An alarming number of employers have not been conducting their gender pay gap reporting in...read more
Helen Kowalewska from the University of Bath unpicks the gender pay gap figures to show they are more complicated than the baseline figures.
Women in the UK earn, on average, 14.9 pence less per pound than men, based on the latest data from the Office for National Statistics (ONS). This means that while men are getting paid from January 1, women have effectively worked for free for the first 53 days of the year. That makes yesterday, February 23, “women’s pay day”.
The ONS gender pay gap is calculated by dividing the median pay for women by the median for men. The resulting ratio tells us that women earn, on average, 85.1 pence to the male pound – or 14.9% less.
This covers employees doing all jobs. It’s not the same as men and women getting paid differently for doing the same job, which is illegal.
But calculating the gender pay gap in different ways can highlight the different causes of the gap and which groups of women are more or less affected.
The median is the middle amount when all wages are listed from smallest to highest. This is different from the mean, which you find by adding everyone’s wages together and dividing by the number of people.
The median is less distorted by top earners, who are mostly men. If a survey of 1,000 people included Elon Musk while everyone else earned minimum wage, this would probably give an “average” wage of hundreds of pounds an hour based on the mean. The median would be the minimum wage.
The ONS figure of 14.9% is based on hourly pay, so compares pay for a fixed one-hour amount of work. Comparing weekly or annual pay would give bigger gaps because they’re directly affected by the amount of work that people do. Women – on average – work fewer hours than men (29 v 35 weekly hours).
The ONS figure also excludes overtime and bonuses. But there is evidence of larger gender pay gaps for bonuses than for regular pay.
Included in the ONS figure are part-time employees. Removing them narrows the gender pay gap to 8.3%. But this still puts women’s pay day for full-time employees on January 30, meaning full-time employed women effectively work nearly one month of the year for free.
The ONS figure also excludes self-employed people. The Association of Independent Professionals and the Self-Employed found a whopping self-employed gender pay gap of 43%. Self-employed women tend to charge less for their services than self-employed men. For this group, women’s pay day won’t come until June 6.
Another pitfall of the overall gender pay gap is that it hides how the gap varies for lower versus higher earners.
A review found that among the bottom 10% of UK earners, women were paid 90 pence on the male £1 in 2019, partly because of the wage floor created by the national minimum wage. For these women, pay day was February 6.
But among the top 10% of earners, women were paid 77 pence for every £1 paid to men, meaning their women’s pay day comes later, on March 25. American labour economist Claudia Goldin has described certain high-paid jobs, such as in banking, corporate management, law and consultancy, as “greedy jobs” because the demands are incompatible with unpaid care and domestic work, most of which is done by women.
The overall gender pay gap masks differences by company and occupation, too. While in a few occupations, such as childminders and medical secretaries, women earn more than men on average, men typically make up a very small share in these jobs. These jobs also pay less on average.
There are differences by parenthood and age as well. When women become mothers, their earnings stop rising so quickly or even fall. But when men become fathers, their earnings accelerate. Women often have to cut back on employment after having children, sometimes because of unaffordable childcare, which stops them from advancing their careers and earnings.
Plus, evidence has shown that employers judge mothers as less competent and committed workers but fathers as “ideal workers”. By the time their first child is 12, UK women’s hourly wages are one-third below men’s. For mothers, women’s pay day won’t come until May 2 2023.
The overall gender pay gap also ignores how gender intersects with other characteristics, like disability status, ethnicity and being a single parent. For example, white British women earn 18.7% less than white British men, while Bangladeshi women earn 23.1% less and Pakistani women 26.7% less than white British men.
Gender inequality is a complex concept, and the pay gap is only one measure. While the UK is an average performer internationally on its pay gap, it has a bigger gender gap in employment participation than many other advanced countries.
Focusing on pay also ignores non-wage benefits, like leave entitlements and enjoyment of one’s work. A 2021 study on labour and wellbeing found that including non-wage benefits in the definition of “pay” would widen the UK gender pay gap.
Despite its limitations, the gender pay gap is a straightforward summary measure for keeping track of gender equality. Still, calculating pay gaps for different groups and looking at other measures of gender inequality in the workplace, like employment rates and women’s access to workplace power, can help provide a fuller picture of what’s going on.