Written by Raquel Barrera from DIVERSITAS INSTITUTE
20th November is Equal Pay Day in the UK. Each year, the Fawcett Society, a charity that campaigns for gender equality and women’s rights, marks #EqualPayDay as the day in the year when women, on average, stop earning relative to men because of the #GenderPayGap. In other words, the average woman in the UK effectively works for free for nearly two months of the year compared to the average man. The Fawcett Society uses the mean full-time hourly gender pay gap to designate Equal Pay Day which this year is 11.3%.
According to the latest figures from the ONS (Office for National Statistics) the UK’s gender pay gap, measured as the median hourly pay for both full-time and part-time employees, stands at 14.9%. This figure means that for every £100 an average man earns, a woman earns £85.1.
At this point some questions arise: how is that possible? Why does the gender pay gap still exist? What are the factors that explain this difference?
Before answering these questions, it is important to understand what the Gender Pay Gap actually means and to distinguish it from Pay Discrimination.
The Gender Pay Gap is the difference between the average salary of women and men within a particular group (a company, an organisation, a particular sector, a country…). It shows structural and systemic issues that women face in the workplace and that have an impact on their average wages.
Pay Discrimination (or Unequal Pay) is the unjustifiable and unlawful difference in the individual earnings of a woman and a man for the same work or work of equal value and can be one of the causes of the Gender Pay Gap.
On the other hand, and before identifying the main factors behind the Gender Pay Gap, it is imperative to point out that measuring the average hourly pay to calculate the gap does not take into account the number of women who have reduced their working hours.
Factors that explain the Gender Pay Gap:
There are 5 main factors, amongst others, whose combination, to a greater or lesser extent, is the cause of the gender pay gap:
- Unpaid work. Women have massively joined the labour market without completely giving up the unpaid care activities whilst men have not joined the caring activities at the same pace. Domestic and care unpaid work is still mainly carried out by women. A report from the Office for National Statistics (ONS) found out that, during lockdown, women were carrying out, on average, out to two-thirds more of childcare duties than men. On the other hand, according to a survey conducted by The Centre for Progressive Policy (CPP), women in the UK are providing more than twice as much unpaid childcare per year as men.
- Part-time work. As a direct result of the amount of time that women dedicate to unpaid work, they are more likely to «choose» to work part-time. In addition to that, part-time jobs are typically worse paid than the full-time ones and also offer less opportunities of progress in terms of promotion and professional development. According to the Women and the UK Economy paper by the House of Commons Library, with data from ONS, women are still more likely than men to be working part-time (38% of women compared with 13% of men).
- Motherhood Penalty. Many reports and studies depict that mothers are more likely to suffer a wage penalty, commonly known as «motherhood penalty» due to labour interruptions for child care, tendency to «choose» to work fewer hours in part-time works or stereotypical perceptions around not promoting or hiring mothers. According to the analysis by the Institute for Fiscal Studies published at The Gender Pay Gap report by the House of Commons Library, most of the gender pay gaps can be traced to ‘child penalties’.
- Occupational Segregation. Women tend to work in worse-paid occupations/sectors. According to the ONS, Annual Survey of Hours and Earnings, 28% of women work in low-paying occupations compared with 15% of men.
- Vertical Segregation. According to a Study by the Pipeline, in 2021, men still account for the 85% of all executives on company main boards in the UK. The «glass-ceiling», the «broken-rung» or the «sticky-floor» are some of the main obstacles that prevent women from being in top positions.
In summary, understanding the Gender Pay Gap in your organisation is not only about measuring the statistic figure but analyse what are the factors behind the gap and define specific actions in order to bridge the gap. Every organisation has its own particular and unique causes and finding them is key in order to invest the right amount of effort and resources where needed.
At diversitas institute we offer our expertise in measuring and identifying the causes behind the gender pay gap in your organisation and in designing Gender Equity Plans. Should you have more questions around the topic, do not hesitate to contact us.
