Move to gender pay gap reporting in the private sector is welcome but inadequate

David Cameron recently announced legislation that will require larger companies to publish their gender pay gap figure. Given that 45 years has passed since the equal pay act was introduced, this is to be welcomed. But the publishing of pay gaps alone will not realise David Cameron’s ambition to “end the gender pay gap within a generation”. What it is, though, is a small step towards addressing the disadvantage that women face at work every day.

Scotland’s gender pay gap, which is 12% for full-time workers and 32% for part-time workers, is underpinned by a range of factors, of which pay discrimination is but one. Women still do the bulk of unpaid caring, and inflexible working arrangements make it difficult for them to balance work with these family and caring responsibilities. After having children many women end up working below their skill level in the only part-time jobs that are available, which tend to be in undervalued, low-paid occupations like cleaning and retail. Cutting back their hours in this way has a long-term scarring effect on women’s incomes across their lifetimes, which affects not just pay, but also promotion prospects and ultimately their pension.

We still have quite rigid ideas about men’s and women’s capabilities and preferences, and these stereotypes contribute to women being clustered in lower grade jobs and in sectors with the poorest pay. Gender stereotyping begins at birth, with the rampant ‘pinkification’ of babywear and toys. All-pervasive, insidious messaging about girls’ and boys’ interests and abilities mean that by the time young people are choosing subjects at school, their own assumptions about gender and work are very fixed. This significantly contributes to the dearth of young women studying non-traditional subjects such as maths and physics. Of those who do, even fewer go on to work in well paid, non-traditional jobs such as engineering. Many of the women that do make it along the pipeline to the labour market later leave. Sometimes that’s because they find out they’re being paid less than their male colleagues - female graduates earn up to 28% less than their male counterparts, even if they studied the same degree subject. In other cases, they’ve been continually passed over for promotion, they’re not able to work flexibly once having children or they’ve felt the chill of a male-oriented workplace culture.

Most obviously, the gender pay gap is a problem for women because it is unjust. Individual women who experience discrimination based on their sex can seek redress from an employment tribunal. But that’s only if they can afford the fees of £1200, the introduction of which having precipitated a staggering 83% drop in equal pay claims and a 77% drop in sex discrimination claims.

There have been a number of high profile equal pay cases, most notably in local government where councils have scandalously spent millions of pounds of public money defending female employees’ equal pay claims. Birmingham City Council recently agreed to pay more than £1bn to settle the claims of thousands of women who have been waiting years for justice. In the private sector, both Asda and Sainsburys are now facing equal pay claims from female shopfloor workers.

But it’s not just women that are affected by the pay gap. Employers are missing out on the abundance of female talent as huge numbers of qualified and experienced women are working in jobs that are below their skill level. The business case for addressing the gender pay gap is well-rehearsed. Companies that promote gender equality are able to recruit from a wider pool of talent, enjoy a reduction in turnover and training costs, and experience increased productivity through improved employee motivation. Equalising women’s employment and productivity to the same levels as men’s could add £600bn to the UK economy.

The UK Government’s voluntary initiative Think, Act, Report, was widely seen as a failure when out of the 280 companies that signed up, only five published their pay gap. What this tells us is that voluntary initiatives don’t work. Companies may make positive noises about equality but that doesn’t necessarily translate into action to achieve it. Close the Gap’s research into employer action on equal pay showed that while 94% of those employers we surveyed had an equal pay policy, less than a third had undertaken an equal pay review, and only 3% had taken any action to address pay gaps.

And this is the crux of the issue. Publishing pay gaps is just small one step towards tackling women’s inequality at work. At the very least it will ensure that accountability in the private sector reflects accountability in the Scottish public sector, where public bodies already have to publish their pay gap. But employers need to look below the headline figure and identify why there are differences. The problem is wider than pay systems. Companies have look at the ways in which their workplace culture impacts on male and female employees differently, and then change their practices to ensure that that women are not disadvantaged. Until that’s done, it’s difficult to see how the pay gap will end in a generation.

Anna Ritchie Allan, Project Manager

This article originally appeared in the Sunday Times

Scotland is not 'lagging behind the rest of the UK' on the gender pay gap

Reports today that the gender pay gap in Scotland has increased, unlike in the rest of the UK, show why statistics matter.

Scotland is not 'lagging behind the rest of the UK', as has been reported. The gender pay gap is a complex issue, and there is no definitive way to report a single figure which fully captures those complexities. The Office for National Statistics reports both the mean average and the median average, but gives prominence to the median in its statistical bulletins. The median is the more robust method from a statistical perspective because it isn’t skewed by outliers i.e. very high values and very low values. But any analysis of the pay gap must also look at the mean figure because the extreme values underpin the nature of the pay gap. This is because women tend to be among the lowest paid and men tend to be among the highest paid in the labour market.

Both the mean and median pay gap figures have been consistently lower in Scotland than in the UK since 2010.

Scotland’s mean full-time gender pay gap has continually decreased from 2010 to 2014, except in 2012 when there was an increase of 3.2% which was most likely caused by cuts in the public sector where women’s employment is concentrated.

There is a similar picture when looking at the median full-time figure in that there was a gradual decline, then an increase of 2.6% in 2012. The difference is that the median increased again in 2014 from 7.6% to 9.0%. A closer look at the percentiles shows that the gap at the 90^th percentile (the highest earners) has narrowed while the gap at the 10^th percentile (the lowest earners) has increased. This means that the gender pay gap between the highest earners has narrowed, but that the gap between the lowest earners has increased. This is deeply concerning because the lowest paid women already experience severe disadvantage in the labour market. They are more likely to be on temporary or zero hours contracts, less likely to receive any training, and are less likely to have any progression opportunities.

A headline pay gap figure can never fully capture the very different experience of the labour market that women have. What it does provide though is an evidence base for policy and practice to address the economic injustice that women in Scotland and in the UK face every day at work.

Read more about calculating the gender pay gap in our annual statistics report.

Exploring the use of positive action

The Forum for Research into Equality and Diversity, based at the University of Chester, are currently undertaking research into the use of positive action in the UK. The research intends to explore the use of the positive action provisions within the Equality Act 2010 by public sector employers in Scotland, England and Wales.

Positive action was first permitted in the UK by the Sex Discrimination Act and the Race Relations Act, which came into force in the mid-1970s. The scope for action at this time was very limited; however the Equality Act 2010 extended provision.

The general positive action provisions in the Equality Act seek to address disadvantage and under-representation among protected groups in employment, and in society more generally. Positive action measures are permitted if they are a proportionate mechanism to enable people sharing a protected characteristic to overcome or minimise disadvantage; or to meet the different needs of the protected group; or to enable people in protected groups to participate in an activity.

Although legislation specifically provides for and encourages positive action there are very few examples of such initiatives in practice.

The Forum is seeking to gather as many responses as possible, and would encourage public bodies across Scotland to consider taking part. All responses to the survey are anonymous. You can find more information about the survey, and also register to take part, using the link below.

http://www.chester.ac.uk/fred/research/positive-action

Making Manufacturing Work for Women research launch event

Thursday 25 June 9.45 am – 11.50 am
Radisson Blu, 80 High Street, Royal Mile, Edinburgh, EH1 1TH

Close the Gap commissioned University of Strathclyde to undertake research into women and manufacturing. This event will present and discuss the findings of new research which maps women’s participation in the manufacturing cluster labour market in Scotland to identify patterns of occupational segregation, gendered skills pipelines, and gender difference in participation in related Modern Apprenticeship frameworks. The research also examines the impact of women’s participation on pay, and on the gender pay gap within the sector.

Speakers:

Annabelle Ewing, Minister for Youth and Women's Employment
Dr Pauline Anderson and Professor Patricia Findlay, University of Strathclyde
Anna Ritchie Allan, Close the Gap

The full agenda and details on how to book a place are here