The gender pay gap hit the headlines yet again last week. Government ministers announced plans for national league tables to show the difference in wages earned by male and female employees in any company with over 250 workers. Coverage of this latest attempt to crack down on the apparently blatant gender discrimination that blights the nation’s labour market has been sympathetic. Articles have been accompanied by helpful infographics showing a blue figure atop a substantially larger pile of money than an equivalent pink figure. The intention is to illustrate the frequently referenced statistic that men earn roughly 20 per cent more than women.
Despite the simplicity of this stark inequality, such figures are misleading. The much-heralded 20 per cent pay gap is an ‘on average’ figure that is reached through combining part-time and full-time earnings, and takes no account of age or employment sector. As I have argued before on spiked, when we compare how much women and men are paid for doing the same job for the same number of hours each week, there is no pay gap. Not only is it illegal to pay men more, such a pay gap makes no economic sense. If bosses could really get away with paying women so much less, why would anyone ever employ a man?
In reality, the pay gap is far more complex than campaigners like to acknowledge. It is affected by age, occupation and hours worked. Today, women in their twenties earn more than men of the same age. Significantly, they earn more than men not just like-for-like, but also on average. This means that irrespective of job type or hours worked, young women are likely to take home higher wages. For women under the age of 40 and working full-time, the pay gap is negligible. As government equalities minister Nicky Morgan acknowledged when announcing the government’s latest proposals: ‘We’ve virtually eliminated the gap for full-time workers under 40 and the gap for the over-40s is shrinking too.’
For full-time workers of all ages, the gender pay gap now stands at 9.4 per cent. Given that men and women have traditionally made different career choices, that men and women over the age of 50 entered a labour market bearing very little resemblance to today’s, and that older women may have taken time out to raise children, it’s remarkable how small the remaining pay gap is. Furthermore, as high earners retire (men traditionally at an older age – and therefore earning more), this small pay gap is reducing year on year. The more campaigners cling to the 20 per cent figure, holding it up as a sign of women’s continued disadvantage in the workplace, and commentators report it without question, the less able we are to have an honest discussion about the fundamental changes that have occurred in the workplace over the past quarter of a century.
Throughout much of history, if women were able to work at all, they were relegated to the worst jobs with the lowest wages. The introduction of the Equal Pay Act in 1970 did little to improve the lot of female employees: seven years later, women’s average pay in the public sector had actually declined in relation to men’s. A lack of nursery provision made it difficult for women with young children to work. Those who did were confronted with a labour market that was rigidly segregated according to gender. This wasn’t just about sexist assumptions – legislation ensured there was a real distinction between ‘men’s jobs’ and ‘women’s work’.