Tuesday, March 8, 2016

The Colombian Labour Market behind Female Participation in Management

By: Carolina Herrera-Cano (IB, MIB)*
Analyst at the Observatory in Trade, Investment and Development
Lecturer of Ethics and CSR at Universidad EAFIT

Women’s rights are increasingly becoming an important trend for governments and civil society and, with the purpose of monitoring their advances, different indicators are being used. Although gender gaps have narrowed in many ways –according to the United Nations Millennium Development Goals Report, goal 3 (to promote gender equality and empower women) made important progress in terms of education, employment, and political representation-, some gender disparities have deteriorated, sometimes even as a result of others’ improvement. Accordingly, indexes evaluating the status of women’s rights around the world may present contradictory scenarios (United Nations, 2015). Those figures do not only show the multiple challenges women’s rights still have in a global scale, but they are the evidence of a need to have a closer look to gender equality indicators even in countries were figures seem to indicate positive scenario for women’s rights (WEF, 2015).

The Global Gender Gap Report (GGGR) quantifies gender-based disparities in four categories: Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment. According to this assessment, countries with the highest equality between men and women are Iceland and Norway. Yet, it is useful to analyse them in a deeper way four categories in these countries. Iceland ranks 1 in three of the four categories but has a surprising 105 position in health and survival index. This is also the case of Norway with a 70 position for health and 32 for educational attainment. However, Norway’s performance in economic participation (2) and political empowerment (3) makes it the second most equal country in terms of gender.

According to the GGGR, Colombia has faced important improvements in terms of gender equality. The country has moved up 11 positions (from 53 to 42) in the ranking, far from Mexico (71), Chile (73) and Brazil (85), and has effectively closed 74% of its gender gap. More surprisingly, in the words of the Inter American Development Bank (IADB) (2016), this country, along with Jamaica and St. Lucia, has an outstanding position in the continent due to its larger share of women in managerial positions. This situation has also been documented by the United Nations Development Programme, which highlights that only in five out of 35 developing countries included in their data; women constitute 30% or more in decision-making positions (UN Women, 2015): this result also includes Colombia, and Botswana, Costa Rica Croatia, and South Africa.

Nevertheless, women participation in managerial positions hides important challenges for the Colombian labour market. Actually, the IADB recognizes the remaining glass-ceilings women still have to fight with even in Jamaica, St. Lucia, and Colombia: even in these countries female representation is still low at the highest spheres of the companies. More importantly, for the case of Colombia, some authors attribute the increased number of women in management to unequal remuneration between men and women: as female labour is usually less remunerated, employers prefer to hire women in order to reduce costs. In fact, it has been found that women participation in management has only been reached in lower to middle positions, as higher levels are still occupied by men. Only 4% of the Colombian 100 largest companies have women in the top management (BBC Mundo, 2015).

This situation is consistent with Darity’s (1989) and Darity and Williams’ (1985) heterodox perspective predicting the effects of trade gender pay gaps: international competition and competition between companies use existing gender inequalities to reduce unit costs. In consequence, this phenomenon increases women participation in management at the expense of the perpetuation of wage gaps between men and women. This issue has also been addressed by the International Labour Organization (ILO). In its most recent report “Women in Business and Management”, the ILO highlights how despite women nowadays represent 40% of jobs worldwide; their wages are still lower than men’. In fact, according to the Global Wage Report, wage gaps remain significant around the world. Even though gender wage gaps have narrowed slightly in the last decade thanks to a declining in most of the countries with available data, Colombia, together with Australia, Finland, Mongolia, and Paraguay are the only countries where the gap expanded (UN Women, 2015).

Another important challenge for gender equality in Colombia which is also related to the labour market is women’s higher levels of poverty. This situation can be explained by two important reasons. The first is informal employment: in the country, more than 60% of the employed women work in the informal sector: this restricts women access to pension funds and safety conditions. The second is female unemployment. Unemployment rate in women over the past two decades has continuously been 5% higher than men unemployment (Sabogal 2009). In 2013, Colombian women presented an unemployment rate of 13,8% while this figure was 8,1% for men. Additionally, women engagement to labour markets has not been successful: while men’s labour force participation rate is 79,7%, women’s is only 55,8 percent. Furthermore, recent studies show a faster declining tendency in women employment in a variety of developing countries, including Brazil, Colombia Cost Rica, Philippines, and Republic of Korea (UN Women, 2015).

Although Colombian improvements in GGGR during last year can be explained by wage equality efforts (WEF, 2016), as it was possible to show, changes in country’s labour market will be fundamental in gender equality pursuit. The Colombian case is a great example of the importance to have a closer look to gender equality indicators. In spite of the need to engage women in decision-making processes of private and public organizations in 2030 Agenda for Sustainable Development (United Nations), when women participation in managerial positions coincides with (or can even be explained by) wage gaps, informal employment, and unemployment, it does no longer constitute a positive scenario for women’s rights. The existing presence of women in management market together with appropriate business, civil society and governmental efforts to promote equality in the labour market makes Colombia a country with a great potential to promote trade and economic development with a gender perspective.