Equal pay for equal work

Dr. Dileni Gunewardena, Senior Lecturer in Economics, University of Peradeniya

A recent British film, Made in Dagenham, tells the (true) story of how a walk-out in 1968 by 187 women from a car manufacturing plant in a suburb of London eventually led to the Equal Pay Act of 1970 in Britain.

The women were sewing machine operators, stitching car seat covers for the Ford Motor Company. At that time, Ford had four grades for production workers: male-skilled, male -semi-skilled, male- unskilled, and female. When the female sewing machinists discovered that they were being paid 13% lower than unskilled male toilet cleaners and stores workers, they decided to walk out, and vowed not to resume work until their demand for equal pay was met.

Crucial in the resolution of the strike-and in the fight for equal pay-was the position taken by Barbara Castle, the Secretary of State for employment. Against government advice, she created history by arranging a meeting with the striking sewing machine operators.

In the film, she’s told by her staff “It’s never been done before-it will just give credibility to their cause”. “They don’t need me to give credibility to their cause”, she replies caustically, “their cause is credibility enough”. She meets the women, and persuades them to go back to work for 93% of the unskilled male wage rate, with the promise of 100% phased over two years. She made good her promise, steering the Equal Pay Act-that made it illegal to have different pay rates for men and women-past a reluctant Chancellor of the Exchequer, unions and employers, and into law in 1970. The law came into effect in 1975.

A few years later, Sri Lanka passed similar legislation. Unfortunately, legislating equal pay did not mean that discrimination in pay on the basis of gender ceased to exist. Though it is illegal for men and women to be paid different wages for the same work, this practice continues in Sri Lanka in the informal sector, especially in agriculture, where monitoring of pay is difficult.

A CENWOR study of tobacco and cinnamon trades indicates that discriminatory pay practices exist in these industries (Guneratne 2002). Gender wage discrimination exists when women work longer hours per day for the same daily wage rate as men, as sometimes happens in the plantation sector. Cultural norms that males, as breadwinners, must be paid more than females, sometimes contribute to this practice of paying different wages in the same sector.

Unskilled work

Differentiation of tasks by gender-or the segregation of women into devalued jobs-is another source of wage discrimination. This, in fact, was the grievance of the sewing machine operators of Dagenham. At the Ford plant, only women sewed car seat covers, and this was considered unskilled work, when in fact, it was a skilled job. What these women really wanted was re-grading of their jobs so that their wages would be equal to the male semi-skilled (C grade) rate.

They only received this after more industrial action in 1984 and after Margaret Thatcher had been forced by the European Commission to pass ILO Convention 100 or “Equal pay for work of equal value” into law. While the West has seen a reduction in occupational segregation over the last few decades, and while this has led to reduced gender wage gaps, the same is not true in developing countries. In fact, micro studies and anecdotal evidence indicates that when male migration and male recruitment into armed services left a lacuna in the villages, women took over traditionally male tasks, such as ploughing with tractors, but were still paid “female” wages.

Gender wage inequality exists when traditional roles prevent women from physically moving from lower paying areas to higher paying areas. Gunatilaka (2003) found that female tea sector workers do not move from Nuwara Eliya (where wages are lower) to Kandy (where wages are higher). On the other hand, she found that higher wages in masonry for unskilled males led to higher female wages in the paddy sector.

While conventions and legislation focus on inequality in terms of work or the value of work, economists go further. In fact, since 1973, when economists first began to measure discrimination, it not defined in terms of the jobs being compared, but by the productive characteristics of workers. When “otherwise identical” men and women are paid different wages, i.e. men and women who are identical in schooling, experience, training, ability, in other words in every respect that matters to one’s job except whether one is male or female, discrimination is said to exist.

Although Sri Lanka is said to have the second lowest pay gap in the world, this “average” pay gap masks large differences in pay across the distribution of wages. A study by a team of economists from the University of Peradeniya found that the gap between men and women who are in the lowest decile is as large as 21%, while at the higher end of the distribution, particularly in the public sector, women are paid better than men. These women do not have it good, though. When you compare them with “otherwise identical” men, it turns out that women are underpaid by almost 10% (Gunewardena et al. 2009).

Solution

How can gender wage discrimination be reduced? Legislation is only useful if legal action is taken-and this is rarely the case in countries like Sri Lanka. Tools like job evaluation and compulsory pay audits, which are used in developed countries, can only have a limited effect in countries like ours where a large proportion of the jobs in which women engage are in the informal sector.

What can work is the introduction of a national, across the board minimum wage to replace the existing range of minimum wages that are set across 39 wages boards. A national, well-publicised minimum wage will disproportionately benefit women because women disproportionately occupy the lowest rungs in the job market and thus have the lowest wages. Britain’s wage gap is said to have diminished after the introduction of the minimum wage, introduced there by the labour government in 1999. Much though we dislike emulating Britain, the time might be right to do so again. Meanwhile, Sri Lanka could do with a Barbara Castle. Or two. Or three.