Gender Gap In Upper Management And Low Wage Roles

Throughout history, the ‘role’ of a woman has been to take care of the duties at home. As time has evolved, women have been tasked to maintain their work at home, while participating in the labour force. This poses the question; does a gender gap in economics remain in the labour force? This essay will not only show that a gender gap exists, but also quantify just how tipped the scales are. As much as the wage gap between same role jobs has mostly shrunk, the underlining issue of a gender gap in upper-management, and low-income jobs has remained. Women are underrepresented in top management roles and overrepresented in low wage jobs, contributing to a wealth gap between genders.

There is no benefit to the gender gap in upper management. To begin, the gender gap in upper-management positions negatively impact women and families. Some of the key factors that withhold women from joining the labour force and discourage them from reaching for top ranking positions, is the overwhelming lack of women and family friendly organizational cultures, policies and practices. The gender gap drastically increases the higher the rank of the position. Women compose of roughly 45% of the labour force, making only a 10% gap. The gap grows to from 10% to 26% for mid-level managers, 46% for executives, 58% for board directors and an astonishing 90% gap for CEO’s, where woman only hold 5% of these positions in the S&P500 companies. This gap exists in Canada as well. Women hold only 10% of the 532 C-level executives among Canada’s 100 largest publicly traded corporations in 2018. C-level executives are highly ranked executives in the company such as, CEO, COO and CFO. Industries that have the largest underrepresentation of women is, technology, manufacturing, transportation, construction, real estate and mining (Goldblatt, 2018). Furthermore, gender parity in top ranking positions is essential for economic health. Studies have shown that diverse groups are better at problem solving than concentrated ones. Concentrated groups are groups where all members are alike. For example; all male group, all Caucasian group, or all straight group, to name a few. Performance improves in companies that have women representation in upper management positions. Companies led by women generally are less risky because of the way women perceive risk oppose to men. Less risk in a company possibly can lead to greater stability, maximizing shareholder wealth. In addition, increasing the average participation rate of women in the workforce would greatly benefit the global economy. According to a study by McKinsey & Company, if the average rate of women aged 24-54 in the workforce, currently 76% increased to 84%, GDP in the U.S. would grow by 3-4%. These statistics remain true globally, as women are underrepresented in top tier positions around the world. As of 2017, women hold only 18.56% of top manager jobs globally. The highest proportion of women in upper management positions is 32.75% in East Asia and Pacific, but as low as 5.39% in the Middle East and North Africa. This data shows that even in the regions with the highest representation of women in top management jobs, the gap remains, with an underrepresentation of women in such roles. All in all, the economy only seizes to benefit from gender parity in upper management roles.

Societal norms negatively impact woman in lower income jobs. Globally, women are overrepresented in low wage jobs. This means, positions that pay low wages have far more women than men.  Despite the fact that the women participation rate is approximately 45%, women hold roughly 60% of low-wage jobs that typically pay less than $11 per hour in the U.S. This gap increases to 70% for the lowest-wage jobs that pay less than $10 per hour. In addition, Women are more likely than men to be supporting children while in the low-wage workforce (Tucker, Patrick, 2017). 32% of women in the low-wage workforce and 25% of women in the lowest-paying jobs are supporting children. This is opposed to only 22% for men in the low-wage work force that also are supporting children and just 11% in the lowest-wage workforce. The overrepresentation of women in low-wage jobs remains across almost every education level. Women make up a larger share of the low-wage and lowest-wage workforce than men, at every education level, even though the participation rates are very similar or even higher than men. Women earn approximately 57% of undergraduate degrees and 59% of all master’s degrees in the U.S. (Warner et al, 2018). Yet, women remain overrepresented in the low-wage and lowest-wage jobs. Men are not the only source of income to provide for families. The over-representation of women in low-wage jobs has a negative hindrance on women’s purchasing power. This is a slippery slope as it causes a constraint of resources for women, which hinders their ability to save for future needs and provide for their children.

This essay has focused on the gender gap based on income between men and women, focused on inequality of distribution of job level. This gender gap goes beyond income, as it translates to an even larger gap in wealth. As shown above, women generally hold positions across industries that, on average, pay less than the occupations men hold in the same industries, causing a wage gap. This wage cap, overtime, translates into a wealth gap. The income gap, is the spread of women’s earnings in comparison to men’s. The wealth gap is the difference in the accumulation of assets and debt for a total net worth. The income gap makes it more difficult for women to accumulate assets and pay off debts which overtime leads to the wealth gap (Ruel and Hauser, 2013). Retirement savings is a key component of wealth, shows an even wider gap between genders. According to the Transamerica Center for Retirement Studies in 2017, women had an average of $42,000 in retirement savings, opposed to men who hold roughly three times the amount of $123,000. The income gap extends past retirement as it results in a difference in social security benefits. Women average roughly $11,000 in social security benefit (example: CPP and OAS), compared to men who average $15,000 in social security benefit. Debt also significantly impacts wealth. Student loan debts have the largest burden on women, as they represent 56% of post-secondary students, but hold nearly 67% of outstanding student loan debt. Debt inequalities stretch beyond student loans. Total indebtedness for woman greatly outweighs that of men. Women’s outstanding debt balances outweigh that of men in all categories. Student loans, auto loans, credit card balances and medical bills.  Part of this gap can be explained by borrowing and spending habits. However, there is no denying the underlying issue of the income gap transpiring to a wealth gap, negatively impacting women’s standard of living in retirement.

The idea, that the male is to be the breadwinner to support the family constrains women from striving for top executive roles and settle for lower-income jobs. The issue across the globe remains, that women are underrepresented in upper management roles and overrepresented in low income jobs, resulting in a wealth gap between genders. In order to obtain gender equality, massive steps need to be taken towards social, political and economic changes. These changes will help put supportive measures in place regarding parental leave and child-care programs to support women (Connelly, 2015). For these changes to happen, we, as a society, must first have a change in attitude of the competence of woman to hold high level jobs. We also need to stop with the societal mindset that segregates women to be the predominant care givers, while holding a low-wage job, while the male’s main role is to be the breadwinner. There is only upside to gender parity. Increasing the percentage of women in upper-management roles and decreasing the percentage of women in low-wage jobs will reduce the inevitable wealth gap that currently occurs. In turn, gender parity will strengthen the economy along with women’s quality of life. To conclude, gender parity is not something that benefits women, it benefits everyone.

References

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• Tucker, J., & Patrick, K. (2017, August). LOW-WAGE JOBS ARE WOMEN’S JOBS: THE OVERREPRESENTATION OF WOMEN IN LOW-WAGE WORK. Retrieved March 2020, from https://nwlc.org/wp-content/uploads/2017/08/Low-Wage-Jobs-are-Womens-Jobs.pdf
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