Is the Gender Pay Gap a Reality or a Myth?

With just over a month to go, we are fast approaching the deadline whereby organisations in the UK with over 250 employees have to report to the government on their gender pay gap, for the first time ever.

This was introduced last year as part of the governments commitment to eliminate this gap, but there are many who believe that the gender pay gap is just a myth.

The idea behind the reporting is that the reporting requirements will help employers identify the gaps in their organisations and take action to close it. Additionally, although not the purpose for the reporting, it will enable naming and shaming to take place, with negative publicity for those whose figures aren’t good.

The results must be published on the employers’ website and will be published on the government website.

What exactly is the gender pay gap?

The Office for National Statistics (ONS) defines the gender pay gap as the difference in median pay between men and women. Their headline measure for the gender pay gap is calculated as the difference between median gross hourly earnings (excluding overtime) as a proportion of median gross hourly earnings (excluding overtime) for men. The ONS Annual Survey of Hours and Earnings (ASHE) for 2017, shows that men on average were paid ￡1.32 more per hour than women, which, as a proportion of men’s pay, is a pay gap of 9.1% for full time employees.

The ONS states ‘the pay gap is useful in measuring pay equality due to its simple calculation; however, it does not measure the pay difference between men and women at the same pay grade, doing the same job, with the same working pattern. It also does not include any of the personal characteristics that may determine a person’s pay such as age.’

The gender pay gap reflects inequalities and discrimination that affect mainly women in the workplace. When it is looked at for both full time and part time employees, the gap stands at 18.4%.

Globally, the World Economic Forum reports on the gender gap each year, benchmarking 144 countries on their progress towards gender parity with regards to economic participation and opportunity, educational attainment, health and survival, and political empowerment.  In their 2017 Global Gap Report, it was reported that the average pay for women in 2017 was $12,000, compared with $21,000 for men, and that men’s earnings are increasing rapidly.

How this differs to unequal pay

Equal pay and the gender pay gap both deal with the disparity of pay received by women in the workplace. However, equal pay means men and women working in the same organisation, doing the same, equal work, must be paid the same. Employers must give men and women equal treatment in the terms and conditions of their employment contract if they are employed to do:

• 'like work' - work that is the same or broadly similar
• work rated as equivalent under a job evaluation study  
• work found to be of equal value in terms of effort, skill or decision making

Equal treatment relates to ALL aspects of pay and benefits and is a legal requirement.

The gender pay gap measures the difference between men’s and women’s average earnings (no matter what their role is) over a period of time and is expressed as a percentage of men’s earnings. As a result of the gender pay gap, women’s lifetime earnings are reduced, pensions are affected, and it is said to be a significant cause of poverty for women in later life.

Why does this gap exist?

The data shows that the gap for full time workers is small for the 20-39 age group. However, from 40 onwards the gender pay gap widens, reaching a peak between ages of 50 to 59. The pay for both men and women grow over their lifetime overall, but women’s pay grows less than men’s and stops growing earlier than men’s.  Once a woman has children, she becomes part of the phenomenon known as the motherhood penalty. The pay gap for women increases after maternity leave, impacting both income and benefits over the course of the rest of their career.

Women are still the primary care givers of both children and ageing parents. For many of these women, working part time enables them to fulfil their caring responsibilities. There are more than three times as many women working part-time than men, and part-time jobs tend to be lower paid.

Women are more likely to work in low paid sectors than men. Men are more likely to work in higher paid, senior roles, and skilled trades.

Is the gender pay gap a myth?

Some have said that the gender pay gap is a myth, or at most, that the data is misleading. Reported data on the gender pay gap has varied, ranging from the ONS figure of 9.1%, to 14.1% by the Fawcett Society (based on the mean findings of the ONS), to 54% by Adzuna, a search engine company for job ads. The range of calculations make it difficult to get a true picture of what the situation is.

Once women and men start their careers, they choose different paths, with women choosing to enter in to careers that offer lower pay, such as the caring and leisure sectors. Even looking at the subjects they choose to study at university, men outnumber women in almost every science and engineering industry, which ultimately leads to higher paid jobs. The lowest paid subjects are dominated by women.

It was found that with Uber (one of the largest gig economy platforms), the gender pay gap was attributed to men driving faster than women.

Some have argued that the difference in pay is that more men have to work full time in order to support their wives/partners so that their families will be provided for, and as a result, this enables more women to work part time and take care of the children and ageing parents.

The picture so far

With the deadline for reporting looming, many companies have chosen to leave their reporting till the last minute and have not yet submitted their returns. As of this moment, 1219 of the estimated 9000 organisations that are due to report, have submitted theirs. Of those that have submitted their return, 74% pay higher rates to men than women, 15% pay higher rates to women, and only 11% say that there is no difference.

The gender pay gap is real, and as to how real, we may not even get an accurate picture post the reporting deadline of 4 April 2018. Analysis by the Financial Times and payroll experts has identified flaws in the governments reporting requirements, which means employers can submit fabricated data or even avoid reporting altogether.

If you want to address your gender pay gap, the government has issued a toolkit for employers, giving advice and setting out action that can be taken to address it.

Addressing it needs to go beyond the workplace however, it needs to start with the way we raise our children, including the messages we give out to them as a society.

#GenderPayGap #EqualPay #GenderEquality

ABOUT ME:

I am The Coach for High Achieving Introverted Women, an Executive, Career, Business Coach, Writer, Speaker, LinkedIn Top Voice UK 2017 and the founder of Abounding Solutions . With over 25 years coaching and leadership experience, I help women (with a particular emphasis on introverted women) to be authentic, bold, confident leaders and excel in their careers and businesses.

I also help organisations develop the talent pipeline of female employees so that more women make it to senior management roles.

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