Closing the Gender Pay Gap

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In the United Kingdom today, the average woman earns 85.5p for every £1 paid to a man.

UK government legislation will draw focus to businesses with significant gender pay disparity from 2018 – but can such initiatives truly close the gap? 

Starting in April 2017, companies with more than 250 employees will have to disclose how much they are paying in salaries and bonuses to their male and female staff, as well as the number of men and women in each salary quartile; and from 2018, a league table of around 8,000 firms – from which the government intends to ‘name and shame’ offenders – will be published.

The required data will not include overtime pay, expenses, benefits, redundancy pay or tax credits.

The Equalities Act of 2010 attempted a voluntary approach to tackling the issue, but just five companies – Tesco, Friends Life, PwC, AstraZeneca and Genesis Housing – published their data.

The Office for National Statistics suggest the pay gap currently stands at 19.2% for full-and part-time workers, but the equality problem is not unique to the UK. In Germany, Destatis calculates an average hourly gross wage of 15.83 euros for women, while men’s comparable earnings stood at 20.20 euros. The United States  requires employer data as mandatory from firms with 100 staff, while in France, financial penalties were introduced for non-compliance back in 2012.

However commendable and well-intentioned, this compulsory league table of major employers will not ‘end the gender pay gap in a generation’. While the Equal Pay Act of 1970 prohibits disparity in the remuneration of men and women in pay and conditions of employment, various socio-economic factors will ensure the gap remains: high-growth, high-wage industries such as finance, engineering and technology are still predominantly male, particularly at board-level; and as women on average continue to assume a greater responsibility in childcare, the labour market as a whole will continue to be conversely affected. It is for these reasons that access to the labour market is the primary factor when qualifying pay disparity.

While empowering job-seekers with increased transparency is welcomed, the first league table is still two years away. The UK government’s ‘name and shame’ strategy may embarrass some employers, but at the present rate, the endemic gender pay gap will take almost half a century to close.