The UK’s gender pay gap of 19.2% represents a significant loss to productivity. Women are better educated and better qualified than ever before, yet their skills are not being fully utilised. Women over 40 are most affected. For those aged between 50 and 59 the gender pay gap currently stands at 27.3%. Yet the Government does not have a coherent strategy to address the issues underlying this gap and ensure younger women do not encounter the same difficulties as they age.
A large part of the gender pay gap is down to women’s concentration in part-time work. Many women are trapped in low paid, part-time work that doesn’t make use of their skills. This is partly due to women’s disproportionate responsibility for unpaid caring, but also because many of the sectors women work in, like retail and care, offer predominantly low-paid, part-time work. Old-fashioned approaches to flexibility in the workplace and a lack of support for those wishing to re-enter the labour market are also stopping employers from making the most of women’s talent and experience.
A wealth of evidence shows that this does not need to be the case. Leading employers are recognising that workplaces need to change. Flexible working for all lies at the heart of addressing the gender pay gap. This does not mean part-time work, which we know is underpaid and limits career progression. Flexible working is much broader and includes jobs shares, late starts, early finishes, term time working and working from home. The Government recognises the value of modernising the workplace, but is still not taking the steps needed to ensure flexible working is offered to all employees, particularly those in lower paid sectors. Moving to a culture where flexibility is the norm, and employees are judged on outcomes rather than presenteeism, offers a tremendous opportunity to tackle the gender pay gap.
However, as long as women continue to take the majority of responsibility for childcare and other forms of unpaid caring, pay differentials will persist. Women pay a high price for time taken out of work, and this disadvantage persists well beyond the years they spend caring. If men and women shared care equally this would not be the case. Investing in policies that support men to share childcare, and allow women to continue working, will reap financial benefits as well as reducing the gender pay gap. The Government recognises these benefits and made it clear that it wants to support parents to share care. Unfortunately, the flagship policy in this area—shared parental leave—is predicted to make little difference to behaviour.
The Government has lofty ambitions to eliminate the pay gap in a generation. Yet we have found a lack of effective Government policy in many of the areas that contribute to the gap. Reporting regulations do not go far enough to make a real difference. Women who wish to return to work after a break are not being supported to do so—even in areas like teaching where staff shortages are well documented. Aside from increasing the National Minimum Wage, there has been no co-ordinated attempt to address the issues faced by the many women working in low paid sectors. Time after time Ministers responded to our questions by saying change would occur eventually, or through the actions of individual employers.
Eliminating the gender pay gap is too important to leave to chance. It is not enough to hope that culture changes of its own accord. Or that individual employers recognise the benefits of flexible working and attracting women returners to the workplace. Government must take a lead on these issues now.
We call on the Government to match the scope of their ambition in eliminating the gender pay gap with effective action:
The gender pay gap is much more than an equality issue. It represents a drain on UK productivity. By implementing our recommendations the Government can truly begin to ensure employers make the most of women’s skills and experience, leading to a more competitive economy.
Prepared 16 March 2016