Over the years, there has been inequality rooted in the labour markets whereby both males and females provide services; however, during payment, men are considered and receive high wages than women. Similarly, in the same case of a rise in ethnic minorities, individuals from marginalized groups do not obtain the exact value of salary as their counterparts. This has been a common trend across all industries, and employers are consistent in ensuring that variation persists. Most workers encounter system biasness, which makes them extremely exploited considering the level of commitment and value they generate to the business organizations. To overcome and reduce the pay gap between men and women, the management of companies should formulate effective policies that enable individuals to receive fair compensation. Factors such as job discrimination play a vital role in enhancing the wage gap between white people and other ethnic minorities within the labour market.
Generally, in the workplace, women and women provide important services, but the former is subjected to less pay despite contributing effectively to the organization. A number of factors have influenced the wage gap that exists between men and women in the labour market. Some of the aspects include occupational segregation, division of labour, experience, and expectations of the company.
Factors Promoting Wage disparity in Labour Market
Generally, the earning power of an individual depends on the human capital investment. Training is influenced by the lifetime labour force commitment. When a person works over a long period of time, they increase their chances of being trained by the organization. After undergoing a series of career development, a person can then receive sizeable wage payments (Blau and Kahn, 2020). Similarly, limited exposure would mean reduced knowledge and skills required, thus lowering the rate of earnings. Over time, women’s potential to participate in the labour market reduces, limiting their chances of being subjected to human capital investment (Blau and Kahn, 2020). This factor makes the wage growth of women drop in comparison to men.
Some corporations have adopted the tendency of not training women due to the fact that women would not offer the required benefits for the organization for a long period of time. The limitation lowers the ability of women to excel in the labour market, thus hindering them from job advancement to receive better pay (Noon, 2018). Therefore, the failure of women to engage in productive career development plays a significant role in increasing the wage gap between men and women.
Job labelling is another factor that makes women the minority in some areas of specialization. Despite the large number of women graduating from universities, fields such as engineering, computing, and mathematics have less women than men. Similarly, technical occupations are ignored by women making them be over-represented in low-valued jobs with less pay as compared to the scientific and complex opportunities that offer high wages (Butkus et al., 2018). In addition, this scenario also contributes massively to the wage gap between genders.
Most organizations offer part-time job opportunities to their employees and offer significant compensation to reward their services. Generally, men have less family responsibility than women; therefore, they have the ability to secure such offers, unlike women, especially the married ones with heavy home duties. The overtime payment allows men to earn more wages than ladies who cannot or have a limited chance to obtain such advantages from their employers.
Companies and other employers hire employees with the expectation of maximizing their labour force over a long period of time. When recruiting workers, organizations understand that women have other responsibilities to undertake at home, unlike men. This aspect reduces the labour force participation of women (Polachek, 2004). The decrease prompts corporations to assign them to lesser jobs with small pay. However, when men are married, their work commitment increases, thus making them earn more. The added responsibilities facilitate most companies to prioritize giving men better-paying opportunities. When a woman bears children, her work participation declines proportionately. Therefore, babies contribute effectively to the lower growth of women wages in the labour market.
Most employers pay married women without children a considerable amount of money than those with children. However, this perspective is reversed when dealing with cases of men. Married men with children, on the other hand, obtain more wages than counterparts with no babies (Bishu and Alkadry, 2017). This implies that inequality in pay varies more significantly by marital status and the number of children. Even though firms do not seek relevant information concerning the statuses of employees, the variables remain effective influencers on the gap between men’s and women’s pay.
Moreover, features of jobs play a significant role in promoting the pay gap between men and women. Most women value and consider the attributes associated with the occupations they are seeking. For instance, when looking for work opportunities, women consider factors such as flexibility that would make their careers more compatible with the domestic roles (Petrongolo and Ronchi, 2020). Similarly, they prefer shorter commutes and other aspects that translate into poor earnings. These issues do not affect men, and thus they would secure any occupation irrespective of its nature as long as they are receiving considerable wages. Therefore, the characteristics of the profession are a significant contributor to the compensation difference.
The ranking is one of the known criteria used by employers to compensate their workers. In most organizations, women are allocated lower positions that guarantee them less wages. This practice ensures that men remain dominant and hold higher ranks in the workplace, thus enabling them to receive high income. The occupational rankings within the labour force create the variation in compensation and ensure women obtain lower rates than men.
In most occupations, men are viewed as the most experienced and qualified for the job opportunities. This aspect deprives women a chance to secure similar vacancies because employers underrate and see them as less valued and cannot be much productive in the industry as their male counterparts (Blau and Kahn, 2000). The belief allows men to receive better pay, thus increasing the wage gap irrespective of their qualifications as compared to women.
Ethnic Occupational Segregation
Ethnic occupational segregation is the practice of allocating individuals to different job positions in the labour market. The process exhibits both voluntary and involuntary aspects that determine who obtains what allocation. Based on the conditions, the latter leads to job closure, and people are constrained from accessing securing positions that are well paying within the labour market (Brynin and Güveli, 2012. This factor makes individuals from minority groups have a challenge in obtaining prestigious occupations than whites because they are not capable of convincing the organization’s management about the relevance of their qualifications acquired from the home country. This makes the white people have the potential of receiving high wages than other groups.
Similarly, the element of segregation contributes massively to the wage gap that exists in ethnic minorities. For instance, in some labour markets, there are respective job opportunities that non-white employees are not allowed to access despite their qualifications. These positions are held for white men and women whether they are less qualified for the positions. This practice makes the minorities to be over-represented in other areas of occupation whereby they provide services below their credentials. In such circumstances, the workers will be paid higher wages than their counterparts with less qualifications in the job.
Limited Alternative Works
Generally, the aspect of pay discrimination amongst ethnic minorities is contributed by the level of insecurity that is caused by limited work alternatives. Most minorities are over-represented in some sectors of the labour market, thus leaving many with no option of job opportunities. The congestion makes it easier for them to accept any wage value, unlike the white group that has unlimited job access. The factor deprives the marginalized of the ability to bargain for better payment despite the services and level of training they possess.
Racial stereotyping is common in most organizations dominated by native whites. Employees have certain beliefs that associate minority groups with the inability to perform their duties effectively. They often claim that the ethnic classes are lazy and less productive. These aspects prompt the management to offer low wages to such individuals irrespective of the value they contribute to the respective industry. The categorization makes white counterparts have added advantage in terms of remuneration and even further promotion leading to more income. Moreover, some studies have linked white employers with name discrimination. During job application, applicants with names that indicate Black, Asian, Hispanic, Indian, and any other ethnic groups have low chances of callback compared to white men and women. The prejudice enables whites to have greater work opportunities than non-whites, increasing the pay gap.
Access to Hiring and Promotion
Ethnic minorities have limited chances of being hired by most well-paying organizations. Employers usually doubt their abilities and level of qualifications to secure such prestigious professions. This makes it difficult to access occupations that can pay them accordingly. Similarly, upon obtaining employment, it is a norm that with time at some point, a person receives work promotion that comes with a huge compensation package. However, for people of colour, such privileges are less common as compared to the rate at which white individuals are offered the opportunities. This leaves marginalized communities with the initial pay agreement, thus making the gap between their earnings and their counterparts massive.
Policies to Reduce Gender Pay Gap in Labour Market
To overcome the menace of the gender pay gap that is persisting in the labour market, governments should formulate some fiscal policies that ensure factors that contribute to the differences are reduced. Some of the guidelines that should be enacted to minimize the variation of wages between women and ethnic groups from men include equal pay for occupations of equal value, initiating caregiver credits, and prohibiting pay secrecy. Furthermore, protection of employees against employers’ retaliation, work-life supports, and anti-discrimination procedures are essential in ensuring the unequal payment is battled effectively.
Equal Pay for Jobs of Equal value
The policy of equal pay for the job with the same value should be promoted. When such guidelines are enacted, women and ethnic minorities will have the opportunity to receive better wages as their male counterparts. Similarly, the practice will ensure people of colour obtain the right compensation. This will allow employers to effectively reduce the unequal pay that exists in the labour market (Bleich et al., 2019). Since the profession requires the same effort and commitment, there should be no variation in the rewards given to service providers. To establish the value of the work to determine equal payment, the following factors should be considered; responsibility, effort, skills, and working conditions. When such criteria are met, then male-female pay should be equivalent.
Prohibiting Pay Secrecy
Pay secrecy is a tool that grants employers an opportunity to exploit some of their employees during compensation. By prohibiting the act, workers will be able to discuss with their colleagues about remuneration and the value of pay they receive from the organization. Such conversation would create awareness for those individuals who might have lacked information concerning the worth of the occupation (Blundell, 2021). When people are informed, they will have the ability to demand the same pay as other members, thus facilitating equal pay within the profession.
Issuing Credits for Caregivers
Adopting policies such as issuing caregivers with some compensation is essential to reducing the gender pay gap. Generally, women are tasked with the responsibility to spend time at home caring for the young ones. These roles deprive them of having the opportunity to participate in the labour force. They then experience a lower work lifetime that reduces the earnings they receive compared to male counterparts who have a longer time to engage in the labour market (“Government Equalities Offices,” n.d.). By encouraging the provision of caregiver credits, women have the potential to raise their income to a higher level closer to men. Most European countries such as Sweden, France, Norway, and Germany are providing pension programs to reduce the gender pay gap.
Adopting Proactive Wage Discriminatory Policy
Governments should make guidelines that help them deal with cases of wage discrimination within their systems. Prior establishment of such policies will enable firms to counter such unequal acts, thus reducing the impacts. Companies and governments should not rely on the complaints in order to respond but instead have a well-structured system that guides the practice. For example, in France, the authority mandated that all employers properly review their compensation criteria and construct an annual plan for the next year.
Organization’s Practices to Reduce Wage Disparity
Curbing the pay gap in the system depends on the reforms and practices incorporated by the respective organizations. Formulating proper interview strategies, using salary ranges during the negotiation, and equal and fair treatment are some of the approaches that can be adopted by the company to lower-wage discrimination. Furthermore, applying transparency on rewards and other benefits should be cultured in the corporations. When these procedures and actions are adopted, firms will have the ability to battle unequal pay.
Practicing Transparency in Rewards, Promotion, and Pay Process
The management of organizations should promote a culture of transparency in all processes they undertake within the system. When workers are informed and made aware of the policies and criteria the employer use during job promotion, rewarding, and paying wages, it will be easier for them to effectively to understand. Similarly, the acts and decisions of managers will have to be evidenced-based because the practices allow employees to review the steps and procedures involved. A culture of transparency is significant because it prevents the executives from engaging in practices that can enhance inequality.
Apply Structured Interview Approach
Generally, both structured and unstructured interview procedures have equal effects when it comes to the recruitment and promotion of employees. However, when employers use an unstructured approach, they are likely to be biased in their decisions which can lead to unfair hiring of new workers. Therefore, to overcome the possible discrimination, managers should employ the use of the structured questioning technique. This style allows directors to have the same type of questions to be used for all applicants, thus lowering some unnecessary influences. Moreover, the method enables interviewers to grade the participant using an already pre-determined format hence preventing discernment that can cause inequality.
Using Salary Ranges during Negotiation
In most cases, women are shy to bargain the value of their pay, especially when they have limited knowledge about the reasonable offer. In such circumstances, employers should have a well-structured salary range during the negotiation process to enable women to explore and understand the compensations provided based on the job descriptions. If managers provide much room for negotiation, women will have the ability to comprehend what they should expect. The act enables organizations to reduce the fear that can make ladies fail to express themselves, which can lead to unequal pay.
Using Skill-Based Assessment
Managers should engage job applicants in skill-testing based on the roles they are expected to play upon recruitment. When the criteria are used rather than relying on interviews, employers will have deep insight into the capabilities of applicants, therefore, facilitating the hiring of the right candidate for the intended post. The practice will enable organizations to reduce the chances of biasness that can result in unfair employment.
Improve Flexibility of Workplace
During job advertisement and organization offers such as part-time, sharing jobs, and remote working, employers should include both women and men in order to eliminate biasness. The practice will enable women to benefit and have more confidence in the organization since workers will feel included in the offers provided. In the case of rewards associated with such engagements, both genders will have a fair share. This act will facilitate the ability of managers to overcome job discrimination.
In summary, the gender pay gap in the labour market is common and caused by a number of factors. Men, women, and people of colour are subjected to different wages despite performing the same activities and having equal qualifications. The disparity in compensation is a result of having children, stereotyping jobs, level of training, and lifetime labour force participation. These aspects play in the favour of men, making them have high earning rates than women. Similarly, ethnic occupational segregation, limited work alternative, and racial beliefs facilitate the unequal pay minority groups experience in the labour market. In order to overcome the disparities, organizations should formulate proactive wage discriminative policies to allow them to prevent occurrences of such biasness. Furthermore, managers should facilitate practices including the use of salary range during negotiation using skill-based assessment during recruitment and promotion. Lastly, employers should encourage transparency in their processes to ensure employees are aware of the company’s practices.
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