Equal Pay for Equal Work: Are MFIs Paying Women Employees the Same as Men?

>Posted by Josh Goldstein aka Mr. Provocative

What do we know about gender wage equality at microfinance institutions? Is greater operational efficiency at MFIs achieved in part at the expense of women’s pay? Discrimination against women as employees is pervasive around the world.  For example, in the United States, it was only in 2009 that the Lilly Ledbetter Fair Pay Act became law. Even today, American women continue to earn significantly less than men for comparable work—77 cents to every dollar, according to some studies. I have looked around for evidence that MFIs are conscious of this issue, but my research uncovered no clear insistence for compensation equality for the employees of microfinance institutions from either social investors or industry standard setting groups. In fact, the issue isn’t discussed or even raised.

The highly regarded and influential Social Performance Task Force (SPTF) recently adopted Universal Standards for Social Performance Management, which sets social performance goals for MFIs. The standards are representative of this striking silence on the issue of gender wage equality. While the document includes treating “employees responsibly” as one of the six key areas that must be addressed, it merely affirms blandly: “5a.2 Employee compensation levels constitute a living wage for employees.” It is only in the “Additional Good Practices” annex that the SPTF is more expansive about management standards when it comes to employees, but even then it does not specifically address wage discrimination, see the following:

“5a.5 The institution bases employment decisions on the principle of equal opportunity and fair treatment regardless of sex, ethnic background, race, age, disability, descent including caste, religion, sexual orientation, or HIV/AIDS status.
5a.7 The institution takes documented action to hire and promote qualified women and achieve representation of women in leadership positions (e.g., encouraging internal and external job applications from women, setting goals for women’s employment, and mentoring women employees).”

And these measures are merely “recommended but are not essential to strong social performance…” according to the task force!

I believe that without clear standards being set for gender wage equality, it is likely to be neglected as the pressure on MFIs from investors to achieve greater operational efficiencies continue to grow. Keeping women underpaid may be one unfortunate way of doing this.

Am I right that such employee discrimination is commonplace? I invite readers to prove me wrong. Nothing would make me happier. If there is a gender pay gap at many MFIs, the microfinance industry should correct itself. Paying women less is inconsistenent with the industry’s values.

Image Credit: Great Leadership
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