The Gender Wage Gap in the United States: Current Policy and an Improved Approach for Closing the Gap

By Sareen Armani
2013, Vol. 5 No. 06 | pg. 4/4 |

Expansion of Nationwide Childcare

Scandinavian countries have long been known to promote equality through social benefits and have been leaders in closing the gender gap. Denmark ranks seventh in the 2012 Global Gender Gap Report, compared to the United States at twenty-second. Possessing an ideal childcare model that capitalizes on public provision, Denmark is revered for its generous social policies that prevent equality setbacks such as motherhood penalties. A majority of Danish childcare is in the form of public childcare centers and programs, but exists a small number of private childcare institutions that operate without financial support from the government (Rock, 2012). The public daycare service is free and available to children from twenty-four weeks to ten years of age. If parents wish to enroll their children in private childcare, the government pays a subsidy so that the parents never pay more than 25% of the total cost. 80% of Danish children aged zero to six are in childcare programs, while every child is guaranteed a spot in a childcare facility within three months of application (Work In Denmark, 2012).

Although the United States offers a federally funded Head Start program and an ACS subsidy to families with incomes under the State Income Standard, childcare remains to be the predominant barrier to employment. Head Start programs have extremely lengthy waiting lists and the ACS subsidy is limited to families with incomes at or below 200% of the State Income Standard. Parents, especially mothers, are still being penalized for having children by a lack of available and affordable childcare. Without adequate childcare mothers are removed from the workforce to care for their children, thereby losing any promotion opportunities or even their jobs because of a lack of job security. Jobless and caring for her child, an American mother must then attempt to look for a new job and will face a limited amount of opportunity due to the motherhood penalty. She will be evaluated by potential employers and will be labeled as a “mother,” who is stereotypically though to be less competent and committed in the workplace and thus left to work in less paying jobs. A tension between the ideal worker role and motherhood role thus exists in American society, “subtly [discriminating] against mothers when making evaluations that affect hiring, promotion, and salary decisions” (Correll, Benard, & Paik, 2007). The gender gap is consequently refueled.

By implementing policies for the expansion of childcare facilities including Head Start, mothers will not be punished for having children by being forced out of the workforce and having gaps in employment. Mothers will be allowed to reenter the job market in due time and economic output will increase.

Implementation of Paid Parental Leave

Consistent with the expansion of childcare policies, the United States must implement paid leave for citizens and legal residents who are parents. Similar to the example of Iceland earlier, Sweden, ranking fourth best on the 2012 Global Gender Wage Gap, provides working parents with a generous sixteen months of paid leave at 80% pay per child. Parents are encouraged to split this time evenly, and are give a bonus if they do. The salary cost is divided between the employer and the government. Extremely outdated in its approach when compared to other western countries, the United States does not have a nationwide paid parental leave policy in place today. Although a few states do provide a small amount of paid maternal leave, a nationwide policy is yet to exist. Business lobbyists prioritize the consequent employer burdens from such a policy as more important than job security for mothers and fathers, thereby combatting the implementation of such a policy.

Along with improved childcare, paid maternal and paternal leave will allow for job security, promotion chances, and the inclusion of mothers into the workforce without significant gaps in employment. This proposed policy would grant 104 weeks of unpaid shared paternal and maternal leave to all American citizens. Parents in all states will also have the right to sixteen weeks of paid paternal and maternal leave at 80% salary, provided by both the state and the employer equally. This policy will act in conjunction with the first proposal in that the government will provide that taxes companies with a substantial amount of occupational pay gaps. The government will provide incentives to companies: if a company’s occupational pay gaps compared to those of the national average calculated by Subdivision B are -10% or below (and this company is therefore not taxed as it is below the bracket of -2%), then the government will pay a higher ratio of the 80% salary due to the parents, thus paying 50% of the salary, while the employer pays 30%. For all amounts of -10% or below, the government will adjust the ratio it pays for the paid leave, such that a -23% company pay gap translates into the government paying 63% of the 80% salary and the employer paying 17%. Additionally, the government can use the funds it obtains through the taxation of companies outlined in the first policy to fund the paid leave outlined in this policy.

With an integrative approach, the companies will see it as incentives to provide equal work for equal pay, as they will not be taxed by the first proposed policy and they will receive government help when providing paid leave to its employees by this policy. By implementing a paid leave policy that can perhaps fund itself through the usage of aforementioned policies, parents, especially mothers will be given job security, reentry to the workforce, and equality. By thus starting the erosion of any negative stigmas associated with working mothers, more mothers will enter the workforce without having to restart at a lower paying position, and the pay gap will start to close.

Expected Criticisms and Response

“The creation of a governmental branch dedicated to gender equality is too costly and unimportant. The taxing of companies with high within occupation pay gaps is an unnecessary burden for employers. The inclusion of gender in the school curriculum will serve no purpose in reducing the pay gap. The United States debt surpasses trillions of dollars and we do not have the necessary budget to fund the expansion of childcare facilities or the implementation of paid parental leave.” Yes, such a proposed range of policies from the taxing of companies to the expansion of childcare will undoubtedly create a heated war of words between businessmen, employees, economists, sociologists, journalists, and politicians such as these. But such a debate is absolutely necessary to jumpstart the narrowing of the pay gap and the attainment of equality for all, despite race, social status, age, or sex.

The creation of a governmental branch dedicated to gender equality is fundamental in closing the pay gap through an organized, systematic, integrative approach. Companies with a substantial amount of within occupation pay discrimination do indeed need to be taxed, as we have reached a point in our country where the endless, ravenous pursuit of money by few interferes with justice for all. Social punishments need to halt this continual process of discriminatory population stratification based on unfair socioeconomic standing related to gender and to other social categorizations such as race. There will of course be tax fraud that will occur on the part of the companies, however fraud is an unintended consequence of all forms of taxation. For this reason, Subdivision C will be responsible for the random verifications of taxes submitted by companies. Any discrepancies will be challenged in a court of law. In the end, the positive outcomes of such a tax imposition will outweigh the negative effects in terms of closing the pay gap and promoting equality.

For the inclusion of gender related topics within the school curriculum, there will be those who deny the importance of awareness. There will be those who will argue that discrimination is not even slightly part of the explanation of the wage gap and will therefore refuse to include discrimination in the curriculum. Even if some choose to believe such a point, there is no such thing as too much knowledge, and adolescents should not be barred from learning diversified points of views at such an age that is prime time for making sense of the world. We do not want an ignorant future generation but rather one that can take in and scan various explanations and reach accurate deductions.

Similarly, if the United States is in debt and should not have to fund the expansion of childcare or the application of paid leave for both parents, then it should cut spending from other areas such as weapons that now apparently kill children in school shootings. Instead of diverting money to capitalistic ventures that fill the overflowing pockets of the one percent, or to creating armies with licenses to kill, money should be given to fruitful investments that create positive profits for the majority. With the implementation of these proposed policies, current policies will no longer fund gender inequality by dismissing cases similar to that of Walmart.

Conclusions

The pay gap in the United States continues to linger at an astonishing 23%, partly due to discrimination. Whether intentional or not, discrimination continues to interfere with citizens of America, snatching away their equality rights. Industrial and occupational segregation, along with the devaluation of women’s skills keeps igniting the dreaded cycle of discrimination, keeping the pay gap at a rather faint yet vexing rate. European and particularly Scandinavian countries are ideal models of countries with working policies in place that pursue gender equality. Using such examples as foils to current American policies, our country clearly lags behind and therefore needs policy change to combat the stagnant pay gap of 23%.

While the task of closing the gap is a rather sizable one and not all pertinent issues are discussed within the scopes of this paper, a range of proposed policies might nevertheless help reduce the unequal pay present in our nation today. With the creation of a branch of government, the Department of Gender Equality, a workforce will be dedicated to the fight for equality and to prevent and measure discrimination instead of controlling it after it has occurred. Subdivision A, B, and C, will be dedicated to obtaining companies’ yearly pay gap analyses, calculating companies’ averaged pay gaps, and taxing companies exhibiting a substantial amount of gender pay discrepancies, respectively. Subdivision D will be responsible for the successful implantation of gender studies and discrimination into the nationwide school curriculum. Additionally, the government will expand free and low-cost childcare as well as help provide unpaid and paid parental leave. By both punishing discriminatory employers with taxes and incentivizing them with a higher proportion of paid employee leave, a duality can be used to nudge employer practices in the right direction.

With the nation divided over the current taboo of gender equality and discrimination issues, there are debates, hidden agendas, and misunderstandings that cloud and halt proper action to reduce the pay gap. The wage gap is indeed real, no matter its explanations. Current policies are not working to ensure equality for millions of women. The policies presented in this paper attempt to try something new and yield positive results.


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1.) In the context of this paper, it is quite ironic that the Declaration of Independence uses “man” to denote “human beings,” demonstrating a skew in society.

2.) 2011 Pay gap calculations = (48202-37118)/48202 = 23%

3.) The subdivisions are named as A, B, C, and D in this paper for simplicity

4.) A value of -2% is chosen instead of 0%, which would mean the company’s occupational pay gaps are aligned with those of the national average. This way, a decrease in the national pay gap will occur.

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