Tackling the gender pay gap

April heralded the deadline for large organisations to publish their gender pay statistics. Appropriately, it closely follows the centenary of the first British women’s vote.  Hailed as an opportunity for Britain - which has one of the widest gender pay gaps in Europe - to comprehensively tackle issues surrounding gender equality in the workplace, participating companies have reported disparities in pay across the board. Hopes that this drive towards transparency will boost awareness and improve pay equality are justified, although some have concerns regarding the effectiveness of the measures used and the potential for statistical misinterpretation. There is a call to focus on encouraging women into higher-paid roles, as well as providing facilities to allow them to move from part-time to full-time work if they desire.

The data

The gender pay gap is defined as the difference in average earnings between men and women. Under the Government’s 2017 legislation, large companies with over 250 employees are annually required to report their salaries. Information provided by over 10,000 companies in the opening year indicates that men are paid more than women across all main occupation groups.  The median pay gap of 9.7% grows in synchrony with age, reaching its peak for those between 50 and 59. According to the Office for National Statistics, the difference in median pay can be accounted for by a number of factors. A greater percentage of men work in higher-paid occupation groups (e.g. chief executives and senior officials), and men are more likely to work full-time, therefore earning more on average.

Equal measures?

A huge volume of statistical data has been produced, and it can be easy to jump to false conclusions and misleading speculation. Previous data releases by government have suggested that the gender pay gap is not driven by discrimination as many suppose. Kate Andrews, from the Institute of Economic Affairs, has accused these latest figures of “failing to provide any meaningful insight into equal or fair pay for men and women in the workplace.” This is because the figures do not control for differentiating measures, such as job type, background and the number of years of experience.

There have, however, been calls for a recognition of the deeper issues exposed by the gender pay reveal. Lloyd Blankfein, Chief Executive of Goldman Sachs, argues that the statistics highlight the fundamental issue of the “under-representation of women” at the higher echelons of the wealthiest sectors. The fashion retailer Phase Eight has attracted attention on this score. In April of last year, it was revealed that thirty-nine of the company’s forty-four male employees worked in the corporate head office. Chief Executive Benjamin Barnett agrees that the retailer is in a difficult position – the vast majority of applicants for their lower-income jobs on the shop floor are female, and as such they face a struggle to redress the salary balance between male and female employees.

Why?

What causes women to put up with, consciously or unconsciously, lower-paid careers at the bottom rungs of the company ladder? Although direct discrimination may be an influence in in a small number of cases, equality pay legislation has been largely successful in preventing this.

Previous data releases have suggested that the gender pay gap is relatively stable until women have their first child. Women then are much more likely than men to leave the workforce to care for their child. When their child enters full-time education, women then frequently choose to return to part-time work to allow them to combine motherhood with work.

Research by the Institute of Fiscal Studies shows that the gender pay gap jumps from 8% to 30% after women have children, and the percentage of women in part-time work is 44% compared to 13% of men. The unequal caring responsibilities between women and men, according to the Fawcett Society, subtly compel women away from pursuing better careers and higher salaries.

Conclusion

The British Government has been praised globally for its decision to legislate on mandatory pay gap reports. With gender equality at the forefront of discussion, it is a direct confrontation of one of the ‘burning injustices’ faced by modern society. However, the provision of data does not necessarily signify change, and only time will tell whether adequate steps have been taken to truly bridge the gap.

Amabel Scott is a research assistant at Bright Blue