On International Women’s Day, Inclusive Capitalism Examines Gender Pay Disparities In The Gig Economy


Today, on International Women’s Day, I want to look through the lens of inclusive capitalism at the glaring pay disparity that exists between men and women working as independent freelancers. Legal & General has been rolling out a multi-part study looking at U.S. Gig Economy, partly to find out what is motivating so many people to work outside of conventional jobs, bosses and workplaces, and partly to understand what financial safety nets are missing for these individuals who choose to work as freelancers. Here we’ll take a look specifically at women who have made this choice, informed by our newest report on women in the Gig Economy.

A while back, we laid out 10 guidelines for inclusive capitalism. Among them:

  • “Inclusive capitalism benefits a broad range of people.” (#2)
  • “Inclusive capitalism helps to solve market or policy failures.” (#4)
  • “Inclusive capitalism supports environmental, social and governance (ESG) measures.” (#6)
  • “Inclusive capitalism requires that we break the cycle of combined educational, financial and digital exclusion.” (#8)
  • And, “Inclusive capitalism strives to break the cycle of intergenerational inequality.” (#9)

In collecting data and impressions from our female freelancer sample, some half of the 1044 individuals we interviewed, we found out a number of alarming facts about their financial state. The number of hats they have to wear to keep their lives and the lives of others flowing smoothly, and the work-life tradeoffs this entails. How many find the conventional workplace a waste of time in some ways, preferring, as one of our respondents put it, not having to “…not having a manager breathing down my neck.” How especially older freelancing women worry about their basic lack of long-term financial security. And, easiest to back with numbers, the highly significant gap in pay between female gig workers and their male counterparts—a 32 percent difference, on average. This, in comparison with the Pew-reported overall figure that American women earn 82 percent as much as men, a figure that hasn’t really changed in a couple of decades.

Here are a few stats from today’s report. In the lowest pay bracket, 58 percent of those surveyed were women. Contrast this to the highest pay bracket where 68 percent of the group were men. In the group earning over $100,00 per annum through gig work, we found only 18 percent are female, while 28 percent are male. Looking at women freelancers’ biggest worry, 71 percent said their biggest worry is their financial future. No wonder. In our sample, only 8 percent of women reported they had a pension plan in place.

Why is the gap so much greater for female gig workers? One reason we found is that women gig workers largely inhabit lower-paid work sectors, such as Beauty & Heath, Media/Writing and Online/App Services. They are far less likely to work in IT, the highest paid sector among all the freelancers we interviewed. To give an example of how this plays out, as reported to us, a typical project in media or writing might command a fee of $300, making it the lowest paid sector. Compare this with $1200 per project in the IT sector.

There’s something inclusive capitalism can do here. Looking again at #8, above: Inclusive capitalism requires that we break the cycle of combined educational, financial and digital exclusion. The lack of women in technology—currently the highest paying jobs available—might be pinned on numerous factors, among them the relative scarcity of young women being trained for IT jobs. The 2016 film Hidden Figures, about three Black female mathematicians who overcame great odds to work as “human computers” for NASA in 1961, makes the point that this is not a new social problem.

Looking beyond the tech pay gap, the overall disproportion uncovered by our research told a similar story. We found that across all categories of respondents who provided their earnings, whether they are paid per project, per hour, per week or per month, women earn over 30 percent less on average than men (see chart below).

We also found that child rearing and caregiving were primary reasons that many women have chosen to work in the gig economy rather than in traditional office-based jobs. While 18 percent of the female freelancers we talked to said they chose to start gig work as a consequence of having a child, for those who are already mothers, this number leapt to 43 percent. By contrast, 19 percent of male gig workers who are already fathers reported that they were driven to gig work by a need to be more available to their kids.

While it has been well documented that not only do women make less money than men and do more (unpaid) caretaking, what we found from our survey subjects is that they also have less access to retirement savings than traditional employees, making them far more concerned about their financial futures than their male counterparts. In our research, 71 percent of women said that not having access to group retirement plans and other benefits was the worst thing about gig work. Seven out of 10 women either expect their monthly retirement income to be under $3,000 or aren’t sure what they can expect. In comparison, 46 percent of men expect to be receiving $3,000 to $6,500 a month in retirement income. Indeed, the U.N.’s Department of Economic and Social affairs recently reported that older women suffer from higher levels of poverty than do older men in both rich and poor countries.

Our research on women in the gig economy paints the picture that inclusive capitalism is needed now more than ever to address these inequities in their behalf. Investing in women’s long-term social welfare as well as their short-term equitable prosperity are initiatives that will help put the “inclusive” into “capitalism.”

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