Pay Inequality a Moral and Ethical Issue in Business

Pay Inequality

Pay equality has for the longest time been one of the most hotly debated topics in the corporate world. When the Equal Pay bill became law in 1963, women were averagely earning just 58.9% of what men were averagely being paid, according to the congressional committee that tabled the bill. In 2011, this percentage had increased to about 77% of what men were averagely being paid for full-time work. These statistics show that there is a somewhat entrenched mentality of paying women lower wages for a job that men would be paid higher for, despite the fact that many firms are claiming to have put in place measures to bring about gender equality in their workplaces (Dontigney, n.d.). This paper examines the issue underlying the equal pay between men and women.

Moral Arguments

Some human resource managers have argued that the difference in pay between women and men for the same work done is because of the varying return on investments. This argument is based on the belief that female employees are likely to forego investing in gaining more skills in preference of other uses of investments time and money, such as in housework. Men, on the other hand, are believed to be more likely to make investments in improving their skills for the purposes of increasing their productivity, and thus, should be paid more. Another theory on the issue is based on a structural viewpoint and it examines the labor market where one is employed. From this viewpoint, the economy is perceived as being dualistic and made up of competitive and monopolistic companies, and its labor market is divided into two; the primary and secondary segments (Bluestone, Murphy & Stevenson, 1973). In this structural argument, an individual's position determines his or her income. And thus, monopolistic companies are likely to be paying more. Jobs that are also in the primary segment of the market also pay more generally. It is then argued that since men are the ones who form the majority of those employed in monopolistic companies and the primary segments of the economy, they will likely be earning higher salaries or wages than women in the competitive businesses or secondary labor markets (Grey-Bowen, 2010).

Economists' explanations for the discrepancy in pay of men and women have traditionally been based on two arguments. According to researchers Juhn, Murphy and Pierce (1991), these arguments are based on factors that are gender specific, in that, they refer particularly to men or women, either in terms of the treatment they are given or their qualifications. In terms of qualifications, the human capital model is particularly useful in showing the potential role that could be played by both experience and education. The traditional family division of labor is based on labor, meaning, females are more likely to have lower experiences of labor compared to their male counterparts. Moreover, it was also postulated that since female workers often expect shorter and discontinuous work lives, they often have less motivation to invest in formal training or other advanced courses to increase job competency, thus, the lower pay they get (Blau & Kahn, 2007).

Other experts are, however, of the opinion that female employees don't get what they want for the simple reason that they do not negotiate or speak up (Parcheta, Kaifi, & Khanfar, 2013). Researchers Babcock and Laschever (2003) are of the opinion that women often view their situations as being less negotiable than they actually are. The researchers also argue that women are usually of the opinion that someone else is in control of their circumstances (Babcock & Laschever, 2003, p. 12). These reasons explain why the women end up getting lower pay rates. Other experts argue that household work, or bearing of children and caring for them leads to discontinuous employment, and the women usually have to start again every time they reenter the workplace (Gayle, Golan, & Miller, 2008). Female employees are also likely to retire earlier, compared to men (Parcheta, Kaifi, & Khanfar, 2013), leading to them not only being paid lower wages, but also being less likely to be employed.

Arguments from the Opposing Side