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The gender pay gap in the UK stands at 19.7 per cent. In effect, this means that women in this country stop earning anything in relation to men on Tuesday, November 4.
The date may vary, but the phenomenon is the same in every other nation in the world. No country sees women paid as much as men. The International Labour Organisation estimates that the average global gender pay gap now stands at 23 per cent.
While this gap had been slowly narrowing, recent figures have shown a reversal. The standard explanations (about the higher proportion of women to men in part-time jobs) fail to offer a full account, as the gap for full-time workers also increased from 9.5 per cent to 10 per cent in 2012.
Another explanation is that women congregate in the low-paid sectors; the high-paid sectors are men’s preferred domain. Women make up 77 per cent of administrative and secretarial posts, according to 2013 figures from the Office for National Statistics, while men account for 88 per cent of science, engineering and technology jobs. Overall, 63 per cent of workers paid at or below the living wage (£7.65) are women.
“The question is, is that out of preference?” asks Daisy Sands, head of policy at the Fawcett Society, a campaign group that advocates for gender equality. “There isn’t a difference in terms of aspirations between men and women if you look at school and university performance, or how they perform in the labour market in their 20s.”
To better understand what happens after this point, the Fawcett Society recently surveyed 1,003 low-paid women and found that 22 per cent had degree level qualifications, while 37 per cent described themselves as “overqualified and over-skilled” for their current jobs. “Is it because having children simply meant their career aspirations fall by the wayside?” asks Ms Sands. “That’s not what they were saying at all.”
However, some do believe that the pay gap can be explained by mothers losing interest in their careers. Catherine Hakim, author of Key Issues in Women’s Work, argues: “The pay gap in Britain and the USA is now fully explained by mothers (hence most women) having rather different . . . job priorities from most men . . . Research shows that most men work harder, do longer hours, after becoming fathers, whereas most mothers choose shorter hours, less responsibility, typically.”
Yet there is evidence that differences in earnings can occur at the very outset of one’s career. A survey by Catalyst, an advocacy group for women in business, of 4,000 US MBA graduates found women were paid $4,600 less in their first jobs, even after controlling for factors such as industry and prior work experience. A 2012 study by Yale University sent out to employers exactly the same CV for hundreds of entry-level jobs in the scientific academic community. It found those marked Jennifer attracted an average starting salary almost $4,000 less than those marked John.
Even for women who battle through the motherhood barrier (or choose not to have children) the pay gap persists. The Chartered Management Institute finds that the average female executive earns £10,060 a year less than, and is awarded half the bonuses received by, her male peers in the same type of role.
The business group CBI wants the next UK government to set a national target to reduce the gender pay gap. Katja Hall, its deputy director-general, says this would shine a spotlight on the causes, which she believes include “the careers advice we give at school; a lack of flexible working in the workplace; a lack of support for women around maternity leave . . . and childcare”.
Ms Hakim believes that some of the blame falls to women too. Citing the US study Women Don’t Ask, she argues “women are far less likely to negotiate for higher pay, both at the start of their career and throughout”, so men earn more in part because “they ask”.
Ms Sands disagrees: “There is deeply embedded cultural behaviour in what is expected from men and women, and boys and girls. Girls are not taught to be pushy, boys are taught to demand more, and there is negative cultural rhetoric around the ‘pushy’ female . . . So if they often aren’t as forthright in pushing for pay and the like, it is not surprising.”
The Fawcett Society is calling for section 78 of the 2010 Equality Act to be enforced, which would require businesses with 250 employees or more to publish data on pay by gender.
Similar measures are afoot in the US. This year, President Obama signed two executive orders boosting pay transparency for federal contractors. In the UK, the CBI favours voluntary measures.
“There are many ways that companies can seek to retain their talent too,” Ms Sands advises. “Flexible working, job-shares, part-time working, compressed hours, homeworking . . . internal pay audits, training on equality and diversity, having an open discussion about the issues – that’s where you will see change. Companies have to look inwards . . . If we just ignore it and accept it, we will see what we’re seeing now – a regression in the pay gap.”
The motherhood penalty
Why are men with children viewed positively by employers, but women with children negatively?
Solving this conundrum could eradicate the pay gap that emerges mid-career, and from which many women never recover. The median gender pay gap by gross hourly earnings in the UK is 5.3 per cent for workers in their 20s; 12 per cent for those in their 30s; and to 27 per cent for those in their 40s.
A 2012 survey by the Institute of Leadership & Management found that 20 per cent of female managers, compared with 7 per cent of men, believe having children had presented problems or barriers to their career. And an experiment by Stanford University in 2008 found that childless job-hunting women received 2.1 times as many positive responses to their applications as equally qualified mothers. For men the reverse was true. “This is what we term ‘the motherhood penalty’,” says Daisy Sands of the Fawcett Society. “Not only do women take time out of the labour market to care for children, but there is a longer-term, structural issue, that when women return, the types of jobs that would enable them to balance their caring responsibility for children aren’t necessarily available.”
There is legislation around the corner, however, that could change this. Amendments to parental leave from April 2015 will allow UK mothers to share 40 weeks of their 52-week maternity leave entitlement with their partner; this could see fathers take 40 weeks’ paternity leave.
If they choose to do so, it is likely to cause employers to view men and women who have children more equally, either eradicating the motherhood penalty or at least sharing its burden.
However, that is a very big ‘if’.