Exploring the gender pay gap
Every year around November, a news item pops up on most UK media platforms saying that from this day until the end of the year, women are working for nothing. This is presented as an illustration of the gender pay gap, the discrepancy between what men and women earn in the UK.
The gender pay gap has become another fact that is promoted widely, including by respectable publications. Earlier this year the Financial Times (April 23, 2019) reported that "there are still no sectors in the UK economy where women are paid the same as men" and that "the median pay gap this year [2018] was 11.9%". These are shocking facts. This suggests that women in UK workplaces are being actively discriminated against by employers. It might therefore be considered perfectly reasonable for women to assume that such discrimination does apply to them and that their contribution will not be fairly valued. It might also be reasonable to demand that companies and government develop further policies to correct this inequality.
The impact of this information is significant: it is demoralising, divisive and harmful. In our coaching work we regularly encounter women and men concerned about this situation and struggling to know how to address it, both for themselves and their teams. For a woman to assume, based on the presentation of these facts, that her male counterparts are paid more, is corrosive.
So how would that look if we knew that that information was misleading?
In the 2018 figures reported by the FT, 10,428 employers disclosed what they paid per hour to their men and women. Of these, 1,421 companies pay women more than men, while 8,113 pay men more than women. That is the gender pay gap. Yet when you probe a little (but not much) deeper a rather different picture emerges. What the headlines don't state, and it seems they actively obscure, is that these figures are based on a comparison of hourly rates of pay across all jobs across the UK. As the Office for National Statistics (the government office which measures and provides gender pay gap data) states, the gender pay gap "is not a measure of the difference in pay between men and women for doing the same job". Therefore these are not comparable numbers - it's like comparing apples with oranges. Regardless of age, qualifications, type of job, full- or part-time, seniority and experience, all hourly rates are thrown in together. EasyJet provides a classic illustration of this - their gender pay gap for 2018 is reported as a whopping 54%. However this is because their pilots who are 94% male earn considerably more than their cabin crew who are 70% female. Their (then female) CEO and leadership team have set a target for 20% of pilots to be female by 2020 - a target they are struggling with as there are very few female pilots qualifying, despite targeted initiatives to encourage them to do so.
When you compare like with like (comparable jobs and comparable sectors) a very different picture emerges:
For men and women between the ages of 18 and 39 the gender pay gap is virtually zero (it widens after the age of 40)
For men and women in part time work aged between 30 and 39 there is a negative pay gap (i.e. women earn more than men)
This presents an entirely different picture to the emphasis touted by virtually all mainstream UK media. These figures are encouraging, suggesting that the 1970s Equal Pay legislation is working its way through the age range. They reveal a significantly improved - and improving - picture and that younger women are benefiting from it.
Among older employees a greater number of men than women are in senior positions, partly through having better opportunities in earlier years, and therefore they earn more. Women tend to take more time out from their careers for family reasons and are more likely to work part-time, so they earn less. On average, men tend to work longer hours and are more likely to work in dangerous, high risk or unsocial roles which typically pay more. For a long time many women have been unfairly treated in the workplace and their careers and earnings have been significantly impacted (as many of us have experienced directly) but all of these factors notwithstanding, year-on-year the trend is for significant positive change.
The gender pay gap is yet another topic that seems to have become the cause de jour for those keen to virtue-signal their woke credentials. Weaponising this data to further such a political agenda actually harms women (and men) and creates yet more completely unnecessary tension and pessimism. In reality, there is more to do but also much to celebrate in this improving picture.