Do you know the difference between unequal pay and the gender pay gap?

by Stephen Tall on March 22, 2016

gender pay gap

I have written before about how the debate on the gender pay gap irritates me.

It is lazily reported in the media as if the whole problem is down to evil companies flouting the 45 year-old equal pay act and refusing to pay women the same as they pay men for equivalent work. Now, I’m not about to deny that doesn’t ever happen, doubtless it does; but it’s increasingly rare and has little or nothing to do with the continuing gender pay gap, a much more ingrained problem which we are still nowhere near solving.

The graphic above is nicked from an excellent new report, ‘Gender Pay Gap’, published today by the Women and Equalities select committee.

It succinctly summarises the main issues which explain why women, particularly those over the age of 40, earn far less than men:

The key issues of pay differentials are: the part-time pay penalty; women’s disproportionate responsibility for childcare and other forms of unpaid caring; and the concentration of women in highly feminised, low paid sectors like care, retail and cleaning.

It also highlights that this is not just a ‘wmmin’s issue’, but one of vital importance to our economy:

There is strong evidence of the economic and productivity benefits of tackling the gender pay gap. The best organisations recognise this and are taking steps to offer flexible working and improve job design to attract and retain talent. However, the productivity case for reducing the gender pay gap has not been made strongly enough to all employers across the UK. The Government, business, trade bodies, unions and public sector organisations must work to move the discussion about the gender pay gap beyond one of equality, to one of economic necessity.

Its recommendations are sensible, but also far-reaching and bound to be controversial (especially with men, for whom the current system operates very nicely, thank you):

There is clear evidence flexible working benefits the UK economy and individual employers. However, a culture of presenteeism and a lack of creative thinking about job design are hampering progress towards flexibility as the norm. Too few employers are considering the benefits of offering jobs as open to flexible working. … All jobs should be available to work flexibly unless an employer can demonstrate an immediate and continuing business case against doing so.

The evidence is clear that caring responsibilities are a significant barrier to women’s pay and progression prospects. As long as women continue to take disproportionate responsibility for the care of children and other family members, the gender pay gap will persist. More equal sharing of childcare responsibilities can help to reduce the gender pay gap by facilitating women’s return to the labour market and changing perceptions of men and women as being equally likely to take on caring responsibilities. … If Government is to achieve its objective of reducing the gender pay gap it needs a more effective policy on shared parental leave (SPL). Current weaknesses can be addressed by three months paid paternal leave for second parents. This can only be taken when the mother returns to work and would be additional to current parental leave benefits.

Many women who have left the labour market due to caring responsibilities, or for other reasons, will need to return to paid employment. This may be because of pension shortfalls or changes in circumstances like divorce. Others will choose to return to work. In both cases, the skills and experience of this group of women can help improve UK productivity. The Government should therefore invest in supporting their smooth return to the labour market as a matter of urgency. … The first task of the Government’s new ministerial group on the gender pay gap should be to create a National Pathways into Work scheme for harnessing the skills and experience of women over 40. This scheme would give women a clear entry point into a support system offering careers guidance; retraining where necessary; and information on local skills shortages and job opportunities.

Women over 40 are concentrated within highly feminised, low paid sectors. Their low pay and lack of progression play a significant part in the gender pay gap. There must be more focus and investment aimed at these low paid employees if the goal of reducing the gender pay gap is to be achieved. … The Department for Business and Skills should develop industrial strategies for low paid highly feminised sectors, beginning with the care sector. This would bring together policies on training and skills; increasing productivity; the use of technology and innovation; regulation; and the role of LEPs.

If gender pay gap reporting is to have any impact it must help employers understand why pay gaps exist and lead to action to address these problems. It must be seen as the beginning of a process rather than the culmination of a tick box exercise. … We also suggest that the Government should produce a strategy for ensuring employers use gender pay gap reporting as a first step for taking action rather than an end in itself. This strategy should be published a year before the regulations commence.

It’s an highly readable report, and a very important contribution to a debate which too often gets mired in dodgy stats designed to shock rather than to explain.

Hopefully future debates can be based on the real issues facing women – that caring responsibilities primarily fall on them; that we lack a culture of flexible working (bad for all parents, not just mums); and that we under-value highly feminised sectors – and the ways in which we can tackle them. Not only because it’s the right thing to do for women, but because it’s also the right thing to do for the whole of the economy.