Lockdown on the gender pay gap

The world looks very different than it did a year ago, even a month ago. The impact of COVID-19 is widespread and has implications for every part of society, with specific impacts on women’s labour market inequality and wider inequality.

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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