3 countries striving to close the gender pay gap

Historically, the working world has mirrored wider society with regards to equity or lack thereof, and achieving pay equity between men and women remains a struggle. In fact, according to The Guardian, a new report from the World Bank has revealed that “no country in the world affords women the same opportunities as men in the workforce,” and sadly the global gender gap is far wider than previously realised.

What is the gender pay gap?

The gender pay gap refers to the fact that globally, women are paid less than men. Race also plays a factor, with white men being paid the most of anyone, and women of colour being paid less than white women.

The pay gap is an issue around the world. In 2021, the EU average gender pay gap was 12.7%, while according to Forbes, in the United States, women earn on average 16% less than men. Black and Hispanic women in rural areas earn 56 cents for every dollar earned by their white, male counterparts; Latinas make 55%; and Black women earn 64% of what non-Hispanic white men do, while Native American women are generally paid only 59 cents per white man’s dollar.

Disabled women experience further pay inequity, with the disparity between salaries paid to non-disabled women and women with disabilities ranging from 8% to 18%.

Why does the gender pay gap exist?

The gender pay gap exists for a number of reasons, including the fact that women do more unpaid labour such as housework, raising children, and caring for family members, as well as the fact that women are often employed in lower-waged sectors, are more likely to take career breaks due to familial responsibilities, and hold fewer senior management and executive positions due to both the aforementioned factors, and to ingrained social biases and discrimination. According to the Pew Research Centre, almost half of women working in the United States say they have faced gender-based discrimination at work.

Race and disability status are also factors that result in women being paid less, due to institutionalised racism, bias, and inclusivity issues.

These sobering statistics highlight the continued importance of fighting for workplace equity for all and paying close attention to the effective methods and actions being taken by the countries leading the charge for fair compensation and equality.

Which countries are closest to closing the gap?

Despite no country yet managing to close the gender pay gap, there are a total of nine countries that have closed their pay gap by at least 80%. These countries are Iceland, Norway, Finland, New Zealand, Sweden, Germany, Nicaragua, Namibia, and Lithuania.

Now let’s take a look at three of these countries and what they’re doing to achieve pay equity.

Iceland

Iceland is the world’s only country that has closed over 90% of its gender gap. In 1975, almost 90% of women in Iceland went on strike to protest gender inequality, a landmark effort which resulted in the passing of the Equality Act in 1976. In 2023, Icelandic women and non-binary people again went on strike, once more protesting the pay gap, as well as systematic gender-based violence. Iceland consistently ranks highly for global gender equality, and was last year named the most gender-equal country in the world for the fourteenth year in a row.

The Icelandic government’s commitment to gender equality has seen the country closing the gaps in both healthcare and education, incorporating more women into the workforce and leadership positions, and heavily subsidising childcare, thus freeing more women to return to the workforce. Companies with more than 25 employees are obliged to prove they are paying their employees equally, and mothers and fathers both receive six months’ parental leave and 80% of their pay. These steps have seen this tiny nation rapidly excel and set an international standard in the field of gender equity.

Namibia

After achieving independence from Germany in 1990, the West African nation of Namibia included gender equality in its constitution, and a gender equality policy introduced in 2013 ensures an equal proportion of men and women in the Namibian parliament.

Now estimated to be 80.2% closed, Namibia's gender gap ranks it eighth smallest in the world. Women holding positions at the helm of three of the country’s national banks, as well as significant government positions have helped to promote female empowerment in Namibia.

In the World Bank’s ‘Women, Business and the Law’ index (2021), Namibia achieved a perfect score regarding laws affecting women’s decisions to work, inheritance and property.

New Zealand

A current trailblazer of gender equality on the global stage, it’s no surprise to see New Zealand on this list, with a gender pay gap of 8.6%. The country has 91.7% of necessary legal frameworks promoting and monitoring gender equality.

The New Zealand government has developed the What’s My Gender Pay Gap? tool which shows the gender pay gap across sectors, and can also be used by employers to discern steps they can take to close the gap.

It is important to note, however, that the gender pay gap for Wāhine Māori, Pacific and Asian women, and disabled women is notably higher than the general gap. Kia Toipoto – Public Service Pay Gaps Action Plan 2021–24, the government’s new action plan, seeks to close the gender gap as well as the gap experienced by these minority groups, and support women from underrepresented communities to excel.

Are you seeking to pay your employees fair, competitive salaries, no matter where in the world they are? Get in touch with our team today, to find out how our Salary Benchmarking service can help.