2Understanding the gender pay gap
Causes of the gender pay gap
18.Much of the popular discourse around the gender pay gap conflates it with equal pay. Indeed, “Equal Pay Day”, which has gained increasing publicity across the UK, uses gender pay gap figures to demonstrate how women are paid less than men. But as Shelia Wild says:
A measure of equal pay is a measure of the work that you are doing and the pay that you get for it. When you measure equal pay in the workplace, you are looking at job demands, and that is written into the legislation. There is a phrase in there, “equal pay for equal work”. Equal work means that you are doing the same or a similar job to a man, or work that has been rated as equivalent under a job evaluation scheme.13
19.Confusion between equal pay and the gender pay gap can obscure analysis of the latter. The focus on equal pay creates a tendency to focus on direct discrimination against women as the cause of the gender pay gap. But as the EHRC point out, the causes of the gender pay gap are much broader:
Many factors influence women’s employment opportunities and progress at work which are reflected in the pay gap. These are:
- gendered education and career choices
- occupational segregation with women confined to lower grades within organisations and concentrated in lower paid occupational sectors
- devaluation of work deemed a ‘female’ occupation
- non-continuous employment and a shift to part-time work due to caring responsibilities, especially when children are young
- occupational downgrading resulting from women working below their potential due to lack of quality part-time jobs and the absence of flexible career paths
- an unexplained gap sometimes attributed to direct or indirect sex discrimination and systemic disadvantage14
The part-time pay penalty
20.Data on the gender pay gap clearly demonstrate the impact of part-time working on the overall figure. Whilst the full time pay gap stands at 9.4%, the addition of part-time workers to the measurement increases the gender pay gap to 19.2%.15 This is because 41% of female employees work part-time compared to 12% of male employees16 and hourly wages are lower for part-time workers compared to those working full time. Median hourly pay for full-time employees was £13.29 (excluding overtime), compared with £8.44 for part-time employees.17 Just looking at female employees, the pay gap between part-time and full-time women workers currently stands at 32%.18
21.This is a particular problem for older women, who are more likely than their younger counterparts (excluding those aged under 19), to work part-time.
Figure 3: Men and women in part-time work by age
Source: Census 2011 via Joseph Rowntree Foundation
22.The Timewise Foundation has found that “the majority of women with children in the UK want to work part-time or flexibly to fit with their caring responsibilities.”19 Their recent research on women returners found that 70% of women returning to work after having children wanted a job with flexibility and only 13 % want a full-time job.20
23.Not all women working part-time do so through choice, however. UNISON, which has one million women members almost half of whom work part-time, noted that “some occupations like hospital domestics and school meals workers, are nearly all part-time and are almost exclusively staffed by women.”21 A similar point was made by Dr Alison Parken from the University of Cardiff:
As much as 70% [of work] in retail is offered on a part-time basis … At the bottom end of the labour market in particular it is very easy to get stuck in those part-time jobs. There is an association between full-time working and commitment; full-time working absolutely correlates to progression. In those very low-paid jobs that women do at the bottom end of the labour market … there is very little training or upskilling. They are in flat structures and can be stuck there over their lifetime.22
24.It is clear that the part-time pay penalty is the result of several factors: the concentration of part-time jobs in lower skilled, lower paid occupations; limited promotion and progression opportunities for part-time workers; and the constrained choices of those looking for part-time employment. These issues are all discussed further in Chapter 4.
Caring responsibilities
25.One of the reasons women are concentrated in part-time work is the disproportionate responsibility they take for unpaid caring. Underemployment or unemployment because of family and caring responsibilities is also common among women over 40. Labour Force survey data shows 2.4 million women who are not in work want to work and over 1.3 million women want to increase the number of hours they work.23
26.Carers UK note that:
The majority of carers are women. Almost 6 in 10 (58%) of carers at the last Census (2011) were women. Caring falls particularly on women in their 40s, 50s and 60s, with 1 in 4 women aged 50-54 having caring responsibilities for older or disabled loved ones, compared to 1 in 6 men.24
27.Sandwich caring, looking after young children at the same time as caring for elderly or disabled relatives, also has a disproportionate impact on women’s employment. Carers UK found women were four times more likely than men to have given up work because of multiple caring responsibilities,25and that women aged 45-54 were more than twice as likely as other carers to have reduced working hours as a result of caring responsibilities.26
28.Childcare responsibilities are also a factor in women’s ability to access well-paid work. The Institute of Directors and the Family and Childcare Trust were just two of the many organisations which raised the issue of the “maternity penalty” as a component of the gender pay gap. As the Family and Childcare Trust explain:
This wage disadvantage is proportionally higher for better qualified women but research suggests that even for women who had GCSE level qualifications or below (Level Two or below) and controlling for other factors, these women’s average hourly wages were 14 per cent lower if they had moved in and out of work after having children than if they had a stable career trajectory.27
29.We heard extensive evidence on the difficulties women face returning to work after a break for caring. These are analysed in further detail in Chapter 6.
Occupation segregation
30.Occupational segregation is widely acknowledged to be a key factor in the gender pay gap. The Government cites research from the University of Manchester that “occupational segregation has long been known to be responsible for a substantial element of the gender pay gap [and] … might account for 22% of the gap.”28 As Professor Jill Rubery from the University of Manchester puts it:
The problem with the gender pay gap is not solely or mainly to do with variations in pay for men and women in roughly the same kind of work but with the undervaluation of women’s work through its concentration in lower paying firms and sectors.29
31.This occupational segregation is particularly significant for women aged over 40 who are more heavily concentrated in industries associated with low pay, low status and low levels of progression. In 2012, over half of women aged 50–64 worked in public administration, health and education, compared to one quarter of women aged 16–25.30
32.Younger women are still impacted by occupational segregation though. Young Women’s Trust polling of apprentices aged 18–30 shows the pay gap beginning in training:
Young women are earning just £4.82 an hour compared with young men’s £5.85 an hour. We think this is most likely to be explained by the gendered occupational segregation that we see even in apprenticeships which will not be addressed by current government proposals to close the pay gap.31
33.Encouraging girls to pursue careers in STEM may address the issue of occupational segregation. However, evidence from the Science Council shows:
More women achieve first degrees and postgraduate degrees in a STEM subject than men, yet women make up only 41% of the science workforce.32
The barriers to women’s progress that the Science Council point to are the same ones that have recurred across our inquiry:
Poor promotion and recruitment practices, few part-time roles available at more senior levels in STEM, and a lack of work-life balance in academia are consistently raised within the Science Council community as major concerns relating to gender pay issues. There is evidence to suggest that career breaks, particularly at the early family-formation stage, hinders the progression of women to the highest occupational levels.33
Solving the problem of women’s participation in STEM careers requires these issues to be addressed, rather than simply focusing on getting more girls to study STEM subjects.
Is “women’s work” worth less?
34.Why are the sectors women work in worse paid than those where men dominate? One explanation, presented to us by Professor Rubery and Anna Ritchie Allan from Close the Gap, is the systemic undervaluing of women’s work. As Anna Ritchie Allan put it:
When we look at the types of work that are female dominated, low paid and undervalued, they are centred on work that has been done traditionally by women in the home. It is because those skills are undervalued—caring, cooking, cleaning and clerical work—because they are done by women that they result in low pay.34
35.Scarlet Harris from the TUC suggested the problem was even more deep rooted:
Low pay tends to follow where women work. Where men come into traditionally feminised sectors, the pay tends to go up; where women move into sectors where they have not been before the pay tends to go down.35
Academic research36 suggests that women’s wages do not increase as expected when they enter higher paid professions. This may have implications for the Government’s strategy of encouraging more girls to enter STEM professions as a means of reducing the gender pay gap.
Do women choose lower paid jobs?
36.Some economists, like Professor Len Shackleton from the University of Buckingham, argue that women are paid less than men because they choose jobs with other, non-financial returns. Professor Shackleton cited evidence that:
Women spend less time spent commuting, are less likely to work unsocial hours, less likely to face physical danger at work (the industrial accident rate for men is far higher than for women) and less likely to work outside or in isolated conditions. Wellbeing surveys suggest that they are on average happier at work.37
He asserts that these factors compensate for the lower levels of pay they receive for their work.
37.This idea that women willingly “choose” to work in lower paid roles was strongly criticised by other witnesses we heard from, including Scarlet Harris from the TUC:
Yes, a woman with caring responsibilities may choose to work part-time but that is not necessarily because she desperately wants to spend more time at
home and wants to work part-time. Certainly there is evidence that lots of women who are working part-time would like more hours but they cannot get them or they cannot find childcare, or other forms of care, to fit in around their work, so they are constrained to do that work.38
Direct discrimination
38.Robust measures of the part played by direct discrimination in the gender pay gap are difficult to find. Academic studies try to control, as far as possible, for observable differences in men and women, for example differences in education. Any residual gender difference in wages is sometimes then attributed to discrimination. This is problematic because the residual difference includes anything that is not accounted for in the study. Therefore the remaining difference between men and women’s wages may be down to discrimination, but other unmeasured factors could also be the cause.
39.Professor The Baroness Wolf of Dulwich, from King’s College, London, told us there was little evidence that direct discrimination is a major factor in the gender pay gap today. However, she did acknowledge that discrimination had been an issue for older women in the past:
Among people under 40, in comparable jobs, with comparable time in the workplace, there is no evidence of continuing gender discrimination in pay. Among cohorts over 40, and especially those now over 50, we can still observe the impact of having started work in more ‘discriminatory’ times, but this is a carry-over.39
40.Current discrimination against older women was raised by the Fawcett Society. It cited research by AGE UK,40 which found that 60% of older people believe age discrimination still exists in the workplace, and a survey by the teaching union NASUWT of older members.41 This found that nearly two fifths of respondents had encountered job adverts which appeared to discourage older teachers from applying. Ten per cent of respondents reported that they had been told by senior management that their age would be a barrier to their future professional progression. Fawcett conclude that, “Older women are vulnerable to the dual discrimination of ageism and sexism.”42
Employment tribunals
41.Reducing or scrapping employment tribunal fees was raised as a means of reducing the gender pay gap by a number of those responding to our inquiry including: Close the Gap; the TUC; the Women’s Equality Party; the Fawcett Society; Business in the Community;
and the Royal College of Midwives (RCM). The RCM outlined what had happened since tribunal fees of £1,200 were introduced by the Coalition Government:
In Q1 2013 there were nearly 7,928 equal pay cases but by Q1 2014 this had dropped to 1,236–a fall of 84%. Numbers have picked up since but the claims are still less than half what they were before the introduction of fees.43
42.Fees for employment tribunals were only introduced in July 2013 so it is not yet possible to measure their impact on levels of discrimination in the workplace. However, when there were no tribunal fees there was still a significant gender pay gap so it is unclear what impact reducing or eliminating fees would have on the overall gap. Some experts have argued that tribunal fees may be having an impact on workplace culture. As Michael Newman of the Discrimination Lawyers Association explained:
The fees just place a barrier for people to access their rights. That does not just affect the legal sphere but also the culture. If employers feel that their employees are less likely to enforce their rights, they become less powerful. It is not just about people who bring claims to tribunal; it is about how employers act knowing that the laws are there and will be enforced. Fees definitely feed into that.44
43.Tim Thomas from the EEF Manufacturers’ Organisation strongly disagreed that employers were behaving differently, but acknowledged the dramatic reduction in tribunals being brought:
I do not get any indication from the members I speak to that their behaviour has changed one jot since the extraction of fees. They still take all these issues exceptionally seriously.45
44.Paying men and women differently for the same, or equivalent, roles has been illegal since 1975. Discrimination on the grounds of age or gender is also prohibited. There are clear legal remedies to both these issues. The question of whether employment tribunal fees are having an impact on workplace culture was raised during this inquiry. Our colleagues on the Justice Committee are currently investigating this issue. We await their findings on the appropriate levels of fees for employment tribunals with interest.
45.The causes of the gender pay gap are complex and varied. Direct discrimination plays a part in women’s lower wages, particularly for older women who entered the labour market on less equal terms to men and who may face dual discrimination on the grounds of age and gender. However, structural factors are the key cause of the gender pay gap. These include occupational segregation; the part-time pay penalty; women’s disproportionate responsibility for unpaid caring; and women’s concentration in low-paid, highly feminised sectors.
46.We welcome Government action on better careers education for girls; increasing the number of women on boards; and supporting more women into senior roles. However, not enough is being done in the following key areas:
- Addressing the part-time pay penalty and flexible working
- Supporting parents to share childcare equally
- Supporting women back into the workforce after time out of the labour market
- Tackling low pay in highly feminised sectors
13 Q4
15 ONS Annual Survey of Hours and Earnings, November 2015
16 HoC briefing paper Economic Indicators January 22, 2016 Number 02795
17 ibid
18 ibid
20 ibid
22 Q7
23 Labour Force Survey, Q4 2012 cited by Women’s Business Council, Maximising Women’s Contribution to Future Economic Growth, June 2013.
25 ibid Para 16
26 ibid Para 15
30 TUC, Older Women and the Labour Market (March 2013) p10
34 Q104
35 Q101
36 Bolton and Muzio The paradoxical processes of feminization in the professions Work Employment & Society June 2008 vol. 22
38 Q113
40 Harrop and Jopling (2009) One Voice: Shaping our ageing society, Help the Aged and Age Concern
41 NASUWT (2010) No Experience Necessary: A survey of the experience of age discrimination of older teachers in the UK
44 Q182
45 Q184
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Prepared 16 March 2016