Here's an important reason the gender pay gap isn't closing

In almost every country, women are paid less for an hour’s work than men. The fact the gender pay gap definitely exists is well established.

The Workplace Gender Equality Agency even claims removing the gap could take 50 years in Australia, maybe more in some other countries - though your estimate of how long depends on the period you’re calculating from.

After some pretty good advances a while ago, things recently do not appear to be getting much better. This is despite major gains in some areas, like legislation and attitudes on discrimination.

There’s a lot of variation in how much the terms of employment are regulated or instead left to be set by markets or norms. The more discretion managers have to set pay and conditions outside of collective rules or regulation, the more scope there is for subtle, maybe even unintended, discrimination.

The gender pay gap is entrenched because of the strength and effects of the household division of labour, the gendering of work and the challenges regulating it. But what has made it especially resilient has been the move away from rules that constrain economic behaviour over the past three decades.

Why do gender gaps persist?

There have been major feminist campaigns in recent decades. Several institutions (such as unions) that were avowedly anti-female have experienced some substantial internal changes.

Watching a rerun of almost any television series made in the 1960s or 1970s leaves one struck by how many behaviours were considered normal then, but are unacceptably sexist now.

Yet gender gaps persist. Gender pay gaps fell in countries in the OECD between 2000 and 2013, but the average fall across the OECD was barely three percentage points, and in several countries (including Australia) the gap has widened.

Women at the top of organisations, relative to men at that level, experience a very large gap in pay. They are least likely to be subject to minimum wage laws and often exempted from certain labour laws. They are less likely to be unionised (especially when in managerial positions) and more likely to be governed by individual contracts.

So, in most OECD countries, the gender gap is larger for higher-wage earners than for middle or low-wage earners.

With that background, widening inequality in general would be expected to lead to wider gender inequality, especially as the main feature of growing inequality is the rise of the “super rich”, who are almost exclusively male.

More importantly, since the 1980s, many societies have experienced shifts toward liberal market policies - often described as “neoliberalism”. These have increased the role of the market in most areas of economic life, including employment law, public ownership, and product regulation.

Probably the main contrary trend has been in direct gender regulation, with laws passed in many countries prohibiting discrimination based on sex, pregnancy, or sexual preference. Sometimes laws have promoted employment opportunities for women. Individual rights have been strengthened, while collective rights have weakened.

Unions, and policymakers in the state, have become more supportive of (or at least less resistant to) women’s advancement, in part through the growing presence of women in significant positions in such institutions.

Ultimately, though, the weakening of collective rights, through the decline of union power and the loosening of employment protections, has harmed the relative position of women in ways that have offset gains through changing values and individual rights.

That is, trends in gender gaps reflect opposing forces. On one hand, there has been increasing “hands-off” approach to regulation through the resurgence of market liberalism.

On the other, there have been more supportive norms and regulation – although probably with declining momentum. But this occurs in the context of resistance to change in the gender segregation of the workforce and the relationship of women to the domestic sphere.

Women’s activism has indeed enabled progress to be made in norms and direct gender regulation, but it has not been directed to, or at least has not prevented, the growth of market liberalism that has reduced the influence of collective rules and regulation on pay and conditions in many areas.

Contradictory forces affecting the power of women have varied over time and space. These help explain the unevenness of progress toward equal pay, and the complexity of analysing power in relation to gender.

Policy directions

Moves toward gender equity have focused on several things: drawing occupations into regulation, attempting to break down barriers between segments of the labour market and better valuing women’s work in regulation. There have also been moves to preclude discrimination and harassment, promote equal career access, and minimise the scope for interference by the domestic sphere in career development.

The great gains for women have been made, and are made, through collective action.

But that action has a lasting impact only where it produces regulation that favours women’s employment opportunities and rewards, and brings workers clearly within the scope of such regulation.

It can only be said to be truly effective when segmentation in the labour market is broken down.

It also requires a challenge to the logic of market liberalism and to the problems that this creates for collective power.

This is an edited abstract from Women, Labor Segmentation and Regulation: Varieties of Gender Gaps, edited by David Peetz & Georgina Murray.