The Hidden Economic Threats of Gender Pay Inequity in Brazil and Beyond (Four-Part Series/Article 2/4)

In the first article of this four-part series, you met some of the truly outstanding Brazilian professional women in Carreira Feminina, a new book for which I wrote the forward. In the book, each woman describes a challenge she faced in her professional life: Lack of recognition; career choice, realignment, and reinvention; work-life balance; the fight for the right of education; salary equity and the Teto de Vidro; and Machismo. 

In this article, you’ll discover some facts, figures, and observations about three very real challenges facing women in Brazil (and indeed, worldwide): Gender pay inequity, the glass ceiling, and Machismo… and understand the damaging economic effects these pervasive challenges present.

According to Baker McKenzie’s 2018 report, Spotlight on the Gender Pay Gap in Latin America, “gender parity has a fundamental bearing on whether or not economies and societies thrive. Developing and deploying one-half of the world’s available talent has a huge bearing on the growth, competitiveness, and future-readiness of economies and businesses worldwide.”

While gender pay inequity draws more attention, that attention isn’t generating significant progress: studies consistently show that even when controlling for factors such as experience, education, industry, and hours, women and men are paid differently. The World Economic Forum’s Global Gender Gap Report 2020 isn’t optimistic about a quick fix for entrenched gender pay inequity, concluding that gender parity will not be attained for 99.5 years. According to the WEF’s analysis, “none of us will see gender parity in our lifetimes, and nor likely will many of our children.” 

This chart depicts WEF’s estimates about how many years regions worldwide will take to reach gender pay parity. While the WEF’s report shares promising developments--as you’ll discover below—we must put those developments in context. It’s quite simple: Policies that promote diversity and inclusion are most likely to build bottom lines. 

“Creating a diverse and inclusive workforce is a business imperative for global employers. A diverse and inclusive workforce enables a wider talent pool, helping to plug skills gaps, drive innovation, enhance profitability and improve competitiveness… [and] investors are becoming more focused on the issue [as] intensifying media attention [drives] the global conversation around diversity and inclusion.” (Baker McKenzie)

In LATAM, the percentage a woman earns compared to a man in Colombia, Peru, Venezuela, Brazil, Chile, Mexico, and Argentina is between 68% and 49%. For every dollar a man earns in these countries, women earn from 0.49 to 0.68 cents. Brazil itself ranks 119th in a list of countries for wage equality for similar work, reports the World Economic Forum survey referenced above. Human Rights Watch reports that at the current pace, Brazilian women with formal jobs will receive the same wages as men only in 2083. In practical terms, that means girls born today will work for equal pay around the time they turn 65.

Underrepresentation of women on corporate boards or in senior management roles means that few women are even in positions to champion gender pay equity initiatives. In Brazil, the percent of women on corporate boards is 8.4; in Chile, 8.2%; and in Mexico, 7.4%. At a paltry 15.1%, Columbia has LATAM’s highest percentage of women on corporate boards. (By comparison, France, Iceland, and Norway have the highest percentages of women on corporate boards, at 43.4%, 43%, and 42.1%, respectively. The U.S. has 21.7%.) 

Adding women to workforces worldwide isn’t only about women’s rights or human rights. It’s also about propelling profits. In Brazil’s case, the ILO estimates that eliminating the gap in the rates of employment between men and women would add 382 billion Reals (about $117B) to Brazil’s economy, or 3.3% of GDP. The International Labor Organization offers a map that depicts how much the economy in every country would grow by closing the gender gap—in both wages and women’s representation in workplaces. 

Looking ahead—both to the future and the concluding article of this series—the Baker McKenzie report reveals that the greatest obstacle in the way of eliminating the gender wage gap is women’s under-representation in jobs created by Fourth Industrial Revolution technologies. For example, just 12% of professionals in cloud computing are women; in engineering and Data and AI, the numbers are 15% and 26% respectively. 

At MIT Professional Education, we’re seeing more LATAM companies promoting and engaging in online education for professionals of all genders—because it boosts bottom lines and enhances corporate knowledge, innovation, and competitiveness.

While the Fourth Industrial Revolution offers companies unprecedented opportunities to ensure women are paid equally, increased access to education will help bridge the gender pay inequity gap by better equipping women with improved skills or reskilling. Because women in particular benefit from the proliferation of online education, we must push the pace of digital transformation. Part three of this series examines how specific workforce strategies and access to advanced education can help achieve these goals.