The gender pay gap is the difference between male and female earnings. This difference is expressed as a percentage of male earnings. The gender pay gap reduces women’s lifetime earnings and also affects their pensions - this is one of the significant causes of poverty in later life for women.
The Office for National Statistics (ONS) collects data on earnings in the UK which it uses to calculate gender pay differences. In 2016, the average pay of women working full-time was only 90.6% of men’s pay. This means that compared to men, women stopped earning on the 10th November 2016 – they were effectively working for no money after this date, which is referred to as Equal Pay Day. On average, a woman working full-time in 2016 earned £5,732 less a year than a man (Allen, 2016, Fawcett Society, 2016). When part-time employees are included, the gender pay gap was 18.1% in 2016. The pay gap varies across sectors and regions, rising to up to 55% in the finance sector. In 2012, 64% of the lowest paid workers were women, contributing not only to women's poverty but to the poverty of their children.
Though the gender pay gap is gradually decreasing over time, there have also been recent reversals in progress on this issue. In 2013, compared to the previous year, the average pay of women working full-time fell by .9% to 84.3%. For all workers – both part-time and full-time – the gender pay gap was 19.1 % in 2013, having risen from 18.6 per cent the previous year. This means for every £1 earned by a man in the UK, a woman earned only 81p. Gender pay gap is higher when part-time workers are included because of the low hourly rates of pay in part-time work and the concentration of women in these jobs due to the occupational segregation of the labour market (for eg., 'the five C jobs' are mostly done by women - cleaning, cashiering, caring, clerical work and childminding - and these jobs are poorly paid).
The austerity measures and the changes to the labour market since 2012 (e.g., the cuts to public sector jobs, the pay freezes in the public sector, increasing use of zero hours contracts in the private sector) have contributed to the widening gender pay gap in 2013.
The gender pay gap is a complex issue with many causes, which are often inter-related.
• Direct discrimination explains why women sometimes still earn less than men - when women are paid less than men for doing the same job. But because of the success of equality legislation over the years, this factor only explains a limited part of the gender pay gap.
• Women’s competences and skills are undervalued, so women frequently earn less than men for doing comparable jobs - that is, jobs of equal value. Pay scales for jobs requiring similar skills, qualifications or experience tend to be lower when they are predominantly done by women. For example, in 2012, women who had worked as cooks, cleaners, catering and care staff for Birmingham City Council won compensation because they were denied bonuses which were handed out to employees in traditionally male-dominated but similar-level jobs such as refuse collectors, street cleaners, road workers and grave-diggers.
• Another way in which women’s competences and skills are undervalued could be reflected in the promotion rates in an organisation - gender stereotypes mean that women may be perceived as less competent or 'managerial' - or that their status as mothers may mean that organisations question their commitment to work (being a father does not seem to create similar effects). Recent research showed that women are promoted at lower rates than men. In one study, researchers sent mock applications for science lab jobs to US universities and randomly allocated male or female sounding names to similar applications. They found that not only did universities think that the "male" applicants were more competent, they offered them higher starting salaries!
• Women and men still tend to work in different types of jobs. How many teachers in your primary school were men? Not only does society consider jobs to be gendered, that is, men’s jobs and women’s jobs, but such work is also accorded different value. Another reason why occupational segregation effects gender pay gap is that women often work in sectors where wages are, on average, lower than in jobs that are dominated by men. More than 40% of women work in health, education and public administration while only 29% of scientists and engineers in the EU are women (EC, 2008, p.14).
See this document for further information: gender_pay_gap_briefing_paper2.pdf
• Traditions and stereotypes may also influence the choice of educational paths and employment patterns. Research shows that school career services often encourage girls and boys into traditionally gendered occupations.
• Gender pay gap also reflects the gendered division of household labour, whereby caring for the sick and elderly, bringing up children and housework are considered women’s work. Because domestic work is not equally shared between men and women, women have more frequent career breaks, mostly to bring up children. This, in turn, has a negative impact on their careers.
Gender pay gap in the UK: 40 years after the first Equal Pay Act
The ONS have conducted research into the causes of the gender pay gap. This found the key factors explaining the pay gap were as follows:
- 22 per cent of the gap is due to the different industries and occupations in which women work
- 21 per cent of the gap is due to differences in years of full-time work
- 16 per cent of the gap is due to the negative effect on wages of having previously worked part-time or of having taken time out of the labour market to look after family
- only 5 per cent of the gap is due to formal education levels
- A significant proportion (36 per cent) of the pay gap could not be explained by any of these factors, suggesting direct discrimination may still be an important factor
In Britain, as in every country in the world, women have historically been paid less than men for doing the same job. Contrary to widespread belief, this struggle for equal pay did not start in the 1960s, but has been taken up by women workers since the late 19th century.
During WWI, women took on men’s jobs while the men were deployed in the armed forces. When they realised that they were expected to do exactly the same work as men but for lower wages, they raised the issue of equal pay through several strikes during this period. One of the early strikes for equal pay was in 1918 by women tram and bus conductors, which resulted in a settlement of a bonus in pay equal to that paid to men workers.
During the 1920s and 30s, state policy in the UK also reflected the common practice of lower wages for women, both in pay rates and in the lower rates of unemployment benefit, to which they were entitled. Women workers also campaigned against these injustices. With women’s suffrage, women’s groups and trade unions sought to mobilise women to demand equal pay and equal unemployment benefit as an election issue. The issue of equal pay was again raised during WWII, and became an increasingly articulated demand by trade unions and women’s organizations from 1950s onwards.
In 1968, the issue of equal pay hit the newspaper headlines. Women machinists at the Ford Car Plant in Dagenham, Essex, sewed covers for car seats. On 7th June,1968, they went on strike because they were being paid less than the men (87% of men’s wages) and, in addition, the machinists’ work had been downgraded to ‘unskilled’. After three weeks on strike, they returned to work accepting an increase in women’s wages to 92 per cent of what was paid to men. Still not quite equal pay, was it?
However, their actions contributed to the campaign for equal pay and the passage of the Equal Pay Act (1970). According to this act, men and women are entitled to equal pay and terms of employment.
The Equal Pay Act was passed in 1970 but was not implemented until January 1976. During these years employers often re-graded jobs by changing job titles to evade the Equal Pay Act and to justify unequal wages for men and women doing the same jobs, for example, from Personal Assistant to Typist. Following campaigning by trade unions, there was much progress on equal pay as new laws extended and strengthened the first equal pay legislation.
More than 120 years after this issue was first raised, unequal pay still remains an important reason for women’s lower lifetime wages and poverty in old age in most countries.
The provisions regarding equal pay are now in the Equality Act 2010. According to this Act, men and women are entitled to equal pay and conditions if they are doing the same job; like work (work that is the same or broadly similar); work rated as equivalent (different work, but which is rated under a job evaluation scheme as equivalent); or work of equal value (that is, work that requires similar effort, skill and decision-making). Under this law, it is possible to bring a claim up to six years after leaving a job.
Forty years after the first equal pay legislation, women can still expect to be paid less than men. The law has made a big difference - the gap between men and women’s wages has declined over the years. However, it still remains very difficult for women to gain equal pay. A woman has to first find out that she is being paid less than a man in a comparable job - people are often secretive about how much they are paid. It also takes a lot of money and time to bring a case against an employer who will have far more resources than an individual employee. Where women are members of trade unions, they have been helped by their union to take their case to the employment tribunal.
From July 2013, the Coalition government announced new upfront fees of up to £1,200 which workers will have to pay for taking employment tribunal cases against their employers. This fee applies to workers pursuing sexual harassment or race discrimination complaints after they have been unfairly dismissed. Trade unions have criticised this move – which ministers claim will save money for businesses and taxpayers – as the latest attack on workers' fundamental rights. The TUC general secretary, Frances O'Grady, said: "Today is a great day for Britain's worst bosses. By charging upfront fees for harassment and abuse claims, the government is making it easier for employers to get away with the most appalling behaviour."
Fawcett Society is concerned that upfront employment tribunal fees will prevent women from seeking justice when they discover they are being paid less than a male counterpart. Latest evidence shows that there has been a reduction of 70% in the number of cases brought to the tribunal since the introduction of upfront fees.