What you need to know about the gender pay gap and how to narrow it
Recent statistics reveal that in the UK women still earn, on average, 18.4% less than men. We had a look at the facts and figures of the gender pay gap, and what can be done to close it.
By Rute Costa
A long standing battle to close the gender pay gap has been going on for decades. Figures of the disparity between men and women’s earnings are one of the most prominent pieces of evidence gender inequality is a current issue in the workplace which must be tackled. Recent statistics reveal that in the UK women still earn, on average, 18.4% less than men.
The Causes
The causes behind this inequality are deep-rooted and complex. Whereas in the 1970s and 1980s, differences in education and experience justified men having higher paid positions, this is no longer the case. Since the 1990s, women have become as academically qualified and professionally skilled as men, which has contributed to reducing the pay gap. Nevertheless, we still witness men earning significantly more in high professional roles than women do.
A recent study conducted by the White House Council of Economic Advisers concludes that, in the US, women are underrepresented in the three industries with the highest averages wages. Similarly, in the UK, women make up 80% of those working in the low paid care and leisure sector, and only 10% of those in the better paid skilled trades (Fawcett UK). Women tend to work in lower paid industries, and it is unclear how much of this is due to preference, or discrimination. More than half of women working in male dominated environments – computer science, for example – end up leaving mid-career. Most importantly, recent UK data confirms that women are not making it to the top-paid leadership positions, being underrepresented in the boardroom of 82% of British companies. The numbers reveal women are not being given equal opportunities to climb up to these roles. What Harvard Professor of Economics Claudia Goldin calls the ‘quiet revolution’ – the movement by which women are gradually taking over once male-dominated professions – is hindered by this still existing paradigm.
“In the UK, women make up 80% of those working in the low paid care and leisure sector, and only 10% of those in the better paid skilled trades.”
One of the most significant causes of the gender pay gap is the imbalance in family caring responsibilities. In general, women spend more time looking after children and elderly relatives, which means they need flexible working hours and often end up having to work part-time. There are very few quality positions of great responsibility that give mothers the option of working at flexible times, creating an obstacle for career progression post-childbirth. As careers progress, the gap widens, and it is partially due to this. Although paid parental leaves facilitate and encourage a return to the workplace, they are far from solutioning the problem. Women are still seen as less committed to their jobs after maternity leave. Employers need to build a support network that allows them back into work whilst suiting their needs both as parents and as professionals.
The Unjustifiable
There is still a significant percentage of the pay gap that is not justifiable by any explicit causes, and could only be explained by discrimination – often by implicit or unconscious biases. To put it simply, a significant number of women are earning less than men with the same qualifications. The Equality and Human Rights Commission points that discrimination around pregnancy and maternity leave is still common, with 54,000 women being forced to leave their job every year after becoming a mother. From women who are seen to be less likeable and competent in traditionally male dominated roles, to women who are perceived as socially inadequate for negotiating their salaries when their fellow male colleagues are not, there are obvious traces of discrimination still lingering.
“To put it simply, a significant number of women are earning less than men with the same qualifications.”
Trying to justify the unjustifiable: The case of social entrepreneurs
You may be surprised to find out that in social enterprises the gender pay gap is 29%, 10% higher than the UK average. It seems to make no sense: the ultimate aim of social enterprises is a fairer, more equal society, and they are a hub of female professional prosperity – one of the few sectors with a higher percentage of female CEOs – where women have the option to avoid discrimination by setting their own pay. In a recent study asking ‘Do Women Earn Less Even as Social Entrepreneurs?’, Estrin, Stephan and Vujic named this strange phenomenon the ‘contented female social entrepreneur’ paradox. They explain that because social enterprises generate both profit and social change, the ultimate career goals are not merely financial. Whereas male CEOs tend to find a highly paid social entrepreneurial job more satisfying, female CEOs feel more professionally accomplished due to the non-monetary rewards of their job. Statistically, women are more willing to trade-off pay for flexibility and for the pleasure of helping others, and are therefore more satisfied as social entrepreneurs than men.
Although social enterprises are an incredibly satisfactory occupation, they are also perpetuating gender pay gap inequalities. The fact that this is not caused by discrimination, but determined by the employer’s choices, does not make it less significant. The solution is, perhaps, in encouraging policy makers and employers to close the pay gap whilst bearing in mind personal fulfilment.
Legislation and Action
Fawcett UK has given us a worrying figure: if we carry on at the current pace of progress, the pay gap will take about 100 years to close. Action must be taken to increase fairness for the present and future generations. Some movement towards change has already been achieved: the new gender pay gap legislation requires employers with 250 or more employees to publish yearly reports disclosing the pay gap between their male and female employees.
In April 2018, Britain made history by being the first country in the world to collect and analyse detailed data about the gender pay gap. As predicted, the results were alarming, with 7,795 out of 10,016 companies and institutions paying men more than women, based on median hourly pay. The figures reveal structural inequalities in the workforce by showing an abrupt lack of women in high-paid top positions. A Guardian analysis of the data also shows that in companies where women are overrepresented in the boardroom, the median pay gap of the company as a whole significantly diminishes.
Part of the most effective strategy to close the gender pay gap is giving women equal opportunities to get to top positions within their companies or organisations, and to create the professional support networks that encourage them to do so. To an extent, the movement towards closing the gap also requires raising awareness for the benefits it would bring. The workplace would not only become fairer, more inclusive, compassionate and equal, it would also become more productive. The consulting company McKinsey has predicted that, if the gender pay gap closed, the economy would make £150 billion more profit by 2025. That is simply because companies would not be wasting female talent, education and skills.
Employers do not have to wait for the government to issue legislation: they can work towards equality in the workplace by advertising more jobs in their organisation as flexible, part-time or job shares, by offering women support and encouragement to progress to higher paid positions, and by becoming living wage employers. Ultimately, by being transparent about equality policies within their organisation.
The gender pay gap is not an issue of the past, and it is up to us to stay informed and join efforts to close it.
