Equal Pay Day: The buck stops here

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By Dr Juliet E. Kele, Research Fellow In HRM
Department of Management and Lloyds Centre for Responsible Business, University of Birmingham

The 20th November 2020 is the day when women in full-time work stop being paid, on average, relative to men. The Fawcett Society, a leading UK charity campaigning for gender equality and women’s rights, marks the date as Equal Pay Day each year using data from the ONS on the full-time mean average gender pay gap, which is 11.5% – down from 13.1% in 2019. The mean gender pay gap for all employees (not just those working full-time) is 14.6% this year, down from 16.3% last year.

Equal pay for equal work’ was enshrined in law 50 years ago in the Equal Pay Act 1970 and reinforced in the Equality Act 2010, but pay discrimination continues. Since 2017, British companies who employ more than 250 staff are required to publish their gender pay gap data. However, the coronavirus pandemic has had an adverse effect on the enforcement of these reporting regulations this year.

According to the latest data, the sectors in the UK economy with the worst gender pay gap generally are construction (23%), financial and insurance services (22%) and education (20%). But EasyJet declared a sky-high pay disparity of 47.9%, up from 45.5% the previous year, reportedly due to the recruitment of more female cabin crew.

Moreover, few employers report on their disability and ethnicity pay gaps. When they do, they tend to refrain from detailed analysis of group differences and use binary categories. The ONS recently reported a 2.3% gap in average earnings between white and minority-ethnic employees in England and Wales in 2019, the smallest gap since 2012, when it was 5.1%. However, analysts are concerned about Pakistani workers, who are the lowest-paid – 15.5% less than their white British counterparts – despite holding higher degree-level qualifications.

The situation is even more unequal when looked at globally, with the World Economic Forum reporting that women are paid 63% of what men earn on average and that the global pay gap will take 202 years to close on the current trajectory. This isn’t only a reflection of unequal employment practices in less economically developed countries. In the USA, the Equal Pay Today Campaign found for every dollar paid to white, non-Hispanic men, Black women typically made 62 cents, Native-American women earned approximately 60 cents and Hispanic women typically earned only 55 cents.

These figures are shocking and highlight the extent of both gender and racial discrimination in the US. According to this data, Latina women are at such a disadvantage that they need to work nearly 23 months to earn what white men earn in just 12. With the Democrats winning the US elections, there is hope that the situation might improve as companies are more likely to be held to account on this issue by the new administration.

In the UK, while reporting of pay gaps has been a step in the right direction, organisations like the Equality and Human Rights Commission (EHRC) argue that the government should also require employers to publish strategic, targeted action plans to eliminate their pay disparities. Other recommendations include addressing differences in educational subject and career choices, academic attainment and access to apprenticeships.

Meanwhile, the Fawcett Society is appealing for even greater salary transparency and supporting the #RightToKnow campaign – part of the Equal Pay Implementation and Claims (EPIC) Bill 2020 recently introduced into Parliament, which calls for wider data to be made available. While measures to create greater pay transparency are welcomed, there needs to be a strong change in the culture of all organisations that prevents and condemns the undervaluation and under-appreciation of the work of women relative to men, with fierce reprimands for employers who believe that it is still acceptable in 2020 to continue to do so.

Dr Kele leads on the Equality, Diversity and Inclusivity Group at the Birmingham Business School. Staff interested in knowing more about improving equality in the workplace can find out more on the staff intranet.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham.

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