Men Earn 26% More than Women Currently: Women Winners in Trade Reforms

By Paneetha Ameresekere | Published: 2:00 AM Jan 18 2021
FT Men Earn 26% More than Women Currently: Women Winners in Trade Reforms

By Paneetha Ameresekere 

Trade reforms in Sri Lanka can result in larger gains in gross domestic product (GDP), poverty reduction and exports, particularly in sectors employing a higher proportion of women, the World Bank (WB) in a report, released on 23 November 2020, said.

The report was based on the presumption that the existing free trade agreement (FTA) with India will be deepened and a similar FTA with China will also be signed.  It was also released at the time the second wave of the COVID-19 Pandemic was plaguing the country.

Further, this WB report was released three days after the Finance Ministry announced, ie on 20 November 2020, new import tariffs covering at least 4,700 items, with retrospective effect from 17 November 2020 (See ‘Ceylon Today’s 23 November, 2020 edition) seemingly negating the underlying assumptions, led by economic gains for Sri Lanka in a trade liberalisation scenario, as envisaged in this WB report.

Nonetheless, the WB report said, ‘Textiles and apparel will experience the highest rate of labour demand expansion with large increases in employment of women in the context of trade liberalization.’ 

The report however said that currently, women earn lower median monthly wages compared to men across most sectors. Male workers earn more than female workers, on average by 26 per cent, it added.

Meanwhile, wage gaps continue to persist in favour of men despite women achieving similar or better educational attainments, the WB said. “Wage gaps are ‘also’ the largest among sectors where women are most employed – ie women employed in the agriculture sector. Women employed in the agriculture sector face the largest proportional wage gaps,” it added.

This has to be looked at in the context that women on average have higher educational attainment (in terms of mean years of schooling) in recent years or ‘decade-cohorts’ compared to previous generations, the WB said. Furthermore, rural women now have (1990s cohort) quite similar mean years of education compared to men in urban areas, the report added. 

This trend will aid to close the gender wage gaps if the descriptive evidence in this report will hold true in the projections for the future, it further said.

“Nevertheless, currently, as in many developing countries, women tend to work significantly more in jobs without pay in Sri Lanka as well. And 15 per cent of all employed women fall under this category, vis-à-vis two percent in the case of men,’ the report further said.

Women account for one-third of employment of 7.7 million workers and they are primarily employed in the low paying agriculture (including vegetables and fruits) sector. Male workers comprise 5.07 million (66 per cent) and female workers comprise of 2.63 million (34 per cent) of the working population in Sri Lanka, the WB said.

“Meanwhile, Agriculture (25 per cent), manufacturing (18 per cent), trade and commerce (18 per cent), and social services and others (12 percent) sectors are the four largest employers in Sri Lanka according to estimates from Household Income and Expenditure Survey ( HIES) 2016, which is the latest of such official survey details available and which are compiled by the Census and Statistics Department (CSD),” the WB said.

In this context, women in Sri Lanka who are mainly employed in the agriculture sector, comprise around 28 per cent (approximately 740,000) of all working women, compared with only 25 per cent in the manufacturing sector – approximately 650,000, social services and other sectors – 18 per cent (approximately 470,000) and commerce sector – 12 per cent (approximately 325,000), vis-à-vis, of the total jobs taken-up by women, it said. These sectors are also the four largest employers of women, the report said.

 “On the other hand, more than 50 per cent of men are employed either in agriculture, manufacturing or trade-related activities,” it added. 

Meanwhile, most jobs in the agriculture sector are found in districts outside the Western, North Western and Central provinces, the WB said.

And, manufacturing jobs are concentrated in the Colombo, Gampaha and Kalutara Districts in the Western Province; Kurunegala and Puttalam in the North Western Province and Kandy in Central Province, the report said. 

The jobs in the textiles and apparel sectors led by women workers are similarly distributed as the manufacturing sector, ‘which tend to demand similar infrastructure,’ it said. The level of urbanization is higher in these districts compared to the other districts or provinces in Sri Lanka. 

Further, trade and transportation related jobs are rather evenly spread out by districts, except for the Colombo and Gampaha Districts that employ a disproportionately higher share of jobs in this sector, the WB said. A similar profile with social services sector jobs (education, healthcare and domestic personnel) is observable, the report said.

Currently, public administration, public utilities and finance and business sectors have the largest average monthly wages (over  Rs 25,000); while the agricultural sector has the lowest estimated monthly wages with a little less than  Rs 15,000 nationally on average, the WB report said. 

Meanwhile, the average total monthly wage in Sri Lanka stands at approximately Rs 25,780.50 (mean) and Rs 21,000 (median) in 2015 nominal currency units, it said. However, women earn lower median monthly wages, the WB said.

In a trade liberalised scenario, increasing economic activity in urban areas is expected with a major re-allocation of labour from districts with large agriculture and vegetables/fruit sectors, into urban areas that host emerging sectors (chemicals, textile and apparel, and other manufacturing), the WB said. 

Therefore, policies that promote the acquisition of job-related skills will benefit both workers and firms in such an unfolding scenario, the WB said. While workers’ technical knowledge and expertise are critically important, the emphasis on managerial and administrative capacities should be underscored, particularly for firms engaging in exporting activities, it said. 

“Most employment gains, in the unfolding envisaged scenario, are projected in the western regions of Colombo, Gampaha and Kalutara economies open to international trade perform better than do closed ones, and that relatively open trade policies contribute to sustained economic development,” the report said. 

The higher wages in textiles and wearing apparel would attract workers from chemicals and some manufacturing sectors, the WB said.

In the evolving scenario, by enforcing progressive labour standards and policies that protect vulnerable workers, in particular, policies that prevent the exploitation of migrant unskilled women; can help to guarantee the long-term viability of the expanding sectors and expanding urban communities as envisaged in a liberalised trading environment, the WB said.

Also, policies that protect the safety in the workplace and that promote that workers obtain a fair share from their labour, guarantee the long-term sustainability of the sectors in question that benefit from such a scenario and the economic viability of the new urban areas that they will populate, the WB report further said. 

However, in the absence of additional policies, growth will not equally distributed, the WB warned. (Concluded)

By Paneetha Ameresekere | Published: 2:00 AM Jan 18 2021

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