How Blockchain Could Close the Gender Pay Gap

How Blockchain Could Close the Gender Pay Gap

Image credit: Hyejin Kang/Shutterstock

Gender pay inequality is still a big issue in the workforce. Blockchain technology, with its increased transparency, has the potential to reduce the problem, especially in the sharing economy.

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

One would assume that a predominantly online workspace would eliminate any gender pay gap. Unfortunately, this is not yet the case. Even though the pay gap is narrower for freelancers than for those in offices, it still exists.

Luckily, technology such as blockchain could eliminate (or at least lessen) wage inequality based on gender. Blockchain could also provide women in less developed markets with the opportunity to work.

Why do many choose freelancing?

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

Firstly, being able to work anywhere means people with responsibilities that require a lot of time at home can tend to their responsibilities without compromising their work. Location independence also means people aren’t limited to a specific city or country. They can work anywhere with reliable Wi-Fi.

The second benefit is that freelancers can choose exactly when they want to work. Everyone is different, so expecting every employee to function optimally between 9 a.m. and 5 p.m. is unrealistic. Freelancers are free to work whenever they please. Thus, people who work best at the crack of dawn may do so, and the same goes for those who prefer burning the midnight oil.

The gender pay gap meets blockchain

In the traditional job market, women earn just 79 cents for every dollar earned by their male counterparts – and even less if they are a woman of color. Even though the numbers are much better for freelancers, the independent workforce is not yet gender-neutral.  

One might think that because freelancers set their rates, that would take care of the problem. But that isn’t the case. In reality, many of the issues with the pay gap in the traditional workforce trickle down into freelancing. If a woman has earned 79 percent of what her male colleagues have earned for years on end, she is likely to charge less than she should when she turns to freelancing.

Blockchain can be of assistance here. If a blockchain-based system has a network only for freelancers, whereby they are able to create a community, these freelancers can communicate with each other. Forging connections and relationships with other freelancers helps people gauge what they should be charging.

Additionally, blockchain technology is decentralized, meaning there is no single authority. Thus, money is based on a freelancer’s results and output, instead of factors irrelevant to performance, such as race and gender. The open ledgers that blockchain-based systems employ also create more transparency, which would further help in closing the pay gap, because it would be easier to see when inequality was present.

Women in developing countries

In some developing countries, laws regarding women are not the same as those for men. In a country where women have just earned the right to have a job, there may not be infrastructure or support systems in place for them to actually exercise that right.

The World Bank states that women in developing countries are less likely to have an ID or birth certificate. Since blockchain technology can store personal records, women could be provided with digital IDs so their information is always secure. With a reliable source keeping their official identification, women in these countries may be able to look for formal jobs.

Women without bank accounts

According to Fortune, 42 percent of the world’s women do not have bank accounts. This is a staggering number, but blockchain could be useful here too. 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 access to a bank to receive money.

Because blockchain allows for the seamless transfer of money between two parties, costs typically associated with money transfers could also be lower. This is especially helpful for women in developing nations, who may not be able to afford transaction fees. Additionally, they can save money by opening a cryptocurrency wallet because, unlike banks, they do not have maintenance fees.

Equal opportunity for all genders possible

The workforce is, unfortunately, still very gendered. Even in freelancing, there is a discrepancy between the rates men and women charge. Blockchain can help by connecting women to other freelancers in their field who can show them what they should be charging. Blockchain can also help empower women in developing nations, who may not have the means necessary 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. His mission is to convert individuals to one-person business owners and fully maximize their full potential. Through his mission, he aspires to create a human-centered industry where humans can continue to develop and better themselves through self-discovery.