Women’s pay: still a scandal

“At this rate, today’s young women will be retired before equal pay becomes a reality.”

Despite the Equal Pay Act – which came into force 47 years ago – in Britain, today, women still earn less than men.

So, 10 November 2017 is the day that full-time women workers effectively start working for free.

The most recent statistics from the ONS’s Annual Survey of Hours and Earnings (ASHE) show that the gap for full time workers is 14.1 per cent.

The gap is wider for older women, Black, Asian, and minority ethnic women, women in certain occupational sectors such as skilled trades, and women on higher earnings.

And progress in closing this pay gap has stalled; it hasn’t changed in the last three years.

There are different ways of calculating the gender pay gap.

Like most organisations, the Fawcett Society, in a recently published briefing on the pay gap, uses the gross hourly pay gap, excluding overtime.

And, as Fawcett points out, there is no one cause of the gap; important factors are discrimination, undervaluing roles predominantly done by women, dominance of men in best paid positions and unequal caring responsibilities.

Fawcett’s briefing points out:

We currently have a divided labour market.

Women make up 80 per cent of care and leisure workers and only 8 per cent of those working in the better paid skilled trades.

Women make up 61 per cent of those earning less than the real living wage set by the Living Wage Foundation.

Women with degrees face a pay gap too. In the UK, the aggregate (full and part time) gender pay gap for graduates ten years after graduation is 23 per cent.

And men continue to dominate apprenticeships with the best earnings potential: In 2014/15 nearly 17,000 men started engineering apprenticeships while only 600 women did.

Then we have unequal caring responsibilities.

Women continue to play a greater role in caring for children and sick or elderly relatives. As a result more women work part time (42 per cent vs 14 per cent). These jobs are typically lower paid with fewer opportunities for progression.

Research by IPPR has found that mothers in full time work at age 42 face a motherhood pay gap of 11 per cent – when factors such as education, class etc. are controlled for, they still face a gap of 7 per cent.

Meanwhile, fathers who have kids enjoy a daddy pay bonus of 21 per cent compared to men without children, even when other factors are controlled for.

The IFS has found that the gender pay gap widens over twelve years after a child is born to 33 per cent, due to lost wage progression for women.

And men continue to dominate the most senior and best paid roles. In 2017, only six chief executives in the FTSE 100 were women.

Women make up only 10.4 per cent of executive directors in the FTSE 100.

Women make up 73 per cent of the management workforce in entry-level roles, only 32 per cent of directors.

And discrimination…

By its nature it is difficult to measure the impact of discrimination. However, experiments have shown that it is still an important factor.

An American experiment where identical CVs were presented with female and male names found professors judged female applicants to be less competent, and less hireable. Professors were prepared to offer almost USD4,000 more to the identical male applicant.

And the EHRC estimates that 54,000 mothers a year are forced to leave their jobs early after they become pregnant.

Fawcett research identifies that amongst people who make recruitment decisions in businesses, those who oppose equality of opportunity for the sexes are over-represented (16 per cent compared to 7 per cent in the overall population) – this small minority of ‘barrier bosses’ may be key to tackling the impact of discrimination.

Then there’s the big question – vital question: What should we do about it?

The Fawcett Society in this briefing, suggests:

Mandatory gender pay gap reporting means that all larger employers need to publish their pay gap by April 2018.

To ensure this step genuinely tackles the pay gap there should also be a requirement to publish an action plan on how employers will close the gap and there must be penalties for those who don’t follow the new rules.

Businesses that are serious about tackling discrimination should conduct equal pay audits, going further into their data and the nature of job roles to make sure men and women are paid equal pay for work of equal value.

The introduction of Shared Parental Leave was an important step, but to ensure more men take it and we rebalance caring responsibilities Fawcett would like to see a period of leave dedicated to second carers paid at a rate that makes it affordable for them to take it.

Businesses should be required to advertise job roles as flexible by default, unless there is a strong business case not to do so.

It’s time to think seriously about quotas, from the boardroom to apprenticeships.

Over 60 per cent of those earning less than the real living wage are women – we urge more businesses to become a real living wage employer.

We need to challenge the segregation of men into higher-paying occupations and women into lower-paying occupations, starting with encouraging more women into STEM subjects at school age.

And we need to increase the value placed on – and wages paid for – roles which women are highly represented in, such as care work.

Commenting on Equal Pay Day, the Young Women’s Trust’s chief executive, Dr Carole Easton, said: “At this rate, today’s young women will be retired before equal pay becomes a reality.

“The gap exists from the moment women start work.

“Young Women’s Trust research shows that young women apprentices earn eight per cent less than their male counterparts, leaving them more than £1,000 a year worse off.

“Often this is because the sectors women tend to work in – such as administration, health and social care and retail – are not valued and paid as much as they should be.

“Government data shows that male graduates of almost all degree subjects are out-earning women within just a few years of completing their degrees.

“We know too that the gap widens as women get older.

“We need urgent action to improve young women’s prospects and give them hope for the future,” she continued.

“This means valuing women’s work, supporting young women into male-dominated areas, which tend to pay more, and providing more flexible working opportunities to help employees balance work and family life.

“Without action, today’s young women face a lifetime of unequal pay.”

And as the Fawcett Society pointed out, there is no guarantee that the gap will just simply close over time – it needs significant action from government, businesses, and society.