Image credits: Andrea Villar, Mexico Business News
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Analysis

Bridging Gender Pay Gap Is Everyone's Job

By Andrea Villar | Mon, 03/08/2021 - 09:00

The pandemic has reversed over 25 years of progress toward more gender equity, revealed the UN late last year. This problem is fueled by bias in salary negotiations, the so-called motherhood penalty and lack of access to education for women.

Between 2017 and the start of the pandemic, in Mexico women earned on average MX$85 (US$3.9) for every MX$100 (US$4.6) earned by men, which means an average wage gap of 15 percent, according to the Mexican Institute for Competitiveness (IMCO). Due to the pandemic, women's economic participation in Mexico dropped from 45 percent to 41 percent, the same level it was in 2005.

The perception of almost half of the women, however, is that the pay gap is wider. A survey by Runa HR among more than 450 women who work for companies in Mexico found that 47.6 percent believe that men earn 26 to 50 percent more than women. Likewise, 66.4 percent believe that the gender pay gap in the country is worse than in the rest of the world.

Grassroots Issue

Access and level of education are some of the main factors contributing to the gender pay gap.  At the beginning of 2020, women with high school or higher levels of education faced an average wage gap of 15 percent, according to IMCO. Female workers with this level of education earned MX$8,454 (US$393) per month, while male workers earned MX$10,000 (US$465). The Ministry of Finance and Public Credit (SHCP) estimates that if women are provided with more education and training, their incomes can increase by 18 percent.

“Lack of talent is a major challenge. Education needs to be fostered so girls know that they can perform in leadership roles. There must be comprehensive solutions to this problem coming from different sectors and not only from the labor market,” said Claret Uribe, Disruptors and Fintech Growth Client Partner at Facebook Mexico, during the webinar “The Gender Pay Gap in Mexico” organized by Runa and Latinas in Tech.

“This is a matter of inclusion and equity, but it is also a matter of economic potential that the country is losing by not getting the right conditions to allow women to fully join the labor market," said Minister of SHCP Arturo Herrera on Monday during the event ‘Economic Growth with a Gender Perspective’. 

In Brazil, Chile, Mexico and Peru, Laboratoria, a nonprofit organization established in Latin America in 2014, combines applied coding education, socioemotional training and job placement services to create opportunities for girls from low-income families. The organization has graduated more than 820 girls and aims to reach 5,000 young women by 2021.

Bridging the Gap: More Than Just a Wage Increase

Closing the pay gap and promoting women in leadership positions not only has a positive impact on the fight for gender equality but also on companies and countries. According to IMCO, incorporating 8.2 million women into the labor market over the next 10 years would increase Mexico's GDP by 15 percent. To achieve this, the report states, the government needs to implement actions, such as a universal childcare system and encouraging the private sector to promote investments and projects that include more women.

The lack of women in the workforce in Mexico, especially in leadership positions, limits women's aspirations, Caroline Merin, COO of Rappi globally, said during Runa HR’s webinar. “When you do not see someone like you in a position you automatically think it is not an option for you and unconsciously limit yourself,” she explained. The key to fostering diversity, Merin added, is to develop internal talent in companies so women can eventually take on more senior positions. “Not only is it the job of women to seek to improve the situation, but of the whole company,” Merin noted. In addition, she said that the impact of a more diverse team is positive for companies, especially if their product or service is also aimed at women. “If the consumer of your product is diverse, you need your team to be diverse.” 

According to a report from the International Labour Organization (ILO), in which 13,000 enterprises in 70 countries were surveyed, more than 57 percent of respondents agreed that gender diversity initiatives improved business outcomes and more than 54 percent said they saw improvements in creativity, innovation and openness. A similar proportion said effective gender inclusivity enhanced their company’s reputation. By having more diversity in their leadership teams, companies will be able to treat everyone more fairly by addressing the issue in a more conscious way, said Merin “When you are in a leadership position, you have more influence over the company's direction and strategy. You are in a position where you can influence directly how to close the gender pay gap, draw attention to the issue and highlight unfair policies,” noted Merin. “The reality, however, is that both men and women have biases and recognizing that is important.”

In the Gender Social Norms Index released by the UN in 2020, it was revealed that almost 90 percent of men and women hold some sort of bias against women. There is no country in the world with gender equality, the study found. Nearly half of the world's men and women think men make better political leaders, according to the index, and more than 40 percent think men make better business executives and that men have a better right to a job when these are scarce. At the same time, 28 percent think that a man is justified in hitting his wife.  

According to the index, which contains data from 75 countries and covers over 80 percent of the world’s population, progress in the share of men with no gender bias was the largest in Chile, Australia, the US and the Netherlands. This rate fell in countries like  Sweden, Germany, India and Mexico. “Gender equality is still a pending issue for Mexico. There are not only moral, ethical or justice reasons, but also economic factors that should motivate us as a society to achieve this change,” said during the webinar Anna Aguilar, Head of Growth at Stripe Mexico. 

Motherhood Penalty

When a woman becomes a mother, career development only gets more complicated. “While being a mother is complicated, when you add a non-flexible working environment, the complexity increases. There comes a time when the complications are so great in such a short period of time that women are forced to choose between work and motherhood,” Maria Aguayo, Head of Growth Marketing for the Americas at Expedia said at Runa HR’s and Latinas in Tech event. In Mexico, Aguayo added, the sexism that women are subject to only increases when they become mothers, as judgment, expectations and pressure only become that much greater. According to the Runa HR survey, 64.9 percent of women confirmed that having children is an important factor in the gender pay gap. Likewise, 74.2 percent believe that women taking a break from work to raise children and then rejoining the workforce in the future impacts their earning potential.

When women leave to raise their children and return to the workforce, Founder and CEO of Runa HR Courtney McColgan said, they never reach the same level of pay against a man who never stopped working. “If paternity leave were the same as maternity leave, we would be demonstrating the need to have both parents contributing to the family and not just the woman,” she added. 

“Employers still have stereotypes about the value of mothers as workers. There is social science research that shows that if a woman becomes a parent, employers are likely to see her as less capable and less committed to work,” Emily Martin, General Counsel and Vice President for Education and Workplace Justice at the National Women’s Law Center, told CNBC in 2019.

The tech industry, Uribe added, has pioneered many good practices to promote gender equality, such as the promotion of parenting policies. Back in 2015, when Facebook CEO Mark Zuckerberg had his first child, he took a two month paternity leave, something he repeated two years later when his second child was born. “If this did not happen, it would not have trickled down. If you are a man and your male boss does not do it, you would not do it either," Uribe argued. This not only set an example for other tech companies striving for top talent but also boosted similar initiatives in places like San Francisco, which in 2016 became the first US city to mandate fully paid parental leave. “To have a male Fortune 500 CEO say he will take two months of paternity leave and tout its benefits for children and families is the sort of leadership by example that is necessary, both to get more men to follow suit and to help female executives feel they can do the same”, wrote in 2015 reporter Jena McGregor for The Washington Post.

Facebook currently offers four months of paid leave to both male and female employees. Google, meanwhile, offers paid maternity leave ranging from 18 to 22 weeks, while fathers and adoptive parents receive seven weeks of paid leave. Employees also receive a cash gift when a child is born. Microsoft is another tech giant that also offers 20 weeks of fully paid leave to mothers and 12 weeks to fathers, including adoptions and foster placements. Twitter, Spotify, IBM, eBay, Deloitte, Amazon and Netflix are some of the companies offering this, as well.

“We have to start by recognizing that there is a gender gap. It is a commitment that we must all have, from the highest organizational levels to the lowest. Only by achieving diversity will we be able to make a change and, as a consequence, there will be better public policies and companies will be able to create and generate more flexible solutions”, stated Anna Aguilar, Head of Growth at Stripe Mexico.

Andrea Villar Andrea Villar Journalist and Industry Analyst