Gender based income inequality in South Africa persists!
Whether it is social, racial or gender based inequality, South Africa is all too familiar with the socioeconomic consequences of unjust inequality. According to an article published in the Mail and Guardian (24 April 2015), “An International Labour Organisation analysis of 83 countries shows that, globally, women in paid work earn on average between 10% and 30% less than men, and research by the International Trade Union Confederation and Incomes Data Services puts the global gender wage gap at an average of 22.4% and South Africa’s at 33.5%.”
Although this figure of 33.5% for South Africa seems startling, there is no mention of the methodology used to calculate this figure. This analysis will test these results making use of a database of approximately 290,000 full time, income earning employees and compare the median pay of each gender by grade. Table 1 contains the ratio of male to female pay per grade, for the upper and lower quartiles as well as the median (Total Guaranteed Package).
Table 1 indicates that on average at each grade, the median salary of men is 15% higher than the median salary of women. On 1 June 2015, the South African Department of Labour published the Employment Equity Act Code of Good Practice on Equal Pay for Work of Equal Value. This document states that pay discrimination is deemed to be unfair if the discrimination is based on amongst other reasons, criteria such as race, gender or religion. The results contained in Table 1, clearly indicate that discrimination on the basis of gender does take place in the South African labour market. Whether or not this discrimination is the result of a conscious decision or rather a historical/circumstantial result is unclear. In terms of the legislation the motivation behind this disparity is not important (unless the employer can conclusively prove otherwise, but the disparity must be addressed in order to comply with the legislation. Table 2, goes to a level deeper than Table 1 and looks at the average compa ratio (between men and women for each occupational level) at the lower quartile, median and upper quartile.
Table 2 indicates that, although the trend of males earning more than females persists across all occupational levels, the “Senior Management and Executives” level (E and F Band) has the largest disparity between genders. According to a report by the Washington Post (14 August 2013), a Bloomberg report found that in the US economy, of all the executives from S&P 500 companies, only 8% were women – and on average they earned 18% less than their male counterparts. In South Africa, there is an even larger wage gap between the total guaranteed package of men and women at executive level and this gap needs to be closed in order to produce a more equitable labour market.
Although addressing this pay inequality between men and women is of utmost importance, it should be handled with care. Simply pushing up all women’s wages will place undue strain on company’s payrolls in an already challenging economic environment. This asks the question, “How should these changes be addressed?”
When hiring new employees, care should be taken to ignore gender altogether and to offer the same starting package – regardless of the employee’s gender. If the organisation has a well-managed performance management system in place and keeps record of performance scores, then any subsequent disparities between individuals’ pay can be proved on the basis of performance. In terms of existing disparities, each organisation should analyse its payroll and look for those individuals that are paid the lowest (compared to their counterparts) and adjust their salaries accordingly. This will bring the pay levels of these individuals more in line with their colleagues that are on the same pay level. The adjustments do not need to take place all at once and can be administered over time, but the ultimate goal should be compliance with the Equal Pay for Work of Equal Value legislation, thereby eradicating unfair gender discrimination.
Bryden Morton, B.Com (Hons) Economics, is a Data Manager, and Chris Blair, B.Sc Chem. Eng., MBA Leadership and Sustainability, is the CEO, of 21 Century Pay Solutions, www21century.co.za.
This article appeared in the December 2015 issue of HR Future magazine.
