The Increasing Gender Pay Gap in India – it is time for action!
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My childhood stands out as a strange paradox. On the one hand, I was provided the best environment to grow and flourish, and on the other hand, I was exposed to several naked and harsh truths of Indian society. My parents would try to explain and rationalise these dogmas – some were plausible; others I would nod myself into believing. However, there was this one not so obvious truth that just jumped out at me – to start with by accident, but it was my curiosity that drove me to probe further.
My parents are equally qualified chartered public accountants. Their first pay checks were very precious to them and that is a story they use to reminisce about to me. I sub-consciously realised that in this beautiful story of theirs, an alarming fact was hidden – my mother, despite the same qualification and working at the same level as my father, was earning a lower salary. This was jarring and my mind was piqued. As their jobs changed, so did their salaries, but the gap just grew wider.
I began researching this hapless situation - the latest Monster Study Index in India showed that women earn 20 % less than men and India ranked lowest amongst the BRIC Economies in gender pay parity. The more I read, the steelier would be my resolve. I was just not prepared to accept the common stereotype that women are intellectually inferior to men. When I looked at the pay gap in the informal sector, such as the men and women who work in our homes and around us, the gap was mind numbing.
On January 1, 2018, when Iceland became the first country to make it illegal to have a gender pay gap, a spark was ignited in me to formally question the disparity in India. In my opinion, the only way a difference can be made is through regulation and not through voluntary action alone.
The situation in India is grave and needs urgent attention. Despite these legal provisions, the awareness on this issue is dismally low, and the results are for all of us to see. In fact, the outcomes will be stark in the unorganised sector. We do not need more laws. We need awareness of the issue and it is that awareness that will enable action. Creating a public debate is the most effective way to spread awareness and drive action.
In light of the above successes, and the imperative need to address this issue, I am making this petition to request the Ministry of Corporate Affairs that the provisions of the Companies Act 2013 (read with the relevant rules) should be amended. The amendment should provide that all companies, irrespective of size or turnover, and regardless of the number of women employed need to disclose the gender pay gap in its annual report. In cases where no women are employed, this should be revealed.
If the Government knows that the people of the country want this to happen, the action will be swift. By signing this petition and achieving this mandatory reporting, with one stroke, the social and economic status and standing of women in India would have changed for the better, and dramatically at that.
Similar reporting obligations should be made mandatory under the State legislations related to and regulating shops and establishments.
This mandatory reporting will serve the dual purpose of creating awareness of this pressing issue and on the other hand, it will create pressure on businesses to bridge the gap. I am confident that if this measure is introduced, in a couple of years, the gender pay gap in India would have reduced significantly, and perhaps, we could be the world leader in this aspect.
I am confident that my step will be the first milestone in a long battle to achieve empowerment and parity in the treatment of the women workforce.
Notes to the petition:
What is Gender Pay Gap?
Gender pay gap is the difference between women's and men's earnings, expressed as a percentage of men's earnings. The global situation has been for several years, and continues to be that women are paid less to do the same job, but the numbers also capture the fact that female-dominated work is undervalued and underpaid relative to men's work, and women overwhelmingly dominate part-time and temporary work even though they want full-time work.
The gender pay gap starts from the time women enter the workforce. The pay gap, together with time out of the workforce for caring reasons and women's higher likelihood of part-time work, impacts their lifetime economic security.
Gender Pay Gap in India – the current scenario
The latest Monster Salary Index (MSI) shows that women in India earn 20% less than men. The gender pay gap has narrowed by about five percentage points from 24.8% in 2016. But for talent with experience, the gap has widened and is at its highest at 25% for those with 11 years or more of experience, the survey said.
MSI data from 2017 indicates that men earned a median gross hourly salary of Rs. 231, while women made only Rs. 184.80. The data suggest that gender pay gap in India increases with work experience. For example, men with 0-2 years of experience earn 7.8% higher median wages than women, men with 6-10 years of experience earned 15.3% more, while men with 11 and more years of experience earned 25% more. Interestingly, there was a marginally inverted pay gap in the experience group of 3-5 years, where women made more.
A majority of the respondents (69%) surveyed felt that gender parity needed to be a top priority for organizations. However, 68% were of the view that even where gender parity was a stated priority, the management did not "walk the talk."
About 36% of all respondents indicated that there was a need for Corporate India to step up and implement pragmatic policies to bridge the pay gap, change employee perception of a healthy work culture (44%) and foster equal opportunities (17%).
In other findings, about 44% men confirmed that they could be useful advocates for change for gender initiative programs at the workplace. About 39% women thought the same. However, 40% women felt men were allies in gender equality only in private as they feared being judged by male peers or didn't know what to do about such issues.
Why is this very important in India?
When it comes to the case of developing countries like ours, i.e., India, the wage disparities by gender is far more striking. Among the BRIC– Brazil, Russia, India and China Economies, India ranks lowest on gender parity, this includes pay parity (i.e., the difference between wages of men and women). This fact was revealed in the Global Gender Gap Report of 2010. The recent survey by the World Economic Forum (WEF) on the "economic participation and opportunity," pointed out the Indian situation, ranking India among the bottom ten countries in the world in terms of women's participation in the economy. The WEF report exposed a very a shocking result regarding the disparity in wages between men and women in corporate India. The average annual income of a woman engaged in the Corporate sector in India is US$ 1,185, whereas that of her male counterpart is US$ 3,698. This brings out the fact that an average woman is paid less than one-third of the average man's pay in India. Overall, concerning gender equality, India achieves a score of 59.4%, but regarding economic participation and opportunity, it scores 39.8% which is very dismal. India's general involvement of women in the workforce stands at 36%, whereas for professional and technical workers, the figure is 21%. As per the report of the Annual Survey of Industries for the year 2004-05, the gender wage gap for regular workers in the formal sector was 57%, whereas for casual workers in the formal sector it is 35-37%. In the agriculture sector where the women participation rate is more than an estimated 60%, the hourly wage rates of women are 50 to 75% of male rates.
The discrimination and biases against women witnessed in social spheres get mirrored on to economic spaces not only through direct, legitimate routes but also via the perceptions and mindsets.
The legal framework
In 1976, the Equal Remuneration Act was passed with the aim of providing equal remuneration to men and women workers and to prevent discrimination on the basis of gender in all matters relating to employment and employment opportunities. This legislation not only provides women with a right to demand equal pay, but any inequality concerning recruitment processes, job training, promotions, and transfers within the organization can also be challenged under this Act.
In addition to the above law, there is also some protection through Article 39 of the Constitution of India which, through the Directive Principles of State Policy envisages equal pay for equal work for both men and women, and also ensuring that men and women, equally, have the right to an adequate means of livelihood. While the Directive Principles of State Policy, do not have legal sanction and cannot be enforced in a court of law (unlike fundamental rights which are guaranteed under the Constitution of India), a state is generally duty bound to apply these principles while enacting statutes.
www.livemint.com; published on March 8, 2018
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