The gender pay gap: behind the headlines

Image: media co-op

The gender pay gap is in the headlines today, due to the CMI managers’ survey and new research from the IFS; however, just as it is important to look beyond the headlines, it is important to look behind the pay gap itself. While the pay gap is a useful indicator of women’s labour market inequality, it is an imperfect measure. The gender pay gap is hugely complex, and there is no single figure which can adequately capture those complexities.

Media stories on the pay gap often lead with the line, ‘Why after 45 years of equal pay law do we still have a pay gap?’ Part of the answer is contained in the question itself: equal pay law covers the concept of equal pay for equal work, rendering it unlawful to pay a woman less than a man (and indeed vice versa) for the same job or jobs of equal value. Equal pay for equal work is only one small piece of the pay gap picture, and tackling this alone hasn’t been and will never be enough to tackle women’s entrenched labour market inequality.

The three main causes of the pay gap, and those factors which aren’t captured by a headline pay gap figure, are occupational segregation, which sees women and men concentrated into different types of work, and different levels of work; a lack of flexible working, particularly at senior levels; and, discrimination in pay and grading systems. A key theme linking all three of these causes is the undervaluing of women’s skills and work. Women’s employment is still concentrated in undervalued jobs such as care, retail and cleaning, which are low paid because they’re seen as ‘women’s work’. The economic and social value of unpaid domestic labour and child rearing is invisible in the economy, and the skills associated with it systemically undervalued. Until we recognise and count the value of this unpaid labour, on which the entire economy is built, women will continue to be disadvantaged.

The problem with media reporting of research is that it focuses on headline grabbing figures, with little or no thought given to the accuracy of those figures, or the bigger picture. Headlines about the CMI managers’ survey declare that Scotland’s pay gap is higher than the rest of the UK. This is inaccurate. The more robust statistics published by ONS show the pay gap to have been consistently lower in Scotland than in the UK since 2010.

Today’s pieces also fail to highlight that the pay gap figure of 29% relates to a survey of management level jobs only. This annual survey is useful for highlighting the persistent and entrenched inequalities that women face at work; however it does not reflect the labour market as a whole. The focus on management jobs distracts from the experiences of the large numbers of women in undervalued, low-paid jobs such as care, cleaning and retail, for whom employment is becoming increasingly precarious.

Headlines about the IFS research draw heavily on the ‘motherhood penalty’ of the widening pay gap experienced by women after they have had children, but they fail to acknowledge the fact that women who haven’t had children, and those who won’t have children, still face a significant pay gap. Stories such as these bring an unhelpful and unwarranted scrutiny to women’s ‘lifestyle choices’, and distract from the need to challenge the structural barriers which constrain women’s choices and lives, such as their disproportionate responsibility for unpaid work such as care and domestic labour, and a lack of quality part-time and flexible working which prevents many women from progressing into higher paid jobs.

The pay gap doesn’t just affect women, employers are missing out on women’s under-used skills and talents. The business case for taking action on the pay gap is clear: companies that make small changes to their employment practices are able to recruit from a wider pool of talent, enjoy a reduction in turnover and training costs, and experience higher productivity through improved employee motivation. Our recent research paper Gender Equality Pays showed that tackling gender inequality in employment could add £17bn to Scotland’s economy.

Today, in a piece in Commonspace, Emma Ritch, Director of Engender, said "The pay gap is a top-line indicator of women's persistent labour market inequality. It shouldn't be a twice-a-year story when robust new figures are produced by ONS/Close the Gap, or recruitment companies do their own small bits of analysis.

"Instead, women's distinct experience should be included in reporting on the economy, on employability, on education and skills, on labour rights, and on precarity and zero hours contracts.

"Media coverage needs to reflect the complexity that underlies the pay gap itself. We need a better public conversation on women and work."

We couldn’t agree more.

New guidance for public sector employers on gender and the public sector equality duty

The public sector equality duty forms s149 of the Equality Act 2010. It is a positive duty which requires public authorities to take a proactive and organised approach to tackling institutional discrimination, and aims to mainstream equality into public bodies in practical ways. It has a general duty which sets out requirements for all public authorities and those bodies exercising a public function, and specific duties which place additional requirements on listed public authorities.

The general duty has now been in place for five years, with the specific duties in place for four years. In that time listed public authorities in Scotland have been required to publish their first mainstreaming reports, employee information, equal pay statements, gender pay gap information, and equality outcomes, and report on progress made towards mainstreaming equalities, and their equality outcomes.

The Equality and Human Rights Commission considered listed authorities’ compliance with the duty in its Measuring Up? reports, and a number of other equalities organisations have also scrutinised the standard of reporting. Close the Gap completed assessments of the first round of reporting in April 2013, and the second round in April 2015, with a focus on gender and employment.

The first assessment identified significant room for improvement in public authorities’ responses to PSED across all aspects of the duty. Public authorities failed to recognise data collection, interpretation and use as a process. Some authorities were stronger in data collection but then provided insufficient or weak analysis. Others had ostensibly better outcomes but these were not based on the data collected. Inconsistencies were also evident around the calculation of the gender pay gap and authorities’ understanding of the causes and types of occupational segregation.

The findings of the 2015 assessment showed that of those public authorities assessed, compliance with PSED has largely regressed, with the majority of organisations having lower overall scores than in the 2013 assessment. Just under a third achieved an improved score. Similar themes were identified, indicating a need for public authorities to renew their focus on work to meet the duty.

We have used the findings of this work, alongside learning from work done with individual organisations to develop updated guidance on the duty as it relates to gender and employment. It is hoped in being responsive to the experiences of public authorities this guidance will assist with the development and implementation of work to meet the duty, and improved reporting in the future.

It is important to acknowledge that gender inequality exists, and is perpetuated by gender-blind policies that fail to account for the different needs of women and men. Women’s inequality is not only an issue for female employees and their families. Barriers to men’s and women’s participation in stereotypically gendered occupations, and to women achieving the most senior posts, mean that employers cannot be assured that they are recruiting the most skilled and talented people to specific areas of their organisation.

Employers who take steps to address gender inequalities benefit from a more productive, loyal and motivated workforce. Diverse workforces bring a range of skills and experience to an organisation. This diversity of thought makes an organisation more creative, more innovative, and more attuned to the needs of all service users. Action on equalities therefore has the potential to drive excellence in service delivery.

Although the new guidance focuses on gender and employment, it covers fundamental principles such as mainstreaming, impact assessment, and the process data gathering, analysis and use. Public authorities may therefore find this guidance useful when considering these principles in relation to service delivery, or other protected characteristics.

The new PSED guidance can be found here. If you would like to receive a hard copy of the guidance please get in touch with us at info@closethegap.org.uk. We are also offering free training for public authorities on this new guidance. Further information and registration details can be found here.

FREE training for public authorities on the public sector equality duty

This week Close the Gap is launching new guidance for public authorities on the public sector equality duty, as it relates to gender and employment. This guidance will cover fundamental principles such as mainstreaming, impact assessment, and the process of data gathering, analysis and use, alongside equal pay and occupational segregation.

In advance of this launch, we are inviting public authorities to register to attend one of our free training sessions based on this new guidance. Training sessions will be held in the following locations:

July's News Roundup

The end of the month sneaked up on us in July; like an end-of-semester pop quiz on feminist economics, it was suddenly upon us and we were entirely unprepared (only kidding, we're *always* prepared for that kind of pop quiz). So, even though it's August already, we have pulled together all of the most interesting news and views of the last month for your perusal. Just in time for that Monday afternoon biscuit break you were hankering for. We'd recommend a Nice biscuit (remember those?). Go on.