New Working Paper on Scotland’s Gender Pay Gap Statistics Finds that Progress has Stalled on Realising Equality for Women at Work
Close the Gap has published a new working paper on gender pay gap statistics with a specific analysis of Scotland’s pay gap.
The paper uses data from the Annual Survey of Hours and Earnings(ASHE) tables, from the UK Office for National Statistics, to analyse pay differentials between women and men working in Scotland.
As detailed in table 1 below, the overall mean gender pay gap has seen no difference which remains stubbornly high at 14.9% in 2016, compared with 14.8% in 2015. This means that on average women continue to earn 85p for every £1 men earn.Very little progress has been seen on the part-time pay gap with a very modest decrease of 1.3 percentage points to 32.2%, when comparing women’s part-time average earnings to men’s full-time earnings, illustrating the fact that part-time work is concentrated in low-paid, undervalued, stereotypical female jobs and sectors such as cleaning and care.
This very small decrease is partly due to the introduction by the UK Government of the National Living Wage which contributed to an increase of the average earnings of the lowest paid groups of workers to £7.22 for the average full-time female worker, and £7.20 for average part-time female worker. Women are still far more likely to be concentrated in low-paid, part-time work therefore likely to benefit most from the introduction of a new minimum wage bracket.
As table 6 from the report (and above) shows, the public sector overall (12.1%), full-time (7.3%) and part-time (26.8%) pay gaps are lower than the national averages, 15%, 11%, and 32%respectively, whilst the private sector pay gap is considerably higher for each group (23.6% for overall, 19.6% for full-time, and a staggering 40.6% part-time pay gap. The public sector pay gap also decreased very slightly by 0.9 percentage points which may have contributed to the overall reduction in the part-time pay gap, as women are more likely to work in the public sector, very often in part-time jobs.
For the first time the new ASHE release has allowed for pay gaps in the third sector to be calculated. The figures for the full-time (11.9%) and overall pay gap (15.6%) were close to the national averages however the part-time pay gap was considerably higher at 38.6% suggesting that there is a lack of quality part-time jobs in the third sector as there is across the rest of the labour market.
The working paper also provides information on the average difference in earnings in across different age groups, occupational groups, and an analysis of the Scottish gender pay gap over time.
The most recent data highlights the stubborn nature of the gender pay gap. The figures are useful as an indicator of the persistent and entrenched inequalities within the labour market, but with negligible change in recent years, it’s a clear signal that current Scottish policy responses to the pay gap are inadequate. Across Scotland, women and men are still segregated into different types of jobs, and a lack of quality part-time and flexible work sees women under-represented in higher-paid senior roles. Time will tell whether the new pay gap regulations will influence large employers to not only report their pay gaps, but to develop actions to address the barriers that women face. What is clear though is that Scotland needs a coherent strategy to tackle the complex and inter-related causes of women’s inequality at work if the pay gap is to be closed.
The full report can be accessed here.
Today, Close the Gap is relaunching as a registered Scottish charity. The focus of our work will not change – we will continue to work with policymakers, employers and trade unions to ensure that policies, programmes and services consider the needs of women, and to tackle the causes of the gender pay gap. Becoming a charity provides us with the opportunity to expand that work, and at a time when employment rights are under threat with the impending Brexit, and when we are seeing an increasing pushback on women’s rights across the world, this is the right time for just that.
We were previously a partnership initiative, and working with our project partners has allowed us to build up a wealth of experience and knowledge that we will take with us in our new form. We will continue to work with together with our partners in the future, and extend a warm thanks to them for their support throughout our transition.
This is a positive step for Close the Gap, and we’re really looking forward to the opportunities it brings.
Written by Lesley Macniven, Equate Scotland’s Women Returners Programme Lead
Although most jobs in the near future will require STEM skills, women make up only an estimated 25% of the workforce in Scotland’s STEM industries - Science, Technology, Engineering and Maths. One reason for women’s under-representation is that only 27% of women who leave University qualified in a STEM subject, remain in that industry long term.
The pipeline of female talent is notoriously leaky, as a range of planned and unplanned life events interrupt careers, leaving some women unsure how to return.
Equate Scotland has worked across the Scottish STEM landscape for the last ten years, as change agents and experts on increasing women’s representation in STEM. Our latest initiative aims to find that pool of hidden talent and help them restart their STEM careers.
In partnership with Prospect (the trade union for professionals), Equate Scotland has initiated a Women Returners career development programme, funded by the Scottish Government.
The aim is to launch women returning from a career break of two years or more back into STEM employment, through structured development to refresh skills and knowledge and rebuild confidence in a working environment.
Bespoke ongoing support, delivered with our partners, The Open University, includes workshops, online learning, networking events and one-to-one career clinics. The purpose is to identify and build on existing transferable skills. This will enable women to apply for a paid three-month placement with participating employers, to gain on-the-job experience.
A pilot programme in 2016 received phenomenal feedback from the 15 women participants:
“I would recommend [the programme] to other people. It’s an amazing opportunity to get on it. It was really beneficial.”
“I’ve got a lot of confidence to do with my children’s lives and my volunteer work. But I had a lot less confidence about going back to work. The whole programme has given me that sort of confidence.”
“I moved from a story where I hadn’t done any work for nine years, to a story where I’ve never stopped working, applying my skills, solving problems, achieving ‘continuous improvement’.”
– Women Returners
In recognition of the value of this hidden talent, the Women Returners Annual Report 2016, from the All Party Parliamentary Group Women and Work, recommended every employer with over 250 staff should consider having their own Returnship programme. Until that happens Equate Scotland can fill the gap.
Are you, or are women you know, eligible to join our Women Returners Programme? You need to be:
- qualified in Science, Technology, Engineering or the Built Environment
- currently not working in any of these industries
- now considering how to return to work in STEM
Employers committed to gender diversity, interested in accessing our pool of female talent through a three month paid placement, can contact Lesley by emailing email@example.com.
Follow us on twitter #womenreturnersscot @EquateScotlandhttp://www.equatescotland.org.uk/projects/women-returners/
2016 has seen a greater focus on the economic benefits of reducing gender pay gap. Close the Gap published Gender Equality Pays, which sets out the evidence of the economic case for addressing women’s labour market inequality. A range of global business organisations including McKinsey and Co, and PwC have also published reports on the business and economic benefits of addressing the gender pay gap.
At the beginning of December, the UK Government published a revised version of the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. The regulations are still awaiting parliamentary approval, but are expected to come into force on the 6 April 2017 with employers in England, Scotland and Wales with 250 or more employees required to publish their first gender pay gap report before 4 April 2018.
In August the UK Government consulted on mandatory pay gap reporting in the public sector in England, and it is anticipated that similar regulations for English public bodies will be drafted in the due course.
What do employers need to do?
Private and third sector employers with 250 or more employers will be required to publish:
- The difference between male employees’ mean average hourly rate of pay and female employees’ mean average hourly rate of pay, expressed as a percentage.
- The difference between male employees’ median average hourly rate of pay and female employees’ median average hourly rate of pay, expressed as a percentage.
- The difference between male employees’ mean bonus pay and female employees’ mean bonus pay, expressed as percentage.
- The difference between male employees’ median bonus pay and female employees’ median bonus pay.
- The proportions of male and female employees who were paid bonus pay.
- The proportions of male and female employees in the lower, lower middle, upper middle and upper quartile pay bands.
- Information must be published within 12 months of a single pay period around the ‘snapshot date’ of 5 April 2017. This means that the first pay gap report will be due by 4 April 2018, and on the same date each year after.
Which employees are to be included?
Pay gap calculations must be based on “full-pay relevant employees” which is defined as “a relevant employee who is not, during the relevant pay period, being paid at a reduced rate or nil as a result of being on leave”. “Leave” includes annual leave; maternity, paternity, adoption or shared parental leave; sick leave; and special leave.
This was an amendment following employer concerns that including female employees who were on leave with a reduced level of pay such as maternity leave would leave to an distorted pay gap.
Which elements of pay are included?
“Ordinary pay” means basic pay; allowances; pay for piecework; pay for leave; and shift premium pay.
“Bonus pay” means any remuneration that is in the form of money, vouchers, securities, securities option, interests in securities, profit sharing, productivity, performance, incentive or commission.
How to calculate pay gaps
The regulation includes helpful detailed methodology on calculating:
- Gross hourly pay, using an employee’s normal working hours where applicable, and adopting a 12-week reference period for employees whose hours vary per week.
- Mean and median pay gaps for ordinary pay and bonus pay.
- The proportion of male and female employees according to quartile pay bands.
Under the Public Sector Equality Duty listed Scottish public bodies have had to publish their gender pay gap and occupational segregation since 2013. The regulations relating to the Scottish Specific Duties do not include any methodology which created some confusion, and contributed to poorer performance than anticipated which was identified in Close the Gap’s assessment work of the duty in 2013 and 2015.
How is information to be published?
Employers are required to publish the information with a written statement, signed by a director, on their website which is accessible to the public, and to remain there for at least three years from the date of publication.
How will it be regulated and enforced?
There are no penalties set out but this will be reviewed if levels of compliance are not satisfactory. The UK Government will “from time to time” carry out a review of the regulations and publish a report of its findings which includes whether the objectives of the regulations are achieved; assess whether the objectives remain appropriate and “is so, the extent to which they could be achieved with a system that imposes less regulation”. The first review must be carried out within five years, and future reports published at intervals of no more than five years after that.
The Explanatory Notes states that failure to comply with the regulations will constitute an “unlawful act” and empowers the Equality and Human Rights Commission to take enforcement action, although no specific provision to achieve this has been included in the regulations. There is no additional information as yet on the UK Government additional resource to the Commission to undertake compliance work. In our consultation response we called for the Government to ensure that EHRC was adequately resourced to carry out compliance and enforcement work, and that ring-fenced resources are allocated to the Commission in Scotland to undertake work with employers in Scotland.
Will mandatory pay gap reporting realise change for working women?
The regulations are a welcome first step in addressing the systemic pay inequality that women experience in the labour market. It will ensure that accountability in the private and third sectors reflects accountability in the Scottish public sector where public bodies have been publishing their pay gaps since 2013. However, Close the Gap remains concerned that the threshold of 250 employees excludes SMEs which account for 99.9% of private sector companies, and most third sector organisations.
Women are more likely to work in smaller organisations, and smaller employers are less likely to have good equalities practice because they often don’t have a dedicated HR role within their business. Smaller employers are also less likely to have undertaken an equal pay review or taken any action to address pay gaps.
The regulations also don’t go far enough, as there is no obligation for employers to take further action on the findings of their pay analysis. Without this obligation there is a risk that employers will simply report their pay inequalities without undertaking actions to address the problems. It would be a costly exercise for employers simply to analyse and report, but fail to use their data to its fullest in developing concrete work to effect change. Only time will tell, and we will be keeping a close eye on this reporting.
You can read Close the Gap's response to the UK Government consultation on closing the gender pay gap here.
Today marks Equal Pay Day in the UK when women will in effect be working the rest of the year for free. This day reflects that on average, women are paid less than men. In Scotland gender pay gap is 15%.
The pay gap is stubborn with little significant movement in recent years, reflecting the persistent and entrenched inequalities women face at work.
Women and men are still segregated into different types of work based on gender stereotypes, and despite post-recession rises in the female employment rate, women’s employment in general has become increasingly precarious. So-called ‘women’s work’ continues to be concentrated in low paid, undervalued roles such as care and cleaning with an increasing number being on temporary and zero hour contracts.
The gender pay gap contributes to women’s higher levels of poverty at a time when women’s economic independence is under attack by the UK Government’s ‘welfare reform’. 85% of the cuts implemented under the austerity agenda so far have come from women’s incomes.
In 2017 legislation will be introduced by the UK government that will require private and third sector organisations with more than 250 employees to publish their gender pay gap, and the gender gap in bonus earnings. This is a helpful first step towards increasing accountability within the private sector, and will align larger private sector employers with existing requirements for the Scottish public sector where organisations are already obliged to report their pay gap and occupational segregation information under the public sector equality duty. However reporting alone is not enough to realise change for working women. Close the Gap’s response to the UK Government consultation on the new measures sets out the imperative of employers taking action to address gender gaps and inequalities, and the new regulations do not require employers to do this.
The economic case for addressing women's labour market equality is clear: closing the gender gap in employment would add £17bn to Scotland's economy.
Close the Gap has created a free online tool for employers which enables business to identify the benefits of gender equality to their organisation. Think Business, Think Equality offers businesses a series of tests which lets them assess their current employment practice, and identifies small changes they can make to advance equality, while at the same time improving productivity.