Equal pay to be realised after 2277 at present rate

15 January 2020 Consultancy.uk 4 min. read

An damning new report from the World Economic Forum has warned that the gender pay gap will not be closed for more than two centuries, if the present rate of progress does not improve. More alarmingly, the findings suggest that the world has actually taken a step backward on the matter, with the same research predicting last year that the gap could close an also-unimpressive 55 years earlier.

The world is approaching a worrying juncture in human history. Brexit threatens to leave the UK and Europe bickering over trade rules throughout the coming decade, while the global economy is flirting with a seemingly inevitable recession; recent US military actions seem to be pushing the world toward a cataclysmic conflict in the Middle East; and to top it all climate change has led Australia to be hit by its worst wildfires on record.

Presuming that somehow the status quo is able to limp on through these systemic catastrophes, however, the World Economic Forum (WEF) has yet more worrying news to digest: the gender pay gap could take the best part of three centuries to close. In its annual report on gender equality, the WEF found that worldwide, the average woman’s annual income is $11,500, versus $21,500 for a man, leading it to the harrowing conclusion that if attempts to address the gaps in pay between men and women continue to progress at their present rate, nobody alive today will be around to benefit from it.

The Global Gender Gap Index Ranking, 2020

Despite a mounting horde of reports and benchmarks also stating that pay equality would be a huge boon to the global economy, the Global Gender Gap Report 2020 actually found that society had regressed on the matter over the last year. The forecast now reads that men and women will have pay equality in 257 years, a rise of 55 years on last year’s estimate.

Even among outlying nations which have progressed faster than average, there were a number of negative changes this year. According to the WEF, four of the top ten countries for the gender gap – Sweden, Nicaragua, New Zealand and Rwanda – saw negative improvement on the matter. This is largely because even in nations where making an improvement on this front has been prioritised, a lack of access to capital, land or financial products prevent women from making a living.

This was illustrated late in 2019, when research from Boston Consulting Group found that while the number of UK female-founded start-ups had doubled over the last decade, a colossal funding gap means that male-founded businesses still outnumber them by nearly ten-to-one. At the same time, when female-founded start-ups do receive investment, it is on almost one-third less than the amount received by their male-founded counterparts.

Percent of women in companies’ board

Another reason the world seems to be taking a step backward is that much of the focus on closing the pay gap has been devoted to getting more women in senior roles. In the UK for example, when the Big Four professional services firms have been asked to explain their lack of progress on closing the pay gap, their excuse has been that fewer women are in top jobs at their firm, and so women earn less. Over a fifth of UK board directors are women as a result of prioritising this. However, while the WEF found a 2% increase in the number of women in senior roles, it says women’s participation in the labour market is stalling.

Currently, only 55% of adult women are in the labour market, compared to 78% of men. Meanwhile, more than 40% of the wage gap and 50% of the income gap still need to be closed. There are many factors behind the disparity in earnings and career opportunities. They include women choosing lower-paid occupations, working part-time, the “motherhood penalty,” doing most of the childcare and household chores and, not least, discrimination and bias.

Despite the perceived lack of material progress on the matter, however, Klaus Schwab, Founder and Executive Chairman of the World Economic Forum championed a market solution, stating, "Supporting gender parity is critical to ensuring strong, cohesive and resilient societies around the world. For business, too, diversity will be an essential element to demonstrate that stakeholder capitalism is the guiding principle. This is why the World Economic Forum is working with business and government stakeholders to accelerate efforts to close the gender gap.”