How the gender numbers game hides pay gaps

During notionally light-hearted moments, the truth slithers out from under the carpet.

Shortly after becoming chairman of the International Air Transport Association’s board of governors, Qatar Airways CEO Akbar Al Baker was asked by an Australian journalist what could be done about the woeful representation of women in Middle East aviation.

He tried to be flip about it. First mistake. And then he said, in jocular fashion: "Of course it has to be led by a man because it is a very challenging position." There were groans.

And there are ironies. By the standards of Middle East aviation, as Al Baker sorrowfully pointed out afterwards, Qatar Airways is a frontrunner: the first airline in the region to employ female pilots, one of the first to train and employ female engineers, and with females represented through to senior vice-president.

About 44% of the airline’s staff are women, he said, offering his "heartfelt" apologies.

This little vignette, echoed in many other situations, provides a kind of a trope of our times. The man unwittingly makes a sexist faux pas. He rapidly withdraws and apologises. The spin doctors enter. The numbers are rolled out. Life goes on.

Gender equality has been reduced to a kind of numbers game, yet the numerical count — often skewed — tends to obscure a much trickier problem: what is the gender pay gap?

Oddly, the aviation industry is one of the few in which most senior jobs, such as commercial pilots, have standardised pay, partly because its such a tightly regulated industry. But it’s also one in which the gender disparity is enormous. Of the 130,000 commercial pilots flying today about 4,000 are women.

SA’s Commission for Employment Equity 2016-17 report puts the gender split at senior management level at 39% in the public sector and 31.5% in the private sector. Other levels down the salary scale follow more or less the same pattern.

The numbers shift somewhat for the professionally qualified category in the public sector, where women predominate, presumably because of the preponderance of women teachers and nurses. But in the private sector, the numbers remain more or less the same, with a 61.4% preponderance of men.

Complicated

At top management level men predominate even more markedly, with only 30% and 20% of women in the public and private sectors, respectively.

Gender discrimination in both the public and private sectors is pretty obvious, but the reasons for it are complicated. By international standards, SA’s gender split in the workforce is among the best. The World Economic Forum’s (WEF’s) 2017 Gender Gap report, which blends work, education, health and politics, puts SA 19th out of 144 countries, roughly the same as Germany and France, and better than Switzerland.

The global statistics are also very clear on the big salary gap between men and women, and in SA it is almost exactly the same as the rest of the world.

The WEF report suggests that women earn between 10% and 35% less than men, with most Group of Twenty countries around the 20% mark. This is improving very slowly, and in 2017 it declined for the first time in years.

Interestingly, the pay gap is almost the same for rich and poor countries. In SA, the latest figures from Statistics SA’s 2015 Labour Dynamics report shows that the median salary for men was R3,500 a month compared to R2,700 for women — a difference of about 23%. That’s a two percentage point improvement from 2010.

The age breakdown is striking. Women and men aged from 15 to 44 years have seen their salaries increase in the five-year period by about the same as in the three age brackets that make up this group. Men’s salaries have risen by 7% in real terms over this period, but older women’s salaries have stagnated.

The reason the numbers attract intense debate is that women constitute a smaller part of the total workforce. The WEF report estimates the gender difference in workforce participation globally at about 58% for women and 79% for men.

Some studies suggest that since these are global numbers — a simple calculation of what people in each gender earn divided by the number of people — if the number of hours worked is factored in, the difference narrows to almost nothing.

This suggestion sparked a new set of studies that calculated an hourly wage comparison. The studies again demonstrated that there is, in fact, a gender pay gap, but it also threw up some interesting anomalies.

Men who worked longer hours out-earned women, but women who worked shorter hours in some earnings categories tended to out-earn men on an hourly basis. Women working the same number of hours as men earned less, with most countries at about the 10% to 15% level.

All of this makes instinctive sense. Given the predominance of men in higher-ranking positions, it stands to reason they will be working longer hours and earning more.

But when women reach these lofty heights and work the same hours as men, for one reason or another there is discrimination at work, as many professional women will confirm with some bitterness. However, because women are often more involved in child rearing than men, women often prefer shorter hours. More flexible work and their relative outperformance in this band suggests employers are trying to accommodate parental responsibilities.

Because these issues are complicated by history and culture as well as discrimination, academics are cautious. University of Johannesburg professor of social development studies Leila Patel says that the reason gender pay inequality is so enduring is that many of the issues are deeply embedded in society and practice.

"More research is necessary on some of these issues, but in general, they have to do with perceptions of bargaining power, the types of work where women predominate and the impact on careers interrupted by pregnancy and child raising," Patel says.

There are other reasons too, some backed up by data, some not. One problem is that closing the gender gap in some companies would cost an enormous amount of money, so managers are resistant to the idea.

Since April, companies in the UK now have to report on their gender pay gap, and some companies’ pay structures are truly shocking.

International merchant bank Goldman Sachs announced a 55.5% gap and a mean bonus gap for its UK unit of 72.2%. International bank HSBC announced a 59% gap.

Goldman Sachs said its gap reflected the fact that it had more men than women in senior positions. But it also reported a mean gender pay gap of 16.1% and a mean bonus gap of 32.5%.

Why does the gap persist? It’s possible that women settle for less because they perceive themselves to have less bargaining power. They also tend to enter professions at a lower pay level, and they never catch up throughout their careers.

Women argue that although it is often claimed they work fewer hours than men and consequently earn less, there is little appreciation for why this is so. There is too little recognition by employers and society of the care burdens working women have for their families and of their other contributions to society. This is a major structural and sociocultural barrier to gender equality.

There are also legitimate reasons why men are paid more; often men do more dangerous work. One of the best-paid blue-collar jobs in SA is in mining, which is male-centric.

Because men, as a rough generalisation, are interested in things and women are interested in people, men often participate in engineering and related work. This kind of work is often more scalable than personal interactive work where women predominate.

Its increasingly less true but, generally, men predominate as entrepreneurs, especially in technology — and the success of this field in modern times has skewed the data.

The picture is changing.

Outperforming

In the US, the number of women in the workforce recently overtook men. Women are now outperforming men by substantial margins in the number of degrees earned.

The nature of work in advanced industrial countries is tracking towards skills where women predominate, particularly in the services sector.

In SA, though, the overall picture is depressing. Statistics SA reported that women fill 44% of skilled posts, which includes managers, professionals and technicians — and they have done so since September 2002. The rigidity of SA’s labour markets plays a role, as does a society in which racial inequality is perceived as the more immediate problem.

The static nature of SA is worrying. The World Bank estimates that the total wealth lost due to gender inequality increased from $123.2-trillion in 1995 to $160.2-trillion in 2014 — about twice the value of global GDP. Its study is questionable, as it simply takes the difference between what women and men earn and posits it as wealth lost.

But presumably, women’s gain could be men’s loss, although the World Bank points out that is not necessarily the case. Through multiplier effects, unleashing women’s earnings potential could generate even larger earnings and human capital gains for both men and women.

The WEF report approaches the problem differently, tallying gross domestic income per capita in all countries in the world against its calculation of gender disparity.

The numbers are not conclusive: there are some countries with high-ish levels of discrimination, such as Japan and Korea, that are very successful.

Many poor countries have low-ish levels of discrimination.

But broadly speaking, the data suggest gender discrimination hurts society materially.

Corporate SA, particularly, should be making much more of an effort.