Despite significant advances in legislation, the gender pay gap signals a long way to go to achieving gender equality in the UK. Whilst The Equality Act 2010 states that discriminating on the bias of gender is unlawful, there are unsatisfactory enforcement procedures. There needs to be increased transparency within companies and appropriate checks to ensure anti-discriminatory laws are being enacted.
Theresa May stood outside Downing Street in July and listed a series of “burning injustice(s)” she pledged her Government would fight. The listed included the fact that “if you’re a woman, you will earn less than a man.”
Less than six weeks later the Institute for Fiscal Studies’ report into the gender wage gap has underlined the challenge our new Prime Minister faces. On average women in paid work receive about 18% less per hour than men.
It shows the key reason is more women than men work part-time or flexibly – because they are disproportionately responsible for unpaid caring and need to combine their responsibilities at work and home. This needs to be addressed. But I’ll get to that.
These part-time options are less well paid with fewer opportunities for career progression than full-time work. Only 8.7% of quality job vacancies (those that pay over £20,000 full time equivalent or more) are advertised as being open to some kind of flexibility – compared with 20.2% among lower paid jobs.
So women often find themselves trapped in low paid work where they are unable to progress. They stay because they are afraid that they won’t find working arrangements that suit their childcare pattern elsewhere. These fears aren’t unfounded - quality part-time and flexible jobs are few and far between. So the gender pay gap persists.
Often the twin challenge of finding affordable, available childcare (which couples tend to assume should be deducted from women’s salaries) and reasonably well-paid, part-time and flexible employment is insurmountable – and women leave employment. Clearly when they return they will have missed out on any interim wage growth and opportunities to upskill – so the gender pay gap persists.
Childcare can be a deciding factor in terms of women continuing in employment after children are born. But addressing this is only part of the picture. Key is ensuring more quality part-time and flexible jobs – jobs with career and wage progression – in the UK labour market. As well as reporting on pay we’d like to see employers reporting on the steps they have taken to embed flexible working in their organisations, including whether or not they have taken a ‘flexible by default’ approach to recruitment. This would open up choice for women - and men - helping tackle that persistent gender pay gap.
But what about women’s disproportionate responsibility for unpaid caring? While women’s choices are more limited the gender pay gap will surely remain. The barriers to using shared parental leave – encouraging fathers to share care early on - must be tackled to make it a realistic option for new parents. We disagree it should be extended to other groups like grandparents – before it starts working for fathers.
If Theresa May is serious about achieving parental choice around shared care and reducing the gender pay gap, she might consider bringing in three months non-transferable paid leave for fathers. Ideally this would be supported by the introduction of a free childcare hours allowance for children aged under two – to help bridge the gap between the end of maternity and parental leave in the first year of life and children starting school. These kinds of game-changing policies would get to the root of the gender pay gap - helping eliminate it for good – and unlock the talent of women for the benefit of employers and the economy in post-Brexit Britain.
Sarah Jackson is CEO of Working Families - the UK’s leading work-life balance charity. October 3-7 is National Work Life Week – find more information here.
There was depressing news for working women this week. More than four decades after the Equal Pay Act, the Institute for Fiscal Studies and the Joseph Rowntree Foundation found that women are earning 18% less per hour than men on average.
The research showed that this pay gap increases markedly if women have children – growing year-on-year after childbirth and hitting 33% by the time the child is 12 – suggesting mums are missing out on pay rises and promotions in the workplace, and instead suffering from a motherhood pay penalty.
The IFS study echoes TUC findings from earlier this year. A report we published with the IPPR confirmed the existence of this motherhood pay penalty. While the IFS study rightly highlights the impact that working part-time can have on the pay gap, our report looked at women working full-time and showed that there is still a significant pay penalty for women who have returned to full-time work after having children, if they had them before the age of 33.
The TUC’s General Secretary Frances O’Grady has called this motherhood pay discrepancy a "scandal". All mothers should be supported and treated fairly in the workplace, regardless of the age at which they have their children, their seniority in the workplace or whether they work full or part-time. So, why is this still happening?
Our evidence suggests that despite talk about parents taking a more equal approach to childcare, too many women are still shouldering the load. Women remain the primary care-givers and they are still far more likely than men to reduce their working hours after having children. And, too often, women still face discrimination at work – and can struggle to get access to justice when they do.
A lack of well-paid, part-time or other flexible jobs and affordable childcare mean many women drop out of the workplace or reduce their hours until their children are at school, missing out on vital years of experience and earning potential.
What’s the answer? At the current snail’s pace rate we are going it’s going to take us decades to close the gender pay gap so we urgently need a step change in both government policy and employer attitudes to fix the problem.
Firstly, a good start would be support for more equal parenting roles to stop women being held back at work. Shared parental leave is a step in the right direction, but we know take up is very low due to lack of incentives for fathers to take the leave. The Government should introduce better paid ‘dads only’ leave that would encourage fathers to a more active role in parenting, which would benefit them and their children.
Secondly, free childcare provision from the end of maternity leave, rather than age three, would also help. More free childcare would help minimise the pay penalty for single mothers, who we know face significant barriers to paid work, especially when their children are very young. Single parents are still less than half as likely as couple parents to be in work when their children are under five. And free childcare from the end of maternity leave would help younger mothers with less seniority and lower pay to stay in work after having children.
And thirdly, much more must also be done to open up higher skilled, better paid jobs to flexible working or reduced hours. There are very few good quality job opportunities being advertised with flexible or part-time work options – just 6% of those advertised with a full-time equivalent of £19,500 or more. This would really help keep mums in the labour market and it would enable more women in part-time roles to continue to progress, rather than getting stuck in low-paid, part-time work after having children.
We’ve also got to see better enforcement of legislation against discrimination linked to pregnancy and childbirth. A recent EHRC survey on pregnancy discrimination found incredibly high levels of pregnancy and maternity discrimination, affecting 77% of mothers and forcing tens of thousands of women out of their jobs each year. Younger mothers are much more likely to report discrimination – a fifth said they were dismissed or were treated so badly that they were forced out of their jobs because of pregnancy or maternity leave, compared to one in ten mothers overall.
And these women who experience pregnancy or maternity discrimination must have access to justice. It currently costs £1,200 to take a claim to tribunal, and even workers employed on the minimum wage have to pay these fees if a member of their household has savings of £3,000. Many mums would struggle to find this cash to spare, especially when a new baby has just arrived. The Government needs to abolish employment tribunal fees to ensure all women – and in fact all workers – are able to take a claim to enforce their basic rights at work.
Alice Hood is Head of Equality at TUC
Last Monday was International Women’s Day. The day marked 102 years since British suffragettes marched on Charing Cross leading to Sylvia Pankhurst’s arrest. British recruitment firm, Robert Half, used the day to highlight significant wage disparities between men and women. Their analysis showed that working women in the UK are likely to be paid £300,000 less than men over the course of their career. These statistics provoked significant debate on the existence and causes of the gender pay gap.
Is there a gender pay gap?
The Office for National Statistics (ONS) conducts an annual survey of hours and earnings (ASHE). This robust survey finds that, in 2015, there was a 9.4% gap between men and women’s pay for full-time workers. On average, men earned £96 more per week than women.
However, beneath the headline figures lie some interesting findings. For part-time workers, there was a gender pay gap in favour of women. In 2015, the gap between male and female part-time workers was -6.5%.
In addition to work hours, age matters enormously. Between the ages of 22 and 29, the pay gap between women and men was, on average, -0.8%. That is, women earn slightly more than men. Between the ages of 30 and 39, the gap was 0.6%. After the age of 40, the gender pay gap widens enormously. At ages 40 to 49 the gap was 12%, 17% at 50 to 59 and 13% for over 60s.
There are also significant differences between occupations. The gap between men and women working in skilled trades was almost 25%, while the gap between men and women working in sales and customer service was less than 5%.
What causes the gender pay gap?
Clearly, there is a significant gap between the pay received by men and women. This is despite the fact that women now outperform men at almost every level of education. So what is driving the gap?
The single most important cause of the gender pay gap is hinted at in the data above. The average age for women to have their first child is now over 30 years old. Over two million women are economically inactive because they are looking after their children compared to just over 200,000 men.
After a period of extended leave, women rarely return to the wage of their male counterparts who did not exit the labour market. This largely explains why the gender pay is narrow, and even negative, between the ages of 22 and 40 before increasing dramatically after the age of 40.
How can policymakers rectify the gender pay gap?
There are a number of points at which policymakers might intervene to attempt to redress the gender pay gap.
Addressing the gap at its root
The first stage at which policymakers might intervene is when women leave the workforce to care for their children. This could be done by incentivising men to care for children, by making forms of childcare more affordable, or by increasing the availability of flexible working.
Generally, this has proved a popular way of attempting to close the pay gap. Measures such as shared parental leave - whereby up to 50 weeks of leave can be shared by parents - have attempted to incentivise more men to become the primary carer.
However, the Government’s own estimates suggest that only around 8% of men will actually utilise this leave. Indeed, Unilever - who offer new dads 37 weeks of paternity leave at full pay – find that only around 15% of eligible men utilise that leave.
Reducing childcare costs has also proved a popular way to incentivise women to return to work. Successive governments have introduced tax breaks for childcare in an attempt to make it more affordable, while the Government is currently in the process of meeting its promise to introduce 30 hours of free childcare per week for working parents.
Despite these reforms, the cost of childcare in the UK remains comparatively high. The cost of childcare in the UK regularly ranks among the highest in the world. And even when childcare costs are lower, the gender pay gap persists. For example, Sweden has some of the most generous childcare benefits in the world but a gender pay gap very similar to the UKs.
Returning to the workforce
The second obvious point at which policymakers might attempt to redress the pay gap is when women return to work. There are a number of ways of making the return to the workforce easier for women. These include: increasing the provision of flexible working and accelerated re-entry programmes.
The Coalition Government introduced the right to request – whereby employees with 26 weeks or more service are allowed to request flexible working, which employers must address in a 'reasonable manner'. Since the introduction of the legislation around 25% of all employees - and 36% of female employees with dependent children under the age of six - have requested more flexible hours, with around, 80% of requests either partially or fully instated.
US companies such as JP Morgan, Credit Suisse, Morgan Stanley and Goldman Sachs have implemented re-entry programmes for women to allow them to return to work more easily after leave. Goldman Sachs, for example, operates a paid, ten week, return-to-work programme. People who have been out of the workforce for at least two years are eligible and Goldman Sachs provides them with training, mentoring and networking.
There is a significant and persistent gap in the pay of men and women in the UK. This is largely caused by women leaving the workforce to care for children. However, there is no silver bullet to redress the gap. The choices for policymakers are complex, and attitudinal change is likely required if the pay gap is to be eradicated.