By Professor Fiona Carmichael, Professor Scott Taylor and Dr Marco Ercolani, Birmingham Business School
Workplace gender inequality is a global phenomenon. The Gender Pay Gap (GPG), measuring the difference between men’s and women’s mean or median [1] wages, is the most evident and direct manifestation of gender inequality. The persistence of such a basic problem shows how far we have to go in achieving just and inclusive workplaces.
The gender pay gap exists because for many reasons. In a practical sense, most analysts agree that the main factor is that higher paid roles tend to be male dominated, and the lowest paid tend to be female dominated. This is quite different from ‘pay inequality’, which refers to unequal pay for equal work, which has been illegal in the UK since the 1970 Equal Pay Act (though many argue it still exists, as a series of legal cases demonstrate).
Whatever the reasons for this inequality, it is clear that if we simply wait for pay and recognition in the workplace for women to equalise ‘naturally’ over time, without intervention, it is unlikely to happen. The Fawcett Society estimates the current rate of progress means a wait of around a century, assuming continuous change. That means the first generation to be paid equally would be born at the beginning of the next century. Progress in this area is patchy and unpredictable at best, with only slow decline in the GPG over the decade from 2012 to 2022.
This means that women’s economic independence tends to remain lower than men’s, women’s pensions payments tend to be lower than men’s, and organisations benefit from women’s skills and experience by paying them on average less than men. And yet women’s visibility at work has never been higher. Many women occupy positions of power that were impossible to reach only fifty years ago, well within living memory. At the same time, having a few prominent high achieving women does not show equality of opportunity or outcomes. The GPG shows this clearly through the working life course, from unequal graduate job salary offers to unequal pensions.
Fortunately, the GPG can be easily measured, as the well-established statutory requirement for 250+ employee organisations in the UK to complete a gender audit of pay shows. Most striking is the fact that the GPG adversely affects women in more than 80% of UK workplaces. The higher education sector is heavily implicated in this with a GPG of 14.8% in 2021 in line with the national average of 14.9% in 2022.
It is always worth digging into the data behind the headlines in this area. A summary of the post-pandemic UK Quarterly Labour Force Surveys in 2022 quarters 1-3, based on our own calculations, confirms key issues [2]. For those aged 21 to 64 in employment, mean male and female hourly pay is £20.95 and £16.61 respectively a difference of £4.34 implying women’s pay is 20.7% lower (compared with £18.10 and £15.53 pre-pandemic in quarter 4 of 2019, a smaller difference then of £2.57 or 14.2%). Mean weekly pay for males and females are £820.64 and £546.23 respectively, a difference of 33.4% of male weekly earnings (compared with £730.82 and £503.12 in 2019, a difference then of 31.2%). When comparing labour market activity in 2019 and 2022 for all those aged 21 to 64, we see the following differences:
|
Activity: |
Male % |
Female % |
||
|
|
2019 |
2022 |
2019 |
2022 |
|
Employed |
84.38 |
82.76 |
75.06 |
75.13 |
|
Unemployed |
2.43 |
2.26 |
2.25 |
1.91 |
|
Inactive |
13.19 |
14.98 |
22.68 |
22.96 |
|
Total |
100% |
100% |
100% |
100% |
Crucially, there are very similar patterns observed pre- and post-Covid. We can see that the gender gaps in employment and inactivity are somewhat smaller in 2022, due mainly to lower employment overall and higher inactivity rates for males.
Further analysis shows that the GPG reflects fundamental structural inequalities in organisations and in society. This is not by accident – it is designed into workplaces and professions, from the manufacturing or retail shop floor to the boardroom. Research consistently shows that it takes longer for women to progress to the same level of seniority as men at work. Although junior female staff receive similar starting salaries to their male counterparts initially, women rapidly come to earn less than men, are evaluated more harshly in promotion applications, and occupy positions that are not as highly regarded as those usually occupied by men.
What is clear above all from all academic research in this area is that the GPG is not created because women ‘self-select’ out of well-paid high profile roles. The valorisation of masculine traits, judging people through stereotypes, ‘boys clubs’, women being excluded from decision making bodies, and cultural hostility, are all crucial.
There are some easy, if partial, solutions: mandatory training on, for example, bias is a good start, but has to be reinforced by requirements to show how gender balance is being encouraged in selection and promotion panels, job grading and performance management, and above all in pay. Harder solutions involve restructuring workplaces, or providing more and better state-funded childcare to mitigate those career interruptions that more often adversely affect women than men. The most important conclusion of all research in this area is that inaction will maintain inequality, and inequality is bad for people, business, and society.
This blog was written as part of a follow up to the Long Road to Workplace Equality workshop which can be watched here.
[1] Median values are less affected by high earner ‘outliers’ but international comparisons tend to be based on mean values.
[2] Office for National Statistics, Northern Ireland Statistics and Research Agency. (2023). Quarterly Labour Force Surveys, January-March, April-June, July-September, November, 2022. [data collection]. UK Data Service. SN: 8957, SN: 8999, SN:9027, https://doi.org/10.5255/UKDA-SN-8957-3; https://doi.org/10.5255/UKDA-SN-8999-1; https://doi.org/10.5255/UKDA-SN-9027-2
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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.