How Blockchain could close the gender pay gap

Image Credit: Hyejin Kang / Shutterstock

Gender pay inequality is still a major problem in the labor force. Blockchain technology, with its greater transparency, has the potential to reduce the problem, especially in the sharing economy.

With the advent of sophisticated technology, freelance has become a popular alternative to the 9-to-5 office working model. Many people have chosen to keep their traditional job, but they work from home more frequently. Others have kept their jobs, but have taken part in the extra online work. And some have abandoned the full-time freelance office.

It could be assumed that a predominantly online workspace would eliminate any gender pay gap. Unfortunately, this is not yet the case. Even though the pay gap is smaller for freelancers than for those in offices, it still exists.

Fortunately, technology as a blockchain could eliminate (or at least diminish) gender inequalities in wages. Blockchain could also provide women in the less developed markets with the opportunity to work.

Why do many choose freelance?

Freelance offers a freedom that traditional office jobs do not do. People can work whenever and wherever they want, as long as their tasks are completed. This is a huge advantage for two main reasons.

Firstly, being able to work anywhere means that people with responsibilities that require a lot of time at home can tend to their responsibilities without compromising their work. The independence from the position also means that people are not limited to a specific city or country. They can work anywhere with reliable Wi-Fi.

The second advantage is that freelancers can choose exactly when they want to work. All are different, so we expect every employee to work optimally between 9:00 am and 5:00 pm. It is unrealistic. Freelancers are free to work whenever they want. So, the people who work best at dawn could do it, and the same goes for those who prefer to burn the midnight oil.

The gender pay gap meets the blockchain

In the traditional labor market, women earn only 79 cents for every dollar earned by their male counterparts – and even less if they are a black woman. Although the numbers are much better for freelancers, the independent workforce is not yet gender-neutral.

One might think that as freelancers set their rates, this should solve the problem. But this is not the case. In reality, many of the problems with the pay gap in the traditional workforce fall into freelance. If a woman has earned 79% of what her male colleagues have earned for years, they are likely to charge less than they should when they turn to a freelancer.

Blockchain can help here. If a system based on blockchain has a network only for freelancers, for which they are able to create a community, these freelancers can communicate with each other. Creating connections and relationships with other freelancers helps people evaluate what should be in charge.

In addition, blockchain technology is decentralized, which means there is no one authority. Therefore, money is based on results and on the output of a freelancer, rather than on factors irrelevant to performance, such as race and gender. Open registries using blockchain-based systems also create greater transparency, which would further help to bridge the pay gap, because it would be easier to see when inequality was present.

Women in developing countries

In some developing countries, laws concerning women are not the same as for men. In a country where women have just earned the right to work, there may not be any infrastructure or support systems to actually exercise this right.

The World Bank claims that women in developing countries are less likely to have an identity or birth certificate. Because blockchain technology can store personal records, women may be equipped with digital IDs so that their information is always safe. With a reliable source that maintains their official identification, women in these countries may be able to look for a formal job.

Women without bank accounts

According to Fortune, 42% of women in the world do not have bank accounts. This is a staggering number, but blockchain could also be useful here. Blockchain is secure and decentralized and does not require banks or other third parties to be involved in financial transactions. Therefore, a woman would not need to access a bank to receive money.

Because blockchain allows money transfer without interruption between two parties, the costs generally associated with money transfers may also be lower. This is particularly useful for women in developing countries who may not be able to meet transaction costs. Moreover, they can save money by opening a cryptocurrency portfolio because, unlike banks, they do not have maintenance costs.

Equal opportunities for all possible genres

The work force is, unfortunately, still very gender. Even in the freelance sector, there is a discrepancy between the rates for men and women. Blockchain can help by connecting women to other freelancers in their field who can show them what they should be in charge. Blockchain can also help strengthen women in developing nations, who may not have the means to find a job or open a bank account.

Will Lee

Will Lee, CEO of Blue Whale and Verlocal. He studied Artificial Intelligence at Stanford. Its mission is to convert people into individual business owners and maximize their full potential. Through its mission, it aspires to create a "human-centered" industry in which human beings can continue to develop and improve themselves through self-discovery.

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