weren't as free? And to what extent do we as a society want to continue positioning caregiving responsibilities as a justification for under-compensating someone professionally? Particularly in the midst of a pandemic that should have made undeniably clear the role that caregiving plays in our society.

If you'd like to take some action to address pay gaps in your company, the Workplace Gender Equality Agency has prepared a fantastic guide available here.