The UK Gender Pay Gap – an end in sight?

As we enter 2017 the old chestnut of the gender pay gap has become a hot topic for discussion as the promotion of equal pay has become not just a matter of social and moral justice but one of economic necessity as women have become integral to the UK’s economic performance. However, despite the Equal Pay Act 47 years ago, women still earn less than men in Britain today. The difference in pay between men and women remains the clearest and most dramatic example of inequality for women.

What is the gender pay gap?

Overall, women can expect to earn significantly less than men over their entire careers as  a result of differences in caring responsibilities, clustering in low skilled and low paid work, the qualifications and skills women acquire, and outright discrimination (Fawcett Society, 2015).

 

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Gender pay gap down to 5% among UK workers in their 20s, study finds

The Resolution Foundation says women will still earn significantly less during their careers as the gap widens after age 30. Women in their 20s have seen the pay gap halve to 5%, but just as in previous generations the discrepancy compared with men’s earnings widens when they hit 30 and start a family.

In a report highlighting the challenge facing Theresa May in closing the pay gap, the Resolution Foundation said women entering work now would still earn significantly less than their male counterparts over their careers, despite an improvement in pay differentials during the first decade of employment. The Resolution Foundation compared the typical hourly pay of different generations of men and women over the course of their careers.

Women in their 20s earn more than men of same age, study finds

It found that, for workers in their 20s, the pay gap was 16% among baby boomers – born between 1946 and 1965 – 9% among people born between 1966 and 1980, and 5% among those born between 1981 and 2000, referred to as millennials.

“It shows that the gender pay gap has closed for every subsequent generation of women,” the think-tank said. “This reflects positive trends, including rising higher educational participation which women in particular have benefited from, and more women breaking into high-paying industries and occupations.”

However, a sharp rise in the pay gap after the age of 30, seen in previous generations, puts millennial women on course to face a deficit of almost 30% by the time they are in their mid-40s unless there is further government intervention.

 

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Laura Gardiner, author of the Resolution report, said: “It’s important to not overlook the positives. The rate of progress between generations is really welcome, particularly with Generation X. Even in the child-rearing years there’s still really big gains.” But she said there were many issues related to working part-time, such as missing out on informal chats in the pub, that needed to be tackled. “I wouldn’t want to play down the policy success we’ve had, but the area where there’s probably the most we could do is around the part-time penalties, and the opportunities for promotion and progression, the cultural stuff,” Gardiner said.

The question is will it take until 2069 to bridge the UK gender pay as suggested in a report by Deloitte’s last year? Time will tell and no doubt in 2018 we will be pondering the question again. In the meantime, wishing you a Happy, Healthy and Prosperous (in equal pay terms) 2017.

If you are interested in this topic please feel free to contact me – Peter.Beszter@Staffs.ac.uk

This semester I will be teaching the Managing People through Performance and Reward module which will be examining the UK gender pay gap.

 

Dr Peter F. Beszter

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