The gender pay gap - like any other pay gap - is the difference between what a specific gender group earns relative to another. To put it simply, this can be calculated as follows:
So far, little to no improvement has been made in this area. In 2002, it took 52 extra days a year for a female to make the same amount of money as their male counterpart. 20 years later, females still need 47 extra days to make the same amount a year as males. 5 days less of extra days of work in twenty years is practically negligible.
Recently, President Biden posted a letter he received from a child in his Twitter profile.
And then he received the following response:
We will never know if a real kid asked for the gender pay gap, nor whether Biden is effectively worried about it. But we know that the gender pay gap exists (see here, here, here and here) and we will attempt to explain the issues behind the response that the President of the United States received, along with some extra considerations.
Issues behind the Pay Gap and the way to measure it
Yet we know that we shouldn’t control for the variables that you are trying to measure. Therefore, to address @MattWalshBlog point on the gender pay gap, we can definitely tell them that if one controls for a variable that is expected to explain something the regression might not be reliable or the variable gender might not be statistically significant. Yet this does not mean that the gap does not exist.
What is Equality Group doing about it?
Recently, Equality Group (EG) published their 2023 PE & VC Inclusive Index Score called HONORDEX. This index measures the position of each company within a rank of scores, according to a specific Equality, Diversity and Inclusion (EDI) framework. This means that every year, EG scores an average of 300 firms according to their performance on EDI, considering different areas such as Working Conditions, how Inclusive the work teams are, their EDI approach on public digital channels, and their EDI Leadership support, and critically pay equity data. In other words, EG is making the usually “unmeasurable” variables measurable, providing a quantitative framework for qualitative insights on EDI.
This year, we have also published our own pay gap analysis at Equality Group. By running anonymous surveys across the team, our firm was able to identify that there is a gender pay gap of 0.2% which becomes statistically insignificant when we analyse a set of other relevant variables. Although we are well below the UK government’s suggested threshold of 250 or more employees to report these findings, we believe that showing our gender pay gap data will pave the way for smaller companies to follow our steps. This will, in turn, allow them to identify gender-caused pay disparities and address the matter properly.
1. Economic inequality by gender, Ortiz-Ospina & Roser (2018)
2. What is the gender pay gap and is it real?, Gould, Schieder & Geier (2016)
3. Blau, Francine D., and Lawrence M. Kahn. 2017. "The Gender Wage Gap: Extent, Trends, and Explanations." Journal of Economic Literature, 55 (3): 789-865