>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
Have you read?
The Universal Standards have been finalized!… What’s next?
U.S. Women Senators Unite in Support of the Women of Grameen Bank
Facebook
Twitter
5 comments
Comments feed for this article
September 4, 2012 at 5:54 pm
Peter van Dijk
What the authors, together with most if not all champions of Microfinance, seem irrelevant is whether MFIs contribute to incomes that allow people to live a decent life. And on 1,2, 3 or even 5 US$ a day people cannot live a decent life.
Yes, equal standards for men and women are important, as health, environment, insurance and technology are important, and one can make a twist in words that create another trend that brings more wealth to established microfinance donors and consultants for the next couple of years.
After decades leaders in Microfinance still haven’t start working on realising the key potential of Microfinance, namely for all to manage money safely with organisations that are held liable for such safety and quality. With that commitment MFIs will get the stature and network to also advocate for higher incomes, enforced labor contracts and continuously improved social welfare systems (with sustained tax income for governments).
Many readers of this article will sigh “what nonsense is this”, ignoring the role that banks and business leaders have in societies.
September 25, 2012 at 2:48 pm
Joshua Goldstein
Peter, glad you agree that equality of pay is a worthwhile cause.
I disagree about your profoundly negative view of microfinance, writ large. I continue to believe it has done much good.
But at times, it has gone off the tracks!. And the Center’s Smart Campaign has made client protection the focal point of our work to protect against industry abuses going forward.
September 26, 2012 at 3:22 am
peter van dijk
Dear Mr. Goldstein, you have not read my comment, in which I explain the true potential of MF. That is a serious weakness for a blogger as yourself. It is also not enough that some people subjectively “believe” that MF have done any good.
Mr. Goldstein, if MF is to contribute its part in poverty reduction, then its activities and support should be provided within a system that it collects, reports verifiable data and in which clients are protected and have effective access to the legal system. Above all,government is responsible for protecting and enhancing the well-being of its citizens, including the equality of men and women.
Your argument that “at times, it (MF) has gone off tracks!” you only refer again to anecdotical evidence that comes in the press. Again, the issues you write about, if your work is to contribute to change, then it needs to be part of systematic real change that all can easily verify and discuss.
Please change from publishing subjective emotional incidental criticism to contributing to change and improved governance in the world.
September 7, 2012 at 10:40 pm
Valerie Artese
The silence on this topic is deafening. Thank you Josh for bringing attention to equal pay for women, an obvious but ignored indicator of social performance. It will be interesting to see what data arises. But I fear that you may be proved right and pressure for efficiency will be the excuse for continued wage discrimination, even in institutions with high social performance ratings.
September 25, 2012 at 2:50 pm
Joshua Goldstein
Thanks Valerie. Perhaps some experienced researcher can take this topic on and fill in the blanks.