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Virginia Policy Review
Decreasing the U.S. Gender Pay Gap: Promoting Gender Equality While Addressing the Economic Crisis By Ciara Rivera Abstract Despite increased opportunities for women, in the United States there is still a gender pay gap (England et al., 2020). Furthermore, closing the U.S. gender pay gap could potentially increase the GDP by two trillion, resulting in 4.7 trillion in Social Security savings (Pipeline Equity, 2019). The gender pay gap results from a number of market failures that threaten the U.S. democracy: social norms surrounding female gender roles, work culture perpetuating social norms, and inequality. This essay will further unpack the gender pay gap problem by defining and explaining the market failures and identifying the U.S. government actions already taken to address the problem. Inevitably, the aftermath of COVID-19 has potentially slightly reversed progress towards gender equality, however, there are opportunities for businesses and the new administration to take action. The essay highlights promising practices from a championing European country and businesses in the United States. The paper culminates with the policy recommendations promoting a favorable workplace environment that could lead towards gender equality. Incentivizing companies to promote gender equality in the workplace will increase the production possibility curve, and thus the country’s GDP, and consequently increase efficiency and decrease inequality. Introduction “We must remember that democracies can deliver majorities that actually — in the name of a democratic process — can impose restrictions on women's rights. If [democracy] shirks accountability for women's rights, it is a democracy for only half its citizens” (Bachelet, 2011) At the 2012 G20 summit, all member countries (including the United States), agreed to address gender inequalities (OXFAM & Wakefield, 2014). The G20 agreed to reduce gender gap participation rates between men and women by 25% by 2025 (G 20, 2014). However, an International Labor Organization analysis found that applying the 25% reduction by 2025 to all countries (not just the G20) could “raise global GDP by 3.9%, or $5.8 trillion globally” (International Labour Organization, 2017, p.18). Despite increased opportunities for women, in the United States there is still a gender pay gap (England et al., 2020). The most recent 2020 data indicates American women earn 81 cents for every dollar that men earn regardless of employment level and 98 cents for every dollar their male counterparts for the same type of job (PayScale, 2020). For
