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50 years on, what will it take to realise equal pay for equal work?
Today marks the 50th anniversary of the passing of the Equal Pay Act, which guarantees equal pay for equal work for both women and men. Coronavirus aside, the world now looks very different than it did fifty years ago. We have seen some important steps towards closing the pay gap, however we are still a long way away from true equality for women. One place where this is acutely clear is the value attributed to women’s work.
Equal pay was and is an important emblem of the fight for women’s equality. The issue of equal pay is often confused with the gender pay gap, but unequal pay is only one of the wide range of causes of the gender pay gap. Equal pay for equal work means that a woman should not be paid less than a man for doing the same work, similar work, or work that is different but determined to be of the same value. The gender pay gap is the difference between women’s and men’s average hourly earnings. This distinction is important, as equal pay law relates only to cases of unequal pay, while most of the causes of the gender pay gap lie outside of employment law, which prevents real progress on women’s inequality at work.
What we know about employers and equal pay
We know that employers are unlikely to take steps to close the pay gap if they are not compelled to do so, and this compulsion simply isn’t there in any meaningful sense. Gender pay gap reporting was meant compel employers to take action to address any pay gaps, including looking at the challenge of pay discrimination. However, research by Close the Gap and the Government Equalities Office shows that employers are unlikely to voluntarily take action on the causes of the pay gap. There is little evidence reporting alone is having any impact on employer pay practice or the gender pay gap.
Close the Gap’s assessments of gender pay gap reporting among Scottish employers found only one employer which mentioned doing an equal pay review. Despite an equal pay review being the only way for an employer to be certain that they do not have an equal pay issue, evidence shows the majority of Scottish employers have not done one. Perversely, gender pay gap reporting has had the effect of making pay discrimination increasingly invisible, and not only in employer reporting: the guidance issued by UK Government, EHRC and ACAS barely pay discrimination itself.
The erasure of equal pay in pay gap reporting has resulted in incomplete analysis of pay gaps by employers (where this analysis has been done). In 2018 and 2019 reporting many employers overstated the difference between equal pay and the gender pay gap, which appears to have led to many employers ruling out unequal pay entirely as a cause of their pay gaps. Most pay discrimination is built into the design of employer pay and grading systems, for example through people being appointed to different points on the pay scale, different job and grade titles for virtually the same jobs, and sex bias in analytical job evaluation schemes grading women’s jobs lower. This is often unintentional, but still leads to unequal pay, and if employers fail to identify the issues in their pay systems this will simply continue unaddressed.
The limitations of equal pay law
While equal pay law provides a means to recourse for unequal pay, it is an individualised response to a structural problem. It requires individual women to realise or suspect that they are receiving unequal pay and pursue this with their employer. The first step in this process is to make an informal complaint to their line manager or HR. If this is unsuccessful, they must then take a grievance on the basis of unequal pay. Once this process is exhausted, they may submit a tribunal claim for equal pay. This process requires individual women to have the resources and resilience to pursue a claim, which may be limited by a fear of ‘having their card marked’, a lack of support or representation and/or a sense of ‘what’s the point?’.
Equal pay law itself has significant limitations, in that women must be able to identify a comparator of the opposite sex in order to make an equal pay claim. Where no comparator exists, it is not possible to refer to a hypothetical comparator. While changes to the Equality Act 2010 offer an alternative route where there is no actual comparator (an employee can instead bring a direct sex discrimination claim in relation to contractual pay) this still requires an individual to go through the stress of taking a case against their employer. The individualised nature of equal pay law means it is women, not employers, who are asked to step up, while it is employers, not women, who are drivers of unequal pay.
The undervaluation of women's work
The issue of value was central to the fight for equal pay and remains a stubborn problem fifty years on. The sewing machinists of Ford Dagenham, and the countless others who have fought alongside them for women’s labour market equality both before and since, demanded that the value of their work and skills be reflected in the pay they received. Equal pay law has simply not been equal to this task. The strikes for equal pay by women at Glasgow City Council happened because women’s jobs were still undervalued and underpaid relative to men’s, despite the introduction in 2006 of a job evaluation scheme which was supposed to address historic gender pay inequality. There are still tens of thousands of equal pay claims in Scotland’s tribunal system. Pay modernisation programmes in the public sector, including Single Status in local government and Agenda for Change in the NHS, have failed to address the undervaluation of women’s work, with many women’s jobs remaining low-paid and low-status.
The issue of value has been made more visible by the coronavirus crisis. As the country clapped for key workers, the majority of whom are women, media coverage has included comment on the high risk and low pay associated with this work. Research by the Women’s Budget Group found that women account for 98% of the workers in high exposure jobs earning ‘poverty wages’. The undervaluation of women’s work means that women are the vast majority of low-paid workers, not just in key worker roles, but across the labour market. This means that women are the majority of those living in poverty, which is a direct cause of child poverty.
There is widely held support for a pay rise for these workers, who have often previously been categorised as unskilled, and are now categorised as ‘essential’. The work of cleaners, social care workers, retail workers, childcare workers, delivery workers, public transport workers, nurses and healthcare assistants has kept the country going, and kept people safe, in this unprecedented crisis. But alongside this, the hours and hours of unpaid work – increased childcare, home-schooling, domestic labour, and caring for vulnerable people – this is the foundation of our economy and society. It is no accident that the vast majority of this work – both paid and unpaid – is done by women. And it is no accident that – because it is done by women – it is undervalued. This is a crucial issue which must be recognised in any moves to look at the pay of key worker roles.
What will it take?
So, what will it take to realise equal pay for women? Employers should do equal pay reviews to check they’re paying staff fairly and address any issues that arise. We also need to see proactive steps from employers to identify and tackle pay discrimination embedded in their systems. In addition to this, Scottish Government needs to include addressing the undervaluation of women’s work in its COVID-19 economic recovery plan.
That Scotland’s gender pay gap remains at 13% shows there is still much to be done to create real change. The coronavirus crisis has exposed the inequalities that women’s organisations have been working on for decades, bringing these issues into the public eye to an unprecedented extent. Close the Gap is pushing for change and, crucially, asking that the plan for economic recovery addresses the causes of women’s labour market inequality, and their wider inequality, and doesn’t leave women behind. It is time for women to see real equal pay for equal work.
If you think you're being paid unfairly because you're a woman, there's information on our website about what you can do next.
If you're an employer who wants to check whether you're paying staff fairly, Close the Gap has developed online tools to help you. SMEs can use our Think Business, Think Equality self-assessment tool which has a resource on pay and reward. Large employers can use our Close Your Pay Gap tool which also includes a self-assessment test and lots of free resources.
Disproportionate disruption: New Close the Gap report shows women will be harder hit by COVID-19 job disruption
Much analysis has been published detailing the anticipated labour market impacts of COVID-19 including the predicted “jobs recession”. However, to date there has been a lack of focus afforded to the specific impacts on women’s employment. Our latest briefing highlights that women will experience disproportionate labour market disruption as a result of the pandemic.
Overall, COVID-19 is likely to impact women’s labour market participation in a number of significant ways:
- Job disruption will disproportionately impact women because men and women tend to do different types of work.
- Women in low-paid jobs will be particularly affected by job disruption, placing them at greater risk of poverty.
- Women are disproportionately affected by the need for more unpaid care, impacting their ability to do paid work.
- Women are less likely to do a job that can be done from home during periods of social distancing, creating increased risk to their job retention and financial security.
- Women, particularly BME women, young women and women on zero-hour contracts, are more likely to work in a sector that has been shut down.
- Women are more likely to lose their jobs in the predicted “jobs recession”.
- The rise in underemployment will disproportionately affect women.
Our analysis finds that women account for the majority (51.5%) of workers in jobs that are deemed to be at high exposure to job disruption, with low-paid women at particular risk. Women’s over-representation in low-paid, lower-skilled service-sector roles puts them at greater risk of unemployment, enforced reduction of hours and being furloughed. A likely impact of job disruption will be an increase in the female poverty rate.
Women are more likely than men to work in a sector that has been shut down (18%, compared to 14% for men). Shut down sectors also have an over-representation of Black and minority ethnic women, migrant women, young women, and women on zero-hour contracts. It’s therefore very likely that COVID-19 will further entrench women’s labour market inequality, particularly for groups of women who already face multiple barriers to employment such as BME women and younger women.
Women are less likely to do a job that can be done from home during periods of social distancing, and the cutting of staff hours to manage COVID-19 has been most commonly found in female-dominated sectors. For example, 61% of enterprises in accommodation and food services and 39% of administrative and support service enterprises have reduced staff hours. This threatens the financial security of women working in these sectors, making them more vulenrable to underemployment.
Women are already four percentage points more likely to have lost their jobs than men, and the sectors where women are concentrated puts them at particular risk of redundancies during the predicted jobs recession. Across the UK, two low-paid, female-dominated occupations have experienced the most significant job losses to date, with 33% of cleaners and maintenance workers losing their jobs, closely followed by personal care services.
Scottish Government analysis shows that it took eight years for unemployment in Scotland to return to pre-crisis levels after the global financial crisis. It is therefore highly likely that increased unemployment will not be a fleeting phenomenon, particularly as women are concentrated in service sectors which will find it harder to bounce back as the crisis eases.
School and nursery closures, and increased caring responsibilities in the home have drastically affected women’s ability to do paid work. Existing gendered patterns of care are being replicated during lockdown, and in many cases magnified. Since lockdown, women across the UK are typically providing at least 50% more childcare, as well as spending around 10% to 30% more time than fathers home schooling their children. In some households, women are expected to assume full responsibility for home schooling and childcare while working from home, while their partners are able to concentrate on paid work elsewherein the home, undisturbed.The increase in unpaid care is likely to have long-term implications for women’s labour market participation, particularly when coupled with the delay to the implementation of the extended funded childcare entitlement.
Any additional barriers in accessing affordable, appropriate and flexible childcare may prevent women from returning to work at the end of this crisis. Changes to the Job Retention Scheme must, therefore, be accompanied by measures to support measures to support women with caring responsibilities to return to paid work.
Our briefing highlights the importance of gender analysis and gender-sensitive sex-disaggregated data in labour market policymaking. Applying a gendered lens to existing predictions and analysis highlights that women are likely to be disproportionately impacted by labour market disruption in a number of ways. It’s therefore critical that gender-sensitive data analysis and gender mainstreaming approaches are integrated into all labour market and economic recovery policymaking.
To this end, we make a number of recommendations for Scottish Government including ensuring that that gender-sensitive sex-disaggregated data informs future labour market analysis; ensuring policymaking to address COVID-19 labour market disruption addresses occupational segregation as a central aim; and integrating gender-sensitive data analysis and gender mainstreaming approaches into labour market and economic recovery policymaking, and programme and service design.
The lack of consideration afforded to gender in the aftermath of the 2008 financial crisis resulted in the recession having a disproportionate impact on women’s employment. To prevent history repeating itself, it’s vital that Scottish Government enact a gendered response to the anticipated jobs recession, with interventions specifically designed to tackle women’s labour market inequality.
Women, work and COVID-19: the stark implications for women’s poverty
Prior to the outbreak of COVID-19, poverty in Scotland was gendered. Women were more likely to be in poverty; more likely to experience in-work poverty; and were more likely to experience persistent poverty than men.
Women’s experience of poverty is directly linked to their experience of the labour market. That one of the key consequences of COVID-19 is labour market disruption and an expected ‘jobs recession’ is therefore particularly problematic for women’s poverty as women’s pre-existing inequality in the labour market puts them at particular risk of unemployment, reduced working hours and furlough.
Women account for the majority of workers in sectors categorised by the Scottish Government as being at ‘high exposure’ to labour market disruption. The high-risk sectors where women are concentrated are low-paid service sectors, putting low-paid women at particular risk. Women are four percentage points more likely to have lost their jobs than men and, women in low-paid cleaning and personal care services roles are more likely to have been made redundant. Job losses are only expected to rise, particularly if social distancing measures are further extended. Employers are also being asked to contribute more to the cost of furlough from August, which may bring a further wave of redundancies from businesses that are struggling to stay afloat.
Women who were already struggling are now under enormous financial pressure, being pushed into further and deeper poverty. Ultimately, without specific interventions to promote women’s equality and a gendered response to the crisis, COVID-19 will cement and potentially worsen the gendered nature of poverty in Scotland.
In line with the multiple labour market barriers experienced by different groups of women, coronavirus leaves particular groups of women at even greater risk of poverty. For example, women in the gig economy, 75% of whom earn less than the taxable threshold, do not have access to either of the Government financial schemes. BME women and migrant women are concentrated in low-paid service sectors which are susceptible to job disruption and redundancy. Migrant women with no recourse to public funds who have been made redundant, or had their hours cut, face destitution because they are not eligible for most benefits.
In the immediate sense, women’s earnings have been impacted by their increased likelihood of working in a sector that has been shut down. Young women and women on zero-hour contracts are over-represented in these sectors. One-third of lone parents work in shutdown sectors which is particularly concerning for child poverty rates as lone parents, 91% of whom are women, are already more likely to be living in poverty.
Many of the shutdown sectors where women are concentrated, such as retail and hospitality, are notoriously low paid and characterised by job insecurity. For example, four in ten of those working in retail and wholesale are paid less than the real Living Wage and 80% of people working in hospitality reported that they were already struggling with their finances before going into lockdown. Typical pay for workers in shutdown sectors is less than half that of workers in jobs that are able to be done from home. As these service sectors are less likely to ‘bounce back’ following the end of the crisis, as a result of changing consumer preferences and spending power, the impacts for women working in these sectors is unlikely to be fleeting.
Women in these low-paid, high-risk sectors are already more likely to be experiencing in-work poverty and are therefore less likely to have savings to fall back on. Women account for two-thirds of workers earning less than the living wage, and receiving only 80% of their usual salary through the Job Retention Scheme could push these women into poverty. For women who have had their hours reduced, the loss of earnings will have a profound impact on their financial security.
The extension of the Job Retention Scheme until October and the introduction of part-time furlough from August will provide some protection of earnings. Part-time furlough has been a key policy ask of Close the Gap and Engender, as this is particularly important for women who are balancing work and increased caring responsibilities. Further detail surrounding these announcements is not expected until May and, as ever, that detail is crucial. In particular, more information is required around part-time furlough and how women will be supported to return to work, when they may be unable to access childcare.
The delay in the delivery of the increased funded entitlement for childcare also raises concerns around women’s poverty in the longer term, particularly as there is no clarity around the length of the delay. The lack of flexible and affordable childcare is a key barrier for women entering the labour market or increasing their hours. 25% of parents living in absolute poverty in Scotland have given up work and a third have turned down a job because of the high cost of childcare. Delays in the provision of the funded entitlement could trap women in low-paid part-time work, or prevent women from re-entering the labour market, adding to a growing child poverty crisis.
The extension of school closures is likely to push many women to breaking point in balancing childcare responsibilities and paid work. Women in casualised and precarious work face difficulties reconciling variable hours with caring responsibilities, and low-paid women are less likely to be able to work from home in order to care for children during the crisis. These issues, coupled by low awareness among employers of the furlough provision for employees with caring responsibilities, may lead to women having to take unpaid leave in order to care, further jeopardising their earnings.
The transformation of Scotland’s economic landscape as a result of COVID-19 will have far-reaching implications for women in the labour market. One of the key consequences will be a rising tide of poverty for women, and the key concern is how to respond to this trend. Transformational and ambitious policy responses are essential.
Many women may find that their furloughed salary means that their earnings are below the Universal Credit threshold and others will be forced into accessing social security as a result of being made redundant. The current crisis has highlighted the failings of Universal Credit in particularly stark terms. Women require a lifeline, but the design of social security does not meet their needs, and traps women in poverty.
COVID-19 has made it even more pivotal that the Scottish Government prioritise action to tackle women’s in-work poverty when trying to meet their child poverty targets. Despite the established link between women’s poverty and child poverty, analysis and action on child poverty largely ignores the fact it is increasingly impossible to tackle child poverty without tackling women’s inequality in the labour market.
Austerity in the aftermath of the 2008 financial crisis had massive implications for women’s equality, disproportionately hitting women’s incomes and destroying the social security safety net. Further and deeper austerity is an entirely inappropriate response to this crisis, having potentially devastating consequences for women’s poverty and child poverty.
The UK and Scottish Governments must not enact a recovery that facilitates a return to the status quo, cementing women’s poverty in the process. Economic recovery needs to focus on rebuilding and transforming the economy to further gender equality and tackle pre-existing inequalities. The idea of building back better must mean building a labour market and social security system that works for women.
Are you a BME woman? Participate in an event to shape solutions to BME women’s inequality at work.
Last year, Close the Gap published research on Black and minority ethnic (BME) women’s experiences of employment in Scotland. We are now developing a set of recommendations for employers to address the problems raised in the research and we are looking for BME women to get involved.
Our research, Still Not Visible, found that:
- Almost three-quarters of respondents reported they had experienced racism, discrimination, racial prejudice and/or bias in the workplace.
- 47% of respondents believed they had experienced racism, discrimination, racial prejudice, and/or bias when applying for a job.
- 42% of respondents indicated they had experienced bullying, harassment or victimisation because they are a BME woman.
To ensure our solutions are shaped by the lived experience of BME women
in Scotland, Close the Gap are hosting an online engagement event.
The event will be held online via Zoom on the 24th of June from 10:30
to 12:15
Agenda
10:30: Welcome and outline for event, Gillian Neish
10:40: Still Not Visible Research findings, Ruth Boyle, Policy and Parliamentary Officer, Close the Gap
10:50: Introduction to recommendation themes, Gillian Neish
10:55: Group discussions and design of additional recommendations
11:45 Group feedback to plenary session, Led by Gillian Neish
12:05 Next steps
12:15
Close
Click
here to book for the free session.
Ahead of the event, we will be providing participants with guidance on how to connect to the event and resources for engagement, including a summary of the research and some draft recommendations.
If you are unable to participate in the event, but would still like to share your experiences, we would be delighted to hear from you. Please email rboyle@closethegap.org.uk for an engagement pack.
Lockdown on the gender pay gap
One casualty of the UK Government’s response to the coronavirus crisis is employer gender pay gap reporting. While this may not seem like a priority in the current circumstances, women’s pre-existing inequality means women are more at risk as they are the majority of frontline workers spearheading the response to the virus and are doubly impacted by increased caring responsibilities as childcare and social care provision dries up. For those women in precarious employment these additional responsibilities are even harder to accommodate due to variable hours and a lack of sick pay, increasing their insecurity in these already challenging times.
Women’s concentration in key worker roles, often hugely undervalued and underpaid, and disproportionate responsibility for unpaid care are two of the central causes of the gender pay gap. The current health crisis demonstrates clearly that we need a serious and concerted response to women’s inequality, perhaps more than ever.
While we acknowledge the heightened pressure on employers in the current crisis, the UK Government’s suspension of pay gap reporting seems like an unnecessary step, as pay gap reporting itself is unlikely to have a significant impact on employers’ ability to operate. Deprioritising women’s equality at this time ignores the gendered impact of the crisis and suggests that the UK Government does not consider gender equality to be a core part of its responsibilities. However, as the UK’s leading experts on the gender pay gap and women’s wider labour market inequality, our focus on employer action on the pay gap remains.
In 2019, we undertook a second assessment of Scottish employers’ gender pay gap reporting in order to assess compliance with and responses to the regulations, and to identify any measurable progress or change. This involved looking at a sample of 50% of Scottish employers which are required to report, examining how they have complied with both the legal requirements of the regulations themselves, and with the UK Government’s express expectation that employers use their reporting to drive action on the gender pay gap. The results show that significant problems remain.
Our analysis identified high pay gaps of up to 68% in male-dominated sectors such as sport & recreation, manufacturing, oil & gas, finance and construction and extremely high bonus gaps of up to 100% in male-dominated sectors such as construction, oil & gas and transport & logistics. Women’s under-representation in these higher-paid sectors is a key cause of the gender pay gap and it is important that more women are able to access this better-quality employment. However, these figures show that progress in this area alone does not secure women’s equality at work, as they continue to be over-represented in the lowest grades and lower-paid roles in these sectors. Those male-oriented workplace cultures and stereotypes about women’s skills and capabilities must also be addressed if we are to shift the needle on the gender pay gap.
The theory behind pay gap reporting was that, after uncovering a gender pay gap, employers would be compelled to take action to address the causes. However, our assessment found that employers are still not using their reporting to analyse, understand, and tackle the causes of their gender pay gap. Less than two in five employers had published a supporting narrative to explain the causes of their pay gap and less than a third of employers had set out a commitment to actions. Even those employers who had taken these welcome additional steps do not inspire confidence, with much of the analysis insufficient and unclear, and most actions unmeasurable. We know this is unlikely to result in effective and accountable measures to realise gender equality at work.
Our assessment also looked for examples of action taken since employers first published their gender pay gaps. This was all but absent with only 4% of employers providing evidence of steps taken. In setting out the gender pay gap reporting regulations, the UK Government clearly stated that their purpose was to encourage employers to tackle their pay gaps. Our assessment shows that this ambition continues to be unrealised.
So, what is behind this absence of progress? We can see that employers continue to lack a clear understanding of the gender pay gap and equal pay, and how these both differ and intersect. Employers continue to overstate and misconstrue the difference between the pay gap and equal pay and often ignore unequal pay as a potential cause of their gender pay gap. Many employers state that the pay gap as a “societal issue” while overlooking that employers are part of, and thus shape, society.
Throughout the assessment we saw employers use these assertions to justify their failure to identify or act on the causes of their pay gap. This persistent theme showed us that many employers appear to accept the gender pay gap as a given, a natural and immutable fact of life, and this has led to complacency and paralysis.
We know the pay gap is not inevitable, nor unchangeable. We know that employer practices on pay, flexible working, recruitment, promotion and job design, and the composition of their workforce, have a direct impact on the causes of women’s labour market inequality. This is a fact. And it is a fact that concerted action in these areas can improve outcomes for women, not just in the labour market but by advancing broader gender inequality.
We have long known that employers are extremely unlikely to act on women’s inequality at work unless they are compelled to do so. The current gender pay gap regulations are insufficient to this task: employers need more impetus to action, not less. It is crucially important that gender equality doesn’t drop off the radar at times of economic crisis, because in these times it’s women that are disproportionately affected. If we are not to see further setbacks to gender equality employers must be proactive in ensuring women’s equality and rights at work.
The COVID-19 crisis is likely to have a significant impact on the labour market and employers will have to adapt their practices if they are to emerge in a strong position. We hope that, given the increased visibility of their roles, this will include calls from the public and politicians to re-evaluate the rates of pay for those long-undervalued workers who have borne the brunt of the crisis, those key workers whose roles are only now being recognised as crucial to the functioning of our economy. We must not squander this opportunity to tackle the gender pay gap if we are to realise economic justice for women.
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