/ 23 April 2015

Men get lion’s share of income

We hear and read in the media that black people are getting all the jobs. This is not true.
Although the proposed amendment is a good start, the department has missed an opportunity to transform the way executive compensation is determined and justified in South Africa. (Reuters)

Women earn nearly a third less than men on average in South Africa, according to the latest tax statistics published by the South African Revenue Service (Sars).

In 2013, the average taxable income for women was R193 908 a year, or about R16 000 a month. Men earned on average R254 347 a year, or about R21 000 a month.

This puts South Africa pretty much at the top end of the global gender wage gap. 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%.

Gender pay gap, data from ITUC report 2009 | Create infographics

The Sars tax statistics comprise 5.2-million taxpayers who were assessed in the 2013 tax year – slightly less than 80% of the 6.6-million taxpayers who were expected to submit a return for that year.

In the lower income brackets, the earnings of men to women is fairly even. The bulk – 37% of the women and 30% of the men – earned in the R150 000 to R300 000 taxable income bracket. That works out to between R12 500 and R25 000 a month.

But it’s in the higher income brackets – from about R40 000 a month upwards – that the gender wage gap really starts to turn into a chasm. Only 4.6% of women earn more than R500 000 a year but nearly 11% of men do. Men outnumbered women three to one in the five highest salary brackets.

Among the taxpayers who earn R1-million a year or more, men outnumbered women by five to one. At R2-million a year or more, it became seven to one and, in the top income bracket, R5-million a year or more, there were 10 men to every woman.

This, encouragingly, is an improvement on the ratios of 2010 when women earning more than R1-million a year were outnumbered by men by seven to one. Those earning more than R2-million were outnumbered 10 to one and those earning more than R5-million were outnumbered 13 to one.

Why are there divisions at the top?
The reason for the pay gap can be explained by “gender sorting”, according to the World Bank’s gender and development unit in a report titled Gender at Work. “Women are concentrated in less-productive jobs and run enterprises in less-productive sectors with fewer opportunities for business scale-up or career advancement,” the report states.

Only 24% of senior management roles globally are held by women, according to a 2013 report by Grant Thornton. In South Africa, women hold only 3.6% of chief executive, 5.5% of chairperson and 21.4% of executive management positions, according to the Business Women’s Association of South Africa’s Women in Leadership Census 2012.

At the technical skills level, the Employment Equity Commission found that women’s representation decreased from 7% in 2002 to 5% in 2012. According to the Institute of Race Relations’s South Africa Survey 2014-2015 shows that 30% of managers and slightly more than 40% of professionals are women, but the largest numbers of women are employed as clerks, in sales and service, and as elementary (or low-skilled) and domestic workers.

As of March 31 2013, more than 15.4-million people were registered as taxpayers but only 6.6-million people had R1 or more of PAYE (pay as you earn) tax deducted, according to Sars’s Tax Statistics 2014 report. There is a substantial difference between the number of taxpayers in South Africa and the number of people who are employed. About 43% of workers are expected to pay tax.

According to Statistics South Africa’s Quarterly Labour Force Survey, there is close to a 50/50 split in the number of men and women of working age, but only 43% of assessed taxpayers are women. The difference in the employment rate between men and women in South Africa is also marked: 37% of working-age women are employed compared to nearly 49% of men.

The proportion of people who are considered unemployed is the same for both sexes – 23%.

But a larger part of the female population of working age – 40% – is listed as not economically active. Only 28% of the male workforce is listed in this category. This means only 60% of the female work force is considered economically active.

Obstacles and challenges
The same factors that function as obstacles and challenges in the workplace internationally can be applied to South Africa, said Janine Hicks, a researcher at the Commission for Gender Equity. Family and personal responsibilities are generally the main reasons affecting women’s participation in the workforce.

“Childcare responsibilities, sexual harassment and promotion prospects all have an impact on the career choices women make,” she said.

In South Africa, employment equity legislation encourages flexible and creative work options for women, but companies often focus on the numbers rather than on creating enabling environments for women, said Hicks.

“There are invisible elements that continue to marginalise working women, related to an institutional culture within a demonstratedly male-dominated environment. These relate to internal policies and practice, access to skills training, harassment, and a sense that men are taken more seriously, and women have to earn their stripes – a situation that is even harder for black women,” she said.

According to a United Nations fact sheet, women spend one to three hours a day more than men on housework, and two to 10 times more time a day caring for children, old people or the sick. This work is generally unpaid.

The burden of childcare responsibilities creates a “motherhood penalty”, according to a World Bank report. It is estimated that a birth reduces a woman’s “labour supply” by almost two years during her reproductive years, which are also important years for career building.

“Women are predominant in jobs of inferior status,” Hicks said. “Women remain trapped in insecure, low-paid positions.”

In 2014 about one million South African women were employed as domestic workers, 1.3-million in low-skilled occupations, and 2.6-million in semi-skilled occupations.

Occupations of SA men and women | Create infographics

“While companies could innovate and consider the provision of childcare facilities in the workplace, and introduce flexible working arrangements that would enable women to balance career and domestic responsibilities, we’ve yet to see this taken up in earnest,” said Hicks.

In 2013, South Africa ranked relatively high, at number 17, on the World Economic Forum’s annual global gender gap index, which ranks 136 countries on the gap between women and men in four fundamental categories, one of which is economic participation and opportunity. It was the second-best performing upper-middle income country after Cuba, and the second-best in Africa after Lesotho, according to a report by the Institute for Futures Research at the University of Stellenbosch.

However, in 2009, South Africa ranked sixth highest of all the countries, so it’s 2013 ranking is not that encouraging, and neither is its score on the economic participation category: it fell from 60th highest in 2009 to 78th.