Motherhood and the Gender Earnings Gap
During the last decades women have seen a modest progress in their quest for financial equality. Data from the US Census Bureau show that in 1979, women earned only 64% of men’s average earnings; by 2016, the earnings gap has shifted to 80 % in average (although it fluctuates according to ethnic group and age). If this current trend prevails, it will take more than 70 years to close the gender wage gaps completely.
Even though couples today have similar educational levels, which contribute to reducing the partner wage gap in comparison to prior decades, the disparity between men and women widens drastically around the birth of the first child and continues widening for at least the following five years. Moreover, multiple children represent a wider the gap. Why does this happen?
The reason behind this persistent disparity is the fact that regardless of certain changes in societal roles, in general, more women step back from their careers in response to childcare demands. In contrast, men usually continue to climb the professional ladder. This pattern leads to steadily growing income for men, while women put their career on hold and have temporarily non-existent wages. The effect of this pattern is an uneven playing field that never levels off, even if the mother returns to work later on.
Women, on average, still undertake full responsibility for child rearing, and that responsibility is associated with a lower extent and continuity of market work. Additionally, the double- burden influences the choice of occupation and working conditions, as women seek those that facilitate combining work and family.
Childbearing age has been found determinant for women to be able to bounce back into the professional ladder, and diminish the earnings gap, according to the Center for Economic Studies. Women who have children before the age of 25, or older than 35 have a smaller impact in their income than women who have children in their late 20s and early 30s. Research has shown that women who have children later in life have higher long-run earnings than those who have children earlier. Older mothers, tend to have more schooling and experience, and thus, may be already working in higher-paying positions, which narrows the pay gap to be bridged when they bounce back to work. Having only one child also makes it possible for women to close the spousal wage gap because the absence from the labor force is shorter.
A recent study with MBA graduates points out that while the earnings of men and women start off approximately equal, the income of female MBAs gradually drops as they have children. This is due to career discontinuity which affects their wage growth rate; less experience due to the gap years; and shorter work hours, as many opt for part-time jobs to balance work and family life.
Mother’s Day is coming up and it is a great opportunity to reflect on the many ways we can all contribute to creating a more egalitarian society. It’s a fact that there is a slow but steady transformation of the traditional division of labor in the family. Many women with children play an important role in the labor force and in global economies and men are becoming more aware of their child care duties and household responsibilities. Regarding the corporate world, there are many effective practices that can be implemented to eliminate the gender earnings gap and foster gender equality:
o Implementation of paid maternal and paternal leave can help share the responsibilities of childbirth and retain women in the workforce.
o Providing daycare and breastfeeding schedules and /infrastructure.
o Promoting remote work and Flextime which allows a better balance between professional and personal life for both partners.
o Assuring equal pay for the same responsibilities.
When corporations transform their workplace practices and culture, it has a positive effect on society in general. Women become more empowered in their family life and financial decisions. Girls become more inspired in their education and set their sights higher.
In a nutshell, we all need to shape societies where everyone can thrive on equal basis. Public and private entities need to focus on eliminating disparities in paternity and maternity rights and in implementing gender-inclusive policies. Although many corporations in the United States grant a maternity leave without payment, this still contributes to unequal earnings in the long run. Collaboration is the key to sustainable development — hand in hand, men and women can build a better world for future generations.
Angélica Fuentes, Founder Equal Invest
Angélica Fuentes is a Latin American businesswoman and impact investor, who has been recognized by Forbes Magazine as one of Mexico’s most influential women.
Ms. Fuentes was appointed CEO of Grupo Imperial in 1992 and quickly positioned the company as a top player in Northern Mexico’s energy sector. Under her leadership, Grupo Imperial’s annual growth rate increased from 5% in 1992 to 9.5% in 2005. Ms. Fuentes served as President of the Business Energy Network of the Asia-Pacific Economic Cooperation Agreement (APEC) from 2002 to 2004, and as President of the Mexican Natural Gas Association from 1996 to 2000. From 2007 to 2015, she served as CEO of Grupo Omnilife-Angelissima-Chivas. Under her leadership, the company became one of the top 100 corporations in Mexico.
Throughout her career, Ms. Fuentes has dedicated significant time and resources to NGOs, international organizations and professional groups that support the cause of women. She participated in the World Economic Forum’s Gender Parity Programme, and led the Mexican Gender Parity Taskforce. She currently serves on Secretary Clinton’s International Council on Women’s Business Leadership; is member of the Private Sector Leadership Advisory Council of UN Women; is a Global Advocate for the Girl Up Campaign, a United Nations Foundation program; co-chairs the PVBLIC LATAM regional platform; is member of the Latin American Program Advisory Board of the Woodrow Wilson International Center; and is member of the Global Dignity’s International Council of Advisors.
Her work in this field has been recognized by numerous honors and awards. In 2015, UN Women gave her the Women’s Empowerment Principles CEO Leadership Award; she was the first female CEO to receive this award for championing gender equality in the private sector. In 2016, PVBLIC Foundation, Ismael Cala Foundation, and the United Nations gave her the award for Latin Woman Empowerment. In 2017, she received the Corporate Social Responsibility Award from The Maestro Cares Foundation.
Gender equality, women empowerment and the eradication of poverty have always been a priority in all her endeavors. In 2014, she established the Angelica Fuentes Foundation. In 2016, she founded A Complete and The Imperative Fund. In 2017, she founded Equal Invest, The Beauty Station and A Complete Journey.