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Five highlights from the Economy, Jobs and Fair Work Committee's inquiry into the pay gap
Yesterday, Close the Gap welcomed the report of the Scottish Parliament Economy, Jobs and Fair Work Committee inquiry into the gender pay gap. The report No Small Change: The economic potential of closing the pay gap makes 45 recommendations, a number of which are refreshingly bold, to Scottish Government, its agencies, and employers. That the Committee undertook the inquiry is progress itself as the pay gap has hitherto been seen as the purview of equality committees. Increasingly though, the economic case for women's equality is gaining global traction. In 2016, Close the Gap published research which found that equalising men's and women's employment could be worth £17bn to Scotland's economy. The committee led with this figure for the comms around their report.
Perhaps most crucially, the report recognises that to reduce the pay gap, action is required not only in labour market policy, but across a range of policy areas and makes recommendations around education, skills, childcare, procurement, business support and economic development policy and delivery. This is an important acknowledgment because history has shown us that tinkering around the edges of a systemic problem doesn’t create change. That’s why we’ve particularly welcomed the recommendation that Scottish Government develop a national strategy, the key ask from Close the Gap and Engender.
Although a range of committees, commissions and summits have looked at the gender pay gap, and women’s labour market inequality, recommendations have been short-term, fragmented and very often not implemented. The pay gap is a structural problem and yet there's never been a cohesive, strategic response which aims to address the systemic inequality that groups of women experience at work.
Here’s five highlights from the committee's report.
1. The undervaluation of the care sector
The report highlights the systemic undervaluation of the female-dominated care sector and its workers. The undervaluation of women’s work is an economy-wide problem, and a key cause of occupational segregation. The committee notes that the care sector is an “undervalued but growing and central part of Scotland’s economy”, and “recognises the impact that improving pay in child, adult and elderly care would have not only on reducing the gender pay gap but also on recruiting a more balanced workforce”. It recommends increasing wages in care beyond the living wage to more accurately reflect the value of the work undertaken. Furthermore, in order to raise the status of care, the committee recommends that as a first step, Scottish Government should make care a “priority” sector. This is significant because Scotland's current growth sectors are male-dominated, and consequently it's men, and men's jobs that have benefited from investment, and budget allocation.
2. Scottish Business Pledge, and the enterprise agencies
Close the Gap set out in its written and oral evidence its concerns about the Business Pledge, a voluntary initiative which aims to influence businesses to take up a range of progressive workplace practices, including improving gender equality. The critique of the “balanced workforce” indicator offered by Close the Gap, Engender and Equate Scotland (that it ignores occupational segregation, among other things) was accepted by the Committee, and it recommended that the gender element of the Pledge be redesigned in consultation with gender advocates. This is very welcome, particularly as the most recent statistics shows a further drop in the proportion of companies signing up to the gender pledge, now just 33%. The Pledge just isn’t working for women’s equality.
The committee makes a range of recommendations around economic development policy and delivery, and are critical of the inertia of the enterprise agencies around the pay gap. The committee reports that it is “not persuaded the enterprise agencies are as fully committed to promoting the SBP as they might be” and that it “expects to see inclusion of ambitious targets and gender pay measures within future business plans”. The lack of engagement of the enterprise agencies on equalities has long been of concern to Close the Gap, so we’re pleased to see a raft of recommendations in this area. For example:
- All Scottish Enterprise and Highlands and Islands Enterprise account managed companies to have or produce a gender pay gap report and action plan.
- Businesses who receive significant support, such as Regional Selective Assistance grants, should be asked to have or produce a pay gap report and action plan for their Scottish operations.
- A question on the pay gap should be added to Regional Selective Assistance application forms to align with Invest in Youth conditionality.
- Scottish Government to require enterprise agencies to report on the work they are doing with account managed companies to reduce the pay gap, through their annual reports, and feed into the National Performance Framework indicator.
3. Measuring the pay gap
Scottish Government uses the median full-time figure as the pay gap indicator in the National Performance Framework. Close the Gap has been critical of this because it excludes about 40% of working women, those who work part-time. The committee agreed with Close the Gap on this measure, reporting it was “not persuaded this accurately or conclusively represents the pay gap”. Instead it recommends a suite of indicators to measure the pay gap, and that any National Performance Indicator indicator include part-time workers, who are predominantly women working in undervalued, low-paid jobs.
4. Procurement
The committee highlighted the potential to use procurement to lever better employer practice around the pay gap. It recommended that Scottish Government consider amending procurement regulations to require bidders to calculate and submit pay gaps using the formula in the new pay gap reporting regulations.
It further recommended that Government consider the opportunities for new procurement legislation that will be presented post-Brexit.
Close the Gap is currently reviewing public authority work on procurement and gender equality, as part of our assessment work on the public sector equality duty. We're also going to be doing some work in the future to take a closer look at how procurement can advance women's equality. In the meantime, you can read a working paper by Dr Katharina Sarter, formerly of Women in Scotland's Economy research centre at GCU, on public procurement and the public sector equality duty.
5. Occupational segregation: A cradle to the labour market problem
Occupational segregation is a cross-cutting theme of Close the Gap's work, so we welcome the committee’s acknowledgement that “a gendered analysis of education is key to tackling the gender pay gap”. Girls and boys and young men and young women are funnelled into different subjects based on stereotypes and gendered assumptions on their capabilities and interests, which is a major cause of occupational segregation. Our Be What You Want works aims to address this by working with education policymakers, practitioners, and young people to encourage non-traditional subject choices. The committee was clear that changes are needed in the education system, and is going to write to the Scottish Parliament Education and Skills Committee with their findings and ask them to consider the issue further in their future work. We’ll be looking at the inquiry findings around education in more detail on the Be What You Want blog later this week.
That's just some key highlights of what’s in the committee’s report. There are many more covering areas such as women's enterprise, equal pay reviews, Modern Apprenticeships, flexible working, returners programmes, and the new pay gap reporting regulations.
Grab a cup of tea, and read the full report. You can also read Close the Gap’s written evidence.
Close the Gap welcomes Holyrood report which finds clear economic gains to closing the pay gap, worth up to £17bn* to Scotland's economy
Close the Gap welcomes the Scottish Parliament’s Economy, Jobs and Fair Work Committee report which reinforces the economic imperative of tackling the gender pay gap, and calls for a national strategy.
Anna Ritchie Allan, Executive Director, said:
“The pay gap is an indicator of women’s persistent labour market inequality, and history has shown us that tinkering around the edges of a systemic problem doesn’t create change. This is why we enthusiastically welcome the call for a national strategy, the key ask from Close the Gap.
“The pay gap is a structural problem which requires a cohesive, strategic response to address its many inter-related causes. It’s time to translate the rhetoric around the pay gap into substantive action, and create meaningful change for women.
“We also welcome the Committee’s findings on the undervaluation of women’s skills, a critical economy-wide problem, and the recommendation that care be a priority sector. Care work is grossly undervalued and low-paid because it’s seen as ‘women’s work’. Scotland needs economic development policy that recognises care as essential infrastructure that enables the economy to function.
“The Committee recognises that the solutions to the pay gap are varied and complex, and requires action from a broad range of stakeholders. Now is the time for Scottish Government to show leadership, and demonstrate its commitment to realising equality for women at work.”
*In 2016, Close the Gap published a research report on the economic case for women's labour market equality, which found that equalising men's and women's employment could add up to £17bn to Scotland's economy. Read the Gender Equality Pays report here.
Close the Gap launches new Think Business Think Equality test on Pregnancy and Maternity
The Think Business Think Equality tool has been expanded to include a new test on pregnancy and maternity. The free online tool for employers already includes five tests on flexible working, workplace culture, pay and reward, progression and promotion, and the different jobs that men and women tend to do (occupational segregation). The tool enables employers to self-assess their employment practice, and provides tailored advice and guidance on the ways in which their business can benefit from gender diversity.
The new test on pregnancy and maternity, which takes no longer than five minutes to complete, has been developed to support employers to improve pregnancy and maternity policies and practice.
Recent research from the Equality and Human Rights Commission investigated pregnancy and maternity discrimination in the UK. Employers who took part reported that it was in their interests to support pregnant women and those on maternity leave, and they agreed that statutory rights relating to pregnancy and maternity are reasonable and easy to implement. The research also found that:
- Around one in nine women (11%) reported that they were either dismissed; made compulsorily redundant, where others in their workplace were not;
- One in five women said they had experienced harassment or negative comments related to pregnancy or flexible working from their employer and /or colleagues; and,
- 10% of pregnant employees said their employer discouraged them from attending antenatal appointments.
The new Think Business Think Equality pregnancy and maternity test and guidance will support employers to better support their employees who become parents.
Delivering workplace equality makes good business sense. Having fair and flexible working practices allows you to attract and retain the best talent, reduce recruitment and training costs, and it makes your business more productive, more innovative, and more profitable.
Our Gender Equality Pays research on the economic case for women’s labour market equality identified evidence that gender equality at work is not just good for women, but is also a critical driver for improved business performance, and a worldwide catalyst for economic growth. The report highlighted the proven business benefits of providing flexible working, and the macroeconomic gains where women's under-used skills are more effectively utilised across the labour market. Crucially, the research showed that closing the gender gap in employment could be worth more than £17bn to the Scottish economy.
Find out how your business can benefit from gender equality. Take the Think Business, Think Equality test at www.thinkbusinessthinkequality.org.uk
You can also download a range of guidance, templates, good practice examples, and find links to other support organisations.
If you’re on the move, you can download the Think Business, Think Equality app for iOS, Android or Windows.
Are you a BME women? We want to hear about your experiences of work in Scotland.
Close the Gap is developing a research project on black and minority ethnic (BME) women’s experiences of work in Scotland. As part of this work, we’re looking for BME women to participate in focus groups which will discuss your experiences of the workplace.
We want to hear about any barriers you’ve experienced in entering or progressing in the workplace, and what you think needs to be done to realise equality for BME women at work.
The focus groups are free to attend, and refreshments will be provided.
We can provide travel costs and an interpreter if needed, and support for childcare costs is available. Please let us know your needs when you book. The venue is accessible.
Click here to book for the Glasgow session
Click here to book for the Edinburgh session
If you are unable to participate in the focus groups but would still like to share your experiences Close the Gap will also be conducting a survey after the focus groups have taken place. Please email info@closethegap.org.uk if you would like to participate in the survey.
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.
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