The gender pay gap: where to in 2019?

Raj Patel

The deadline for the second year of Gender Pay Gap reporting is fast approaching, so: what do we know about this complex challenge – and what can we do about it?

Where we are now

Women aged 16-64 are less likely to be in paid work than men, and their hourly pay, on average, is just 82% of men’s. There are different pay gaps between full-time and part-time work, with women less likely to be full-time – 66% of men are in full-time work, but only 44% of women.

The good news is that the gender pay gap has been gradually reducing, but this reduction now appears to be tailing off.

However, there is greater awareness of the issue now, since gender pay gap reporting was introduced for organisations with more than 250 employees – and that creates an opportunity for policy makers, employers, service providers and campaigners to focus on where they can take action.

Motherhood

One of the main factors in the pay gap, of course, is motherhood. It’s not the only factor – there is already a gap beforehand, but it widens after the first child arrives. Women’s careers stall, too: female employment dips sharply after childbirth, especially for those with lower educational qualifications.

For graduates, however, the effects are felt for longer. The difference between average hourly pay for men and women with GCSEs stops widening, roughly from mid-life, but continues to grow for female graduates.

So, what can be done?

Flexible working should be the norm

We need to see more ways for women to return to work at the level they were at before they had children, rather than downgrading. That means more flexible working.

Returners’ schemes for people on career breaks could ease the transition back into work – and we need a cultural change in workplaces so employers focus on productivity rather than ‘presenteeism’. Even small changes, such as starting work half an hour later, could help. In particular, unless there is a strong business case, jobs should be advertised as flexible or part-time, with more senior jobs opened up to part-time working.

But flexibility should not be confused with autonomy and control. Women in lower paid and lower skilled occupations are more likely to have greater flexibility but very little control – those working in on-demand services or on zero hours contracts, for example. They need more predictable hours if they are to work around childcare.

Balancing work and care

When families weigh the cost of childcare against the additional earnings the mother could bring in (marginal income compared to marginal costs), they may find they can’t financially justify returning to work. Increasing choices for women returning to work could help to generate more ‘employment pull’.

Getting fathers to spend more time caring for children is important as well. Currently, shared parental leave/pay can only be created by the mother reducing her maternity leave/pay. We need to boost fathers’ entitlement, and encourage them to use it. This would enable families to make better choices that work more fairly between partners.

There are other types of care, too. With an ageing society, a greater burden for caring is falling on women – although evidence suggests that it is much less gendered than work. The government will need to revisit Carers Allowance, so women who want to both work and care are not forced to choose between them. This could involve reviewing the Allowance, which is low.

Places and local transport matter

Our own attitudes are important, too. Understanding Society shows us that women with progressive views on the division of paid and unpaid work often revert to more traditional family arrangements after becoming parents. This is particularly true in some geographical areas. In places where women face greater constraints, they are more likely to switch to holding more traditional views after having children.

Analysis by the Institute for Fiscal Studies shows that there is also a ‘gender commuting gap’ between men and women. Women’s commuting times fall significantly after the birth of their first child while men’s do not – “bearing a striking resemblance to the evolution of the gender wage gap”.

So, women are more likely to depend on local transport, but a great deal of investment is going into mega-infrastructure projects such as HS2 and intercity travel. That means less investment available for local transport. The government’s industrial strategy could redress the balance and examine the gender implications of such schemes, and what further action can be taken on employment support, skills and childcare.

Gender and Universal Credit

Lower earnings mean that women are likely to be more dependent on social security than men. They are also often a ‘conduit’ of benefits for others (such as children). Universal Credit, a radical change to the benefits system, raises several concerns from a gender perspective.

Where people live as a couple, they get a single monthly payment for the whole household rather than independent payments (other than in exceptional circumstances). Although complex, in general the benefit is jointly assessed – but women’s choices could depend on her partner’s circumstances and decisions, raising concerns about women’s equality and financial independence.

Although designed partly to address the issues of family worklessness, this benefit could reinforce the male wage-earner model rather than being a ‘modern’ benefit which reflects real work situations. For a majority of working families, that means two payments coming into the household.

In particular, the Government’s equality impact assessment of the Welfare Reform Act (2012), did not examine the issue of ‘jointness’. Couples with children are required to nominate a ‘lead carer’, who is subject to a regime similar to that experienced by lone parents. The lead carer (and therefore second earner) is usually a woman – which reinforces traditional gender roles, rather than encouraging more flexible working and caring by both parents. This is difficult in any case for low income households if men are the higher earners, and it matters because more equal sharing of childcare responsibilities between men and women is central to reducing the gender pay gap.

Second earners tend to be women, and play a critical role in getting families out of poverty. The conditions of Universal Credit are being used to compel some women back to work, but there is no work allowance for second earners, and the amount of hours women are prepared to work (due to caring responsibilities, for example) may be deemed ‘inappropriate’, so those with the lowest incentives to work face the highest conditionality.

Questions remain

Considerable questions remain about the gender pay gap – some that Understanding Society data can help to answer – from how skills and types of firms make a difference, to ‘intersectionality’ (the interconnected nature of race, class, gender, etc.), and whether attitudes and behaviours among fathers are changing to affect outcomes for women.

You can find out more in our Insights Report 2018-19, and watch this space for more research on the subject.

Author

Raj Patel

Raj Patel is Impact Fellow at Understanding Society, focusing on how data can be used to address the challenges society faces.