/ 8 August 2019

Why the gender pay gap persists

Targeted efforts: Anglo American’s headquarters in Johannesburg
The PwC report, which tracked executive director remuneration trends in 285 companies, found that there were only 81 women executives among the 725 people whose pay was analysed. (Oupa Nkosi)



‘I thought I was a feminist before I was a working mother, but all I was before this was a man with tits.”

This was a choice comment by a friend on a WhatsApp group, after I made a cursory inquiry about the gender pay gap — or the pay differences between men and women that stubbornly persists.

The admittedly small discussion group is dominated by working moms, and is by no means a representative sample of women’s experiences in the workplace. But the frustrations expressed by my friend (who has a masters in economics, as well as a 17-month-old child) are not isolated. They tie into the myriad complex factors that explain why the gender wage gap persists, according to Professor Anita Bosch, the research chair for women at work at the University of Stellenbosch Business School.

READ MORE: Gender wage gap in SA widens

The gender wage gap is, in part, influenced by social norms — and the notions of what roles men and women are supposed to play in society — as well as the economic value attached to work.

“The combination of these creates a huge amount of complexity,” Bosch told the Mail & Guardian.

But whether it is the motherhood penalty (or the pay discrimination that can plague working mothers) or outdated notions of an ideal worker available to his employer 24-7, ignoring or undervaluing the work women do costs economies. As one 2013 German study suggested, the time spent doing unpaid work in the household, typically done by women, was valued at almost €830-billion, or 33% of gross domestic product.

Mind the gap

If you work at Vodacom, or Investec or Anglo American and you are a woman, the chances are that you are earning less than your male colleagues by, at the very least, 15%.

This is according to the companies’ own disclosures, which echo the findings of other reports and research looking at the labour market generally and at the top echelons of the JSE.

The three companies all have their reasons for the gap and point out the various ways in which they are trying to address this — from recruiting more women to creating more family-friendly workplaces.

Since 2017, Investec and Anglo American have been required under United Kingdom regulations to report their gender pay gap. All companies with 250 employees or more report their wage gap to the UK Government Equalities Office. Companies report their figures in terms of hourly wages, which eliminates discrepancies caused by individuals who put in overtime.

The UK authorities compare pay both in terms of the median and the mean. The median gender pay gap is the difference between women’s median hourly wage (the middle paid woman) and men’s median hourly wage (the middle paid man). The mean hourly rate is the average hourly wage across the entire organisation so the mean gap is a measure of the difference between the women’s average hourly wage and the men’s.

According to Investec’s 2019 annual results — which outline its pay gap report to the UK authorities — the gender pay gap for its global operations outside South Africa, show that the median hourly pay for women is 38.8% lower than that of men.

For Investec Ltd, which includes its JSE-listed operations (and includes South Africa, Mauritius, Botswana and Namibia) the median pay gap is 26.6%.

A similar picture emerges when mean pay is compared: Investec Ltd’s male staff earn 32% more on average than females, the latter making up 54% of staff.

Men really score, apparently, if bonuses are considered: the median bonus gap between the genders is 73.4% globally and 33.3% in South Africa.

But Investec said it is confident that men and women are paid equally for doing the same job. Its gender pay gap exists “because there is a lower proportion of women in senior leadership and revenue-generating roles, which attract higher market levels of pay”.

READ MORE: Making the Business Case for Gender Equality

Gender pay gap reporting is not a measure of equal pay for equal work, said Lesley-Anne Gatter, head of human resources for Investec South Africa.

“When we use the analysis of equal pay for equal work, based on similar experience, qualifications et cetera, we would never tolerate such discrimination or bias, and as such would be comfortable with the differentials,” she said.

Gatter adds that at its South African operations 64% of Investec’s middle management is female — creating a pipeline for greater future senior executive female representation.

The company also lists its push towards gender-balanced recruitment and its family-friendly workplace policies and practices aimed at helping staff bridge the family-workplace divide, including enhanced parental leave for all staff of up to 26 weeks, which can be divided between parents.

When it comes to Anglo American, in 2018 the company’s UK head office reported a median wage gap on an hourly basis of 41.2%. But the company notes that because it is headquartered in the UK, where most senior leadership is based, this distorts these figures. Both the average and median gaps had declined from 55% and 49%, respectively, in the previous year. Investec, similarly, has also seen declines in previous years.

The gender pay gap shrinks to 15% when Anglo’s global operations — which included employees in Australia, Brazil, Chile, Singapore and South Africa — are added in.

“Mining has been an industry that has struggled to attract women and gender imbalance is, therefore, prevalent,” Anglo said in its gender pay report. “This is particularly the case in many of the most senior roles, where we often require significant operational and engineering experience.”

The company is making “targeted efforts” to recruit and develop female talent, as well as changing ways of working, including through more flexible and family-friendly arrangements.

Cellular services operator Vodacom is one of the few South African firms that has voluntarily disclosed its gender pay gap — revealing in its latest results that its ratio of the average basic salary of men to women is 1.3 to 1.

Vodacom’s human resources chief, Matimba Mbungela, told the M&G that this is, however, not “a Vodacom problem; it is a reflection of society”, particularly given the dominance of males in technology-related roles, as well as the fact that there are more men with Stem qualifications (degrees in science, technology, engineering and mathematics).

With a gender split of 43% women to 57% men, Vodacom “has more males than females in the company” he said.

But there are job categories in the company — such as business-support, customer-facing and entry-level roles — where there are more women, and where they earn more than men, Mbungela noted.

He added that in senior management roles — where experience matters as much as qualifications — the gender pay ratio was 1 to 1. The company also conducts a pay parity analysis, “at least once a year” to assess the pay gap.

According to the UK authorities, Vodafone — Vodacom’s UK based parent — reports a median hourly pay gap of 19.3%, with an average hourly wage gap of 15.3%.

According to Mbungela the company is, among other initiatives, trying to address the problem “at source” and promoting Stem subject uptake by girls in high school. This includes supporting programmes such as Code Like a Girl, which teaches girls to code.

The various efforts outlined by the firms notwithstanding, lack of women in leadership roles is a common theme and echoes the results of the annual PwC directors’ remuneration report. The report shows that women are under-represented and are consistently paid less than their counterparts at senior levels across the companies on the JSE.

According to the report, the sectors with the starkest gaps are healthcare (28%), consumer discretionary (25.1%), technology (22.9%) and financials (21.8%). But the problem is not just about the pay discrepancies.

The glass ceiling

A working paper for the United Nations University World Institute for Development Economic Research by academic Jacqueline Mosomi found that although there have been improvements in the gender wage gap in the South African labour market since 1994 they are something of a mixed bag.

At the top of the wage distribution graph, since 2005 the disparity appears to have been widening due to a continuously expanding unexplained gap, “implying a glass ceiling effect for women at the top of the wage distribution”.

This unexplained wage gap is the gap that remains after controlling for human capital and individual characteristics. When it comes to top female earners, Mosomi found that women actually receive lower rewards than men for their educational qualifications — leading to the expanding unexplained gap, which is “usually associated with discrimination”.

Many of these problems, argued Bosch, can eventually be explained only by investigating how female workers are perceived, particularly once they have children.

In a 2015 paper Bosch elaborated on a host of reasons why the pay gap persists, as outlined in international research. These include the undervaluing of women’s skills — such as caring and organising — which leads to occupational segregation. Clear evidence of this can be found in the teaching profession, she said — where salaries are relatively low for work that ultimately has a very high social and economic impact.

Bosch also cites research from the United States into the motherhood penalty and the fatherhood advantage. Researchers found that mothers were paid much less than their childless peers, while fathers were paid somewhat more than their childless counterparts, because they are perceived as breadwinners.

“Workplaces are so structured around the idea that an ideal worker is somebody who is available 24-7, disembodied and with no caregiving obligations,” said Bosch.

“As long as we hold onto this idea of that as an ideal worker, anybody that does not conform to that definition will find it difficult to get paid what other people get paid.”

“This poses a problem for us as we move to more flexible work practices for both men and women,” she noted, adding that employers need to re-examine concepts of an ideal worker, which could ultimately benefit both men and women.