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Gender Pay Gap: How Are Women Affected?

1. Introduction:

Gender pay gap is defined as the difference in the average gross hourly earnings of female and male. In addition to highlighting the gender-based inequality in the professional world, it also serves as a means to monitor progression. According to the International Labour Organization (ILO), wage inequality is the highest in low-income countries.[1]Gender wage gap is a socioeconomic malice that is a barrier to social justice.India currently stands at rank 112 in the World Economic Forum’s Global Gender Gap Index 2019-20. It is pertinent to note that the country has fallen 4 places from its 2018 rank.[2]The stubborn inequality in the difference of wage persists in all countries and across all sectors. Working women in India, account for 24% of the total population of the country. Hence, the need to frame and implement state policies that will ensure activeparticipation of women in the work force, cannot be under exaggerated.

2. Analysing the causes of wage-gap:

The causes cannot be binarily explained as it is nuanced and complex in nature. The inequality stems from a historically common belief that men have to provide for the familyand women have take care of the children and the household. Hence, the root cause is gender-based discrimination, with every other problem stemming from it.

Most women end up working in low-income fields as a result of social norms that dictate what is and isn’t a “feminine job”. As a consequence of occupations being classified on the basis of gender, there is a dearth of women in STEM (Science, Technology, Engineering, and Mathematics).

In several developing countries, like India, factors such as education or the lack thereof, preferential employment by employers, and so on are also causes. The line that connects all the dots is the deep-rooted systematic portrayal of women as inferiors.

Moreover, women are most often made to choose between their career and family. In fact, the wage gap is significantly larger for women with children. In South Asia, for women with children, the wage gap is 35%, as opposed to that of women without children, which is 14%.[3] Also known as the “motherhood penalty”, this forces women into taking up jobs in the informal sector, with most often no security of job. In some cases, it also leads to them being forced to take up part-time labour.The absence of family-friendly working arrangements deprives mothers from participating actively in the labour markets.

3. How are women affected?

In India, men make Rs 242.49 per hour, while on the contrary womenmake only Rs. 196.3.[4]To put things in perspective, providing equal pay would lead to the poverty rate for all working women to cut in half, from 8.0% to 3.8%[5]. ILO estimates that, between 1994-2010, female employment in Indiacould’ve increased by almost double, if women had been provided equal access to employment in thesame industries and occupations as their male counterparts.

Persistent pay gaps have severe economic consequences. Gender gaps in pay and work opportunities mean that women can earn up to 75% less than men over their lifetime. In the long run, this causes women to be much less prepared for retirement.

In some cases, women who are employed in organizations that do not provide adequate maternity protection are forced to take career-breaks. This, in turn, reduces their longevity at the company, hence affecting their chances of getting a higher salary.

In addition to the economic effects, gender pay gap has a profound effect on mental health, as well. A study indicates that gender pay gap contributes to increased rates of depression and anxiety among women.[6] As a result of being paid less than the male employees, for the exact same work done,women are highly likely to feel underappreciated and undervalued.

According to ILO, if the current trends continue to prevail, it will take more than 70 years before the gender pay gap is closed completely.[7]

4. Legality of the issue in India

The Equal Remuneration Act passed in 1976 states that, it is the “duty of employer to pay equal remuneration to men and women workers for same work or work of a similar nature”.[8]The Act was certainly a step in the right direction, however there was a dire need to improve it. One major drawback of the Act was that it put the onus on the individual (by means of suing), rather than actually making companies and organizations abide by it. In other words, it became the responsibility of the victim to claim equality under this act, instead of the companies honouring it without legal intervention. Additionally, Section 16[9] of the ERA gave the government undue power to declare what was obviously unequal, equal.

In the landmark case ofAir India vs NargeshMeerza, the facts where such that, there were differences in the recruitment process and conditions of service of female air hostesses and male air stewards, in spite of the fact that they performed similar work. It was held that the government’s declaration under section 16 was “presumptive proof” that there was no gender-based discrimination under the purview of ERA.[10]

The Act was repealed in 2019 to pave way for the Code on Wages, 2019. The Code replaces four existing laws – the Payment of Wages Act 1936, the Minimum Wages Act 1948, the Payment of Bonus Act 1965, and the Equal Remuneration Act 1976.

The Code on Wages Act stands out for its inclusivity of the third gender. It also shelved Section 16 away for good.

Despite the Standing Committee on Labour’s recommendation to include provisions for prohibiting gender-based discrimination not only in terms of wage, but also, recruitment and conditions of service, the Code failed to include the latter two.

The Code, being largely aspirational, would make its implementation a challenge, too.

5. Importance of Decent Work

Decent Work is defined as by the ILO as, “opportunities for work that is productive and delivers a fair income, security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity and treatment for all women and men”.[11]

It is essential to learn about the concept of Decent Work, whilst on the topic of gender pay inequality. Gender equality is the very core of Decent Work. Decent Work seeks to reduce poverty, by means of inclusivity, for a sustainable development.

Achieving Decent Work is the goal for agencies working in developing countries, where women have very little or no security in employment; are more likely to be engaged in the informal sectors; face biasedness in income and career development opportunities; and are vulnerable in periods of maternity leave and pregnancy.

ILO India released it’s third ‘Decent Work Country Programme’ (DWCP), for the years 2018-22, in 2018. It outlined how various agencies such asthe government, employer organisations, etc will work in unity, for the given period, to ensure a progressive future that promises work-for-all.[12]

One of the programme’s three priorities is to create inclusiveand decent employmentfor women and the youth, especially those vulnerableto socio-economic exclusion and those in the informal economy.

Decent Work is thus the path that leads to discrimination-less professional world.

6. Conclusion

The road to completely closing the pay gap in India is certainly a long way ahead. With the right amendments to existing policies followed by their effective implementation, bridging of the gap would be a definite occurrence. The DWCP predicts the formalization of the majority of the informal sectors by 2022.

Establishing anti-discrimination legislation across all occupations would help to expand employment opportunities for women. Provision of educational opportunities across rural and urban regions and unbiased approach right from hiring to promotion are the catalysts for a future that promises equal pay for equal work.


[1] ILO, Wage Report 2018/19: What lies behind gender pay gaps 15 (2018).

[2]Sayan Ghosh &Sumant Sen, Where does India stand in the Global Gender Gap Index?, THE HINDU (Jan 06, 2020, 06:01 PM), https://www.thehindu.com/data/data-where-does-india-stand-in-the-global-gender-gap-index/article30494545.ece.

[3]UN WOMEN Team, Equal pay for work of equal value (UN Women, 2016), https://www.unwomen.org/en/news/in-focus/csw61/equal-pay.

[4] Rica Bhattacharya, Gender pay gap high in India: Men get paid Rs 242 every hour, women earn Rs 46 less, THEECONOMIC TIMES(Mar 07, 2020, 10:55 PM), https://economictimes.indiatimes.com/magazines/panache/gender-pay-gap-still-high-women-in-india-earn-19-pc-less-than-men-report/articleshow/68302223.cms.

[5] Jessica Milli, Yixuan Huang & Heidi Hartmann, The Impact of Equal Pay on Poverty and the Economy (Institute for Women’s Policy Research, 2017), https://iwpr.org/publications/impact-equal-pay-poverty-economy/.

[6] Cory Steig, How the gender pay gap affects women’s mental health, CNBC (Mar 31, 2020, 10: 08 AM), https://www.cnbc.com/2020/03/31/how-the-gender-pay-gap-affects-womens-mental-health.html.

[7] Jill Rubery &AristeaKoukiadaki, Closing the gender pay gap: a review of the issues, policy mechanisms and international evidence (International Labour Office, 2016), https://www.ilo.org/gender/Informationresources/Publications/WCMS_540889/lang–en/index.htm.

[8] The Equal Remuneration Act, 1976, Sec 4(1).

[9] The Equal Remuneration Act, 1976, Section 16.

[10] Air India v. NargeshMeerza, AIR 1981 SC 1829.

[11] International Labour Organization, Decent work (2016), https://www.ilo.org/global/topics/decent-work/lang–en/index.htm.

[12] Sonal Kheterpal, ILO India releases third five-year programme to ensure decent work-for-all, BUSINESS TODAY (Nov 21, 2018, 06:49 PM), https://www.businesstoday.in/current/economy-politics/ilo-india-releases-third-five-year-programme-to-ensure-decent-work-for-all/story/293175.html.

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Author

Snikdha Balaji
Student - SASTRA Deemed to be University