India ranked 108 in the 2017 Global Gender Gap Report by the World Economic Forum. While we have had laws like the Equal Remuneration Act 1976, little has been done to bridge the Gender pay disparity in the country. According to data published by the International Labour Organisation, the labor force participation rate of Indian women is only 27.2%, while the participation rate for men goes up to 78.8%. The Monster Salary Index shows that women earn 20% less than men, who earn a gross hourly salary of rupees 231, while women are paid only rupees 184.8. The disparity, known as the gender pay gap, depicts the difference in the average hourly salaries earned by men and women.
Stems of Gender Pay Disparity in India
Pay disparity occurs when there’s a difference between the average full-time earnings of women and men. Pay inequality, on the other hand, is the difference in pay between a woman and man in the same job roles. Often, pay disparity and pay inequality are considered the same, however, it cannot be interchanged. While the pay disparity specifies the overall pay gap of the total women workforce in an organization in comparison to men; pay inequality compares the pay package of women and men in the same job. Gender pay disparity in India is not illegal; nevertheless, it could possibly lean towards discrimination towards employing female workforce.
Recent results of an Observer Research Foundation study, conducted using the Oaxaca-Blinder decomposition (a popular method since 1973 to measure income differences between groups), shows a huge gender pay gap in India. The explained gaps in pay disparity are due to different personal circumstances, childcare, marital status, career choices, and education. However, the research proves that over half of this gap is unexplained. This unexplained gap sparks an important concern, where, women workforce are considered inferior to men leading to disparity in economic opportunities.
Statistics show that the gender pay gap differs among states in India due to the patriarchal mindsets, which limits opportunities for women, especially in tier 2 and 3 cities. A report by Payscale.in shows that the pay gap is the highest in Assam with a 64% difference, followed by Rajasthan with a 59% difference. While the gap is relatively low in the southern part of India, the lowest gap can be seen in the Capital city, with a 20% difference followed by other metro cities. The Monster Survey went on to say that there is a need for pragmatic policies to bridge the pay gap because only 10% of the organizations in India have a robust gender diversity programme. For instance, in the UK, companies with more than 250 employees are expected to report the details of their gender pay disparity on their websites, apart from furnishing these details to the government. A similar legislative can be seen in Iceland, which was the first country to make it illegal to pay women less than men. This was a landmark move because law enforces equal pay standards - Here, the employee doesn’t have to prove that she was discriminated against, but the burden directly falls on the companies to prove that they pay policy are unbiased. Sadly, such women empowering laws are lacking in India.
Over the years we have seen some dynamic women like Indra Nooyi & Roshni Nadar Malhotra (amongst others), who have become powerful global players. Despite their success, women are not immediately accepted in leadership positions, due to the stigma and prejudices existing in the society. With these odds, it’s impossible for the country to become developed without empowering its population.
Discrimination in Hiring
At the end of the day, law enforcement and government-sponsored employment is not a sustainable option to bridge the gap and bring economic equity. Companies must take the lead along with the government to form transparent pay structures and policies to combat the issue. A recent World Bank report shows that six in every ten jobs openings prefer male candidates and that women are preferred for low-pay and informal jobs in India. The report also shows a higher demand for men in advanced positions and in leadership roles. Such patriarchal mindsets have to change, especially in the technology sector. For instance, a NASSCOM study reveals that women in technology are perceived as less capable than their male counterparts. Such contrasts in perception must change, and it’s indeed the responsibility of all employers in India to reduce the incidence of social discrimination of women when it comes to their employment opportunities.
The World Bank report also shows that women are preferred over men in domestic, teaching and BPO jobs. But such women-dominated sectors attract very low-pay and income growth opportunities. We need more sustainable business models where women can secure attractive pay packages. For instance, while private and international schools have started offering better pay packages for teaching positions, the same cannot be said for the public schools in India.
Lack of Workplace Flexibility
One core reason for pay difference in India is the tendency for women to move out of work due to stringent company policies that are insensitive to women’s responsibilities outside of work. Several women in India are forced to opt out of work or to take long career breaks due to domestic responsibilities. This impacts their career progression and opportunities.
Data collected by the International Labour Organisation shows that Indian women with children are unable to find affordable child-care avenues. Such circumstances make it difficult for them to balance work. In general, several women feel that a majority of workplaces in India are not pro-women. A TJinsites study conducted in 2017 shows that 70% of the female employees in India feel that their workplace is not female friendly, leading them to quit their jobs or shift to less demanding profiles.
Organisations don’t realize that gender parity is not about having more female employees, but ensuring that women who are tied with domestic responsibilities require more flexibility in performing their duties. Women cannot merely emulate a man’s way of working when the prevailing workplace policies are not supportive. For instance, in several countries like Finland, Norway and the U.S., among others have well-defined paternal leave policies. Such conventions in India will help distribute the domestic burden that women face, ensuring that they don’t quit working due to added family responsibilities. Some companies like HCL and SAP have provided day-care facilities and flexible work hours making it convenient for young mothers to continue their professional responsibilities.
With all this, it is clear that pay scale gaps have to be addressed across multiple fronts – right from greater formalization in creating better job opportunities and pay scales for women, to streamlining laws and changing societal attitudes within the country.